April 7, 2010
Host: Ted Simons
AARP on Health Reform
- Ritch Steven, Chair of the AARP Arizona Advocacy Network, explains some of the ways AARP members, and others, will be affected by the national health reform legislation.
- Ritch Steven - Chair of the AARP Arizona Advocacy Network
| Keywords: health care
Ted Simons: As the debate continues over the merits of the national health reform package, AARP Arizona has been looking into how the law will affect its members. Here with more on that is Ritch Stevens, chair of the AARP Arizona advocacy network, and a member of the AARP national policy council. Good to see you again.
Ritch Steven: Thank you very much.
Ted Simons: What kind of reaction are you getting so far on this law?
Ritch Steven: Our members are beginning to understand it more and we are hearing more and more positive things every day as we try to explain what the law, which is inherently very complex, means to them and the benefits it can provide.
Ted Simons: What questions are you hearing most often?
Ritch Steven: What we are hearing is, what about the drug benefit? I want the doughnut hole closed. And we are saying, you are going to get a $250 check immediately if you fall in the doughnut hole, which is a gap in payment coverage if you have Medicare prescription drugs. We are asking, we are hearing about preventative drug, or preventative care services that people want. And we are saying there are free preventative care services now that will be made available to those on Medicare and for people who are not on Medicare. Because over half of our members are in that age group, 50 to 64, as well. And there are a lot of benefits that accrue to them as well.
Ted Simons: Those two things you mentioned, the doughnut hole and the preventative care, the expansion of those what kind of time line are we looking at? Sooner? Later? When?
Ritch Steven: The doughnut hole, the $250 rebate that they will get if they fall in that gap in payment, that will happen this year, 2010. Next year, even in 2011 it will be even more significant. They will get a 50% reduction in brand-name prescription drugs and a 7% reduction in generic drugs, and then over the next seven years, those will gradually increase until basically they will be just paying the nominal co-pay that they now pay.
Ted Simons: What kind of impact are you seeing for those with chronic health conditions?
Ritch Steven: Well, this is one of the good things about the bill. In all the debate that occurred, this issue of chronic conditions and the vast costs that it incurs in people, the difficulty they have, for example, diabetes, that they may struggle with for 20 years, costs a lot, pushes people into medical bankruptcy, and makes it very difficult for them to get insurance in many cases. All of those issues are being addressed by making insurance more available, preventing insurance companies from being as discriminatory as they have been in the past. And making it far more affordable for millions and millions of people.
Ted Simons: I know there's also concern, especially among retired folks, regarding Medicare. There's been a lot of talk. Medicare is going to be cut, Medicare Advantage is not going to be the same as it used to be. Talk us to about that.
Ritch Steven: Medicare Advantage is a very curious thing. We have a very high number of our members here in this state who are on Medicare Advantage, about 40% versus the national average of about 25%. Medicare Advantage is run by private companies who provide traditional Medicare services and then a range of services above and beyond that amount. And they have always contended they can deliver us Medicare services, traditional Medicare services cheaper than Medicare can. About 6% cheaper. And yet they are being paid 14% more and most of that money that they are being paid more goes to their bottom line. So in the bill, all they are trying to do is say, look, over a period of five or six years, we are going to reduce that money back to exactly what we pay for traditional Medicare, dollar for dollar. What you as a business decide to do is up to you. You can offer anything you want to offer above and beyond traditional Medicare benefits, and we encourage all our members anyway to kind of look forward for a year and say, what plan do I think will be best for me? Because when you have Medicare, you are allowed to change your plans up to once a year with no penalty. And so if that plan is changing benefits that are important to you, look for some others. There are many companies out there that offer a wide array of benefits that people enjoy.
Ted Simons: The idea of long-term services, in-care services, again, changes here? Impact?
Ritch Steven: There are some very significant changes there for the first time. There is something called the Class Act, which people will hear about, and it is going to be a way that you can set money aside for a period of time and then if you are disabled after five years of contributing to this program, you can earn a minimum of $50 a day, which is really $18,000 a year, to pay for services for as long as you are disabled or need that money. And that is a very significant change in benefit structure for individuals. They are going to have to be a lot of new rules written about that. The program needs to be filled out. There's still a lot of questions. But it's a wonderful beginning to give people the ability to provide for themselves in their home, which is where they want to be, by being able to afford direct caregivers.
Ted Simons: And the idea behind this was to promote independent living. Correct?
Ritch Steven: Independent living. We hear 89% of our members tell us they want to stay in their home. They don't want to go to an institution. And we have to help provide some of the services and financial underpinnings which this bill does, to allow them to do that with dignity and autonomy.
