Health Care Reform

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Dr. Rodney Armstead, Senior Vice President of Western Region Plan Operations for AmeriChoice, a member of the Arizona Association of Health Care Plans, shares the Association’s ideas on health care reform.

Jose Cardenas: The national debate over health care reform is generally -- generating strong opinions on both sides of the argument. Many people have their own ideas as to what to do with the health care system. Tonight we'll listen to what Arizona health insurers have to say about health care. Joining me tonight is Dr. Rodney Armstead, senior vice-president of western region plan operations for AMERichoice. Thank you for joining us on "Horizonte."

Dr. Rodney Armstead: Thank you.

Jose Cardenas: Let's talk first just a little bit of background on what the association of health plans is.

Dr. Rodney Armstead: The association of health plans is really a group of managed care organizations across a variety of different products. It doesn't matter if it's Medicare, medicaid, commercial, that have come together to basically singular the voice around health care issues and really to improve the quality and access of health care for Arizonans. And this association is there to really work and negotiate and leverage and collaborate, particularly around issues of often present themselves at the legislature.

Jose Cardenas: Now, in the introductory piece we talked about both sides of the issue, which is perhaps both an over and an understatement, because it does seem to be uniform agreement that reform is necessary, wouldn't you agree?

Dr. Rodney Armstead: I would agree.

Jose Cardenas: And what is it that the health insurance companies are look for in terms -- or to put it more basically, what do you see is the reasons why we need health care reform?

Dr. Rodney Armstead: Health care reform fundamentally is needed because of two basic things. Cost trends that are not sustainable, and the fact that because as a country we spend more per capita than any other industrialized nation, we still have 46 to 47 million Americans that are under or uninsured. Fundamentally those are the two major drivers around this whole reform discussion.

Jose Cardenas: Now, when I said that maybe it's an overstatement to say that there are two sides, there are a lot of different interest groups. Last week we had the hospitals and we heard from doctors as well, of course consumers, and then there's the health insurance industry. Which early on actually came out in a very cooperative spirit in terms of initiating health care reform.

Dr. Rodney Armstead: And that's true. We acknowledge particularly around the issue of commercial coverage. One of the things that often would stick up very much is around the issue of preexisting conditions. And the insurance industry stepped up and said, one of the things that we can do that is monumental reform, if we could do that tomorrow, is basically to remove this issue of preexisting conditions when people who have preexisting conditions get new coverage insurance companies with historically exclude that condition for coverage for a period of time.

Jose Cardenas: Which was considered quite a major succession by the insurance industry.

Dr. Rodney Armstead: No question.

Jose Cardenas: Now, despite that, as the debate has gone on, the administration has started to focus not so much on health care reform, at least in terms of the rhetoric, but on the insurance company reform answer that it's the health insurance industry that needs reform. Do you agree with that?

Dr. Rodney Armstead: I agree that the rhetoric did change from health reform, insurance reform, and here's what happened. When the health reform discussion started, it began to gather -- galvanize the side of the aisle of folks with insurance. Those with Medicare coverage, basically they said, I want government out of my coverage. It's ironic given that Medicare is a public entitlement program. Same time, you have 160 million Americans who receive coverage through employer sponsored plans. And the majority of them through surveys are happy with their coverage. So the notion of health care reform wasn't resonating with a lot of people who had coverage. And so it switched to, this is really about insurance reform. I would offer that this -- that it's not about insurance. If you take the public programs, Medicare and Medicaid, with medical trends of eight to 9% year over year, I would submit to you that in a fee for Service environment, where there are not the controls, where there's cost containment issues that are there, you still have the issues of unsustainable trends that would bankrupt states and that would bankrupt Medicare in the near and immediate future. So it's not an insurance issue, it's really fundamentally a cost issue within health delivery system that's broken.

Jose Cardenas: But the insurance industry seems to be opposed to the so-called public option. Why is that?

Dr. Rodney Armstead: The public option, and fundamentally I think the belief that we have on the public option, is twofold. One, that it really isn't needed to engage and improve what are two fundamental things that they think they can accomplish with the public option. That's cost containment, and improved competition and quality. We believe that in the existing infrastructure, leveraging employer-sponsored plans, that if you bring the right changes, the right reform changes, that you can leverage a base of 160 million people covered and expand on that with the right reform pieces, and not endure any further attacks, burdens on people that would occur if you go with the public option plan. So it's a fundamental difference in philosophy that is not needed, build on what we have, don't put additional burden, and where the federal government needs to be involved, is the notion of appropriate expansion of public programs around Medicare and Medicaid. Get those populations that are now between the states children's health insurance program that are -- those that are covered from Medicaid, we need to expand it so we can get more of those folks covered that are somewhere between 150% of the federal poverty level and below. We believe that's the role of the federal government in this particular reform debate.

Jose Cardenas: And that would take care of those people who are unemployed or who work for small employers who accident afford to pay for the health coverage?

Dr. Rodney Armstead: Absolutely. There's about 7 million childless adults that if you go to 133% of the federal poverty level, if we were to take up to that poverty level -- we would pick up 7 million childless adults by virtue after policy there, that would pick up a large group of folks. So you're right, we pick up some underinsured, uninsured, and if we had a program that basically said, first thing we're going to do is make sure we have all the kids covered, that is a major movement relative to a public policy to eventually getting to the universal coverage piece.

Jose Cardenas: Now, you held a very important position in the Clinton administration, you arrived at the tail end of what turned out to be a failed attempt at health reform. But you were there, and you saw what happened. What lessons do you think have been learned by this administration based upon that experience?

Dr. Rodney Armstead: I think the administration's -- President Obama's administration learned a lot. Fundamentally this. The Clinton administration took an approach that was more insular driven by the administration, and not very inclusive early on of Congress. And I think that created all tremendous amount of dissention that ended up bearing the Clinton health reform piece. The Obama administration learned, and basically said, we want reform, we're not going to be prescriptive, we're going to advocate this to Congress we would like Congress to promulgate forward a health reform legislation piece that I can sign. What has happened is too much reign I believe, has been given there, and the president after the August recess will need to engage to bring more context allowing what the administration really wants, and I think that would help to coless the negotiations that will ultimately result in a health reform bill coming out.

Jose Cardenas: Speaking of negotiations, the master negotiator in health care reform, so many other areas, Senator Ted Kennedy passed away. How is that going to impact health care reform in the near future?

Dr. Rodney Armstead: I think it's a tremendous loss to the country, but particularly within Congress, Senator Kennedy was regarded as you articulated, the mass negotiator, particularly around these very passionate issues on health care and other social programs. I think it will be increasingly challenging, but I think they will go ahead and still get it done. But it certainly would be I think an easier role to tow if we had the skill sets and the passion and commitment of a senator Ted Kennedy and would like to send out all our condolences to the entire Kennedy family.

Jose Cardenas: Thank you very much for joining us on "Horizonte." I'm sure we'll have you back to discuss this.

Dr. Rodney Armstead: Thank you. Appreciate it. Enjoyed it.

Dr. Rodney Armstead:Senior Vice President, Western Region Plan Operations, AmeriChoice;

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