Ted Simons: The time line for that particular aspect? I know it's a biggie. What do we know?
Ritch Steven: I believe that starts in the next couple of years. It's not instantaneous. It's going to require some insurance changes and it's going to require some other kinds of rule making to fill it out so I would think it's around 2014. I don't know that exactly.
Ted Simons: And a lot of things aren't known exactly by a lot of members, I am sure. Are you hearing misconceptions, things that are just flying through that you have no idea where they came from but you have to reassure members that's not going to happen? What’s the biggest one you hear?
Ritch Steven: There's a lot of fear being used out there that they are going to lose their Medicare benefits, the programs are going to go broke, they are lying to you. Just general nonsense. None of those things are going to happen. This program is going to really improve the way health care is received throughout the country by virtually every age group. One of the things that AARP is doing is it's setting up a website. It's operational today. I checked it out just before I came down here. It's www.aarp.org/getthefacts.
Ted Simons: You are absolutely correct. We had it on the screen when you were giving it out and for anyone with questions, go there and they should get as many answers as they can.
Ritch Steven: We will be continuously updating it as more information on this very complex piece of legislation comes available.
Ted Simons: All right. Very good. I know it's confusing stuff. Thank you so much for clarifying some of it for us at least.
Ritch Steven: My pleasure, Ted. I would like to come back and keep you abreast of it as we go forward.
Ted Simons: Sounds good. Thank you so much.
First Things First
- State lawmakers have referred a measure to the 2010 general election ballot asking Arizona voters to repeal First Things First, an early childhood development and education program, funded by a tax on cigarettes, that was passed by voters in 2006. If approved, the measure would redirect tax money collected for First Things First to the state general fund. Rhian Evans Allvin, Executive Director of First Things First, discusses the referendum.
- Rhian Evans Allvin - Executive Director of First Things First
Ted Simons: In 2006, Arizona voters approved a tax on tobacco to fund early childhood development and education. At the same time they created a new state agency called First Things First, to administer the money. So far the tax has generated about $500 million. First Things First is responsible for using that money to fund programs to keep kids healthy and get them ready to enter kindergarten. But state lawmakers have referred a measure to the November ballot that asks voters to repeal the program and send money generated by the tobacco tax to the state's general fund. Here to talk about that is Rhian Evans Allvin, executive director of First Things First. Good to have you here. Thank you for joining us. We talk about preparing kids for kindergarten, which is what First Things First does, what does that mean?
Rhian Evans Allvin: It means that they have every opportunity to have a solid foundation. It means that they are getting the kind of developmental screenings that they need. It means they are getting the pediatric services they need. It means that they are having bonding and they are building their vocabulary and their literacy from birth. We know now from neuroscience that learning begins at birth. So it's a combination of all of those things that give kids the solid foundation they need to be successful in school.
Ted Simons: With that in mind, the tax was approved and the money is coming in to the tune of somewhere upwards of $500 million or so. There are concerns that your agency, your organization is sitting on too much of that money. How do you respond?
Rhian Evans Allvin: The tobacco revenue comes in approximately $150 million per year. The legislation with the statutory language was written, it required a year delay before we started spending the funds. We know that the tobacco revenue is a volatile revenue stream. So in good fiscal planning, we wanted to make sure that we were budgeting based on solid numbers, not on what we thought might happen. So the revenues collected and then we budget and then the money gets spent. So there's always going to be a bit of a fund balance, number one. Number two, we know tobacco declines over time, tobacco revenue. And so we wanted to account for years into the future when we knew the revenue stream would be declining. So the fund balance was planned and purposeful. It wasn't by accident.
Ted Simons: So, but does it justify, as "The Republic" reported, 2/3 of the funds generated are still not used? That’s a lot of a balance there.
Rhian Evans Allvin: Revenue was just passed in 2006. So we are three years into it. We have allocated at this point $284 million to our local regions and to the state.
Ted Simons: OK. Much of the reason that this is, this was referred by lawmakers is there was concern last fall, when health services needed help with the cost of child care licenses and these sorts of things, requested $2 million from your organization. And they were turned down. Didn't please a whole lot of people. What happened there?
Rhian Evans Allvin: Again, the statutory language in First Things First initiative said you cannot supplant these funds. So we are, by law, bound to not fund things that the general fund is funding or supposed to fund. And so, it would have been illegal for us to have just filled in the gap for the State. Having said that, there are a lot of partnerships that we have with State entities. We work very closely with DES on subsidy. We are doing a lot of public health initiatives with the Department of Health Services. We have been in collaboration with those agencies since the beginning. We just can't supplant funding when the legislature decides to cut funds for an existing program.
Ted Simons: It makes the critics say that's what exactly is First Things First for when to help to with child care licensing costs which would affect a whole lot of kids, the organization can't be found.
Rhian Evans Allvin: Right. But I certainly understand that. But at the same time, when you think about what First Things First is funding, related to developmental screenings, related to outreach to kids care, related to all of the things that we know go into making sure that kids are healthy and prepared for school, I will give you an example. There are a lot of communities in this state, rural communities that prior to First Things First did not have a pediatrician. Did not have occupational therapists. We are stipending a lot of health professionals to go into rural communities. Woman in Yuma who tells her story about having to take her son to Scottsdale for developmental screening who was on the cusp of being diagnosed with autism. Had to drive him to Scottsdale. Now with First Things First she is getting the developmental screening her son needs in Yuma.
Ted Simons: Is that information getting out? More than one lawmaker has said on the record we don't know what's happening with this money. We don't know what they are doing. There are charges that there have been conflicts of interest and favoritism involved. Because very small percentage of nonprofits seem to be getting a large percentage of what little money has been doled out so far. What's going on here? Is there a disconnect? What's happening?
Rhian Evans Allvin: First of all, I think in terms of the word getting out I think we need to think about Arizonans and the word getting out different than the word getting out with lawmakers. I think many, there are 300 volunteers across the state involved in making the decisions on how we spend First Things First money. So I would charge anyone to go into a local community and ask them if they didn't know about First Things First. I think it's very popular. I think lawmakers have not necessarily known all of the work that we are doing and we are working to educate them.
Ted Simons: The idea, though, of conflict of interest and favoritism, how do you respond to that? It sounds like some folks involved with the organization are getting some of these grants.
Rhian Evans Allvin: We are required by law to comply with all of the state's conflict of interest laws. And, in fact, we go beyond that. We do trainings for our council members. They recuse themselves from conversations that they have related to grants that they have. They are not allowed to have conversations related to any contract that are let. So we feel very confident that we are not only biding by the law but taking the extra step to make sure there are not conflict of interest.
Ted Simons: There was also some concern regarding emergency grants without the competitive process. I think 30 some odd million, something along those lines. These were emergency grants so we can understand why maybe the process was changed a little bit but the law, legislators will say we have an emergency here at the State and we need some of the money that this organization is sitting on. Do those things parallel? Can you understand why the State is coming from? It sounds like they see a whole lot of money, they see a whole the lot of kids here starting with kids care and are going from there.
Rhian Evans Allvin: Let me answer your first question. Related to the emergency funding, tens of thousands of kids would be dropped off of not being able to go to child care had we not stepped in and done emergency funding. We followed all of the procurement process. And we went through and worked with the Department of Administration and got permission to do what we did and we feel very confident that we did the right thing. I believe related to lawmakers, we have offered on for the last year, we have been offering to help with the State's budget crisis. We offered a loan. It is now upwards of $300 million that we have offered. No interest to be paid back through 2017. We are requiring the bulk of those payments to be in the latter years because we recognize that the State is in a huge crisis. I feel like we have really worked to be part of the solution.
Ted Simons: With that in mind very quickly, is a solution a compromise, is something being worked out here? I know the thing has already been referred. Are changes ahead?
Rhian Evans Allvin: We hope so. We are working very hard in partnership with lawmakers to rescind the action they took which there is precedent to do that, to have in place of sweeping eliminating first things first and permanently sweeping the tobacco revenue into the general fund to be spent at the discretion of lawmakers, we are proposing that lawmakers accept our loan, no interest, that they -- we would jointly work to make sure that it passed at the ballot in November.
Ted Simons: All right. We have to stop it right there. Thank for joins us.
Rhian Evans Allvin: Thank you. I appreciate it.
- A mid-week legislative update with a reporter from the Arizona Capitol Times.
- Jim Small - The Arizona Capitol Times
Ted Simons: Good evening and welcome to "Horizon." I'm Ted Simons. Job creation, term limits, pay day loans, you name it and chances are it was scheduled for a hearing at the State Capitol this week. Lawmakers are plowing through the remaining bills of the session, hoping to finish their work sometime soon. Here with an update is Jim Small, legislative reporter for "The Arizona Capitol Times." Good to see you again.
Jim Small: Thanks for having me.
Ted Simons: Want to get some of the legislation in a second but first of all of the governor apparently now going to go ahead and join the lawsuit against the feds.
Jim Small: Right. It's the lawsuit I think that 14 or 15 other states have already joined suing, saying the federal health care legislation infringes on states' rights and state sovereignty. They had the option, and there was some discussion, about whether the governor would just join this existing lawsuit or kind of file a new one since, you know, some of Arizona's problems are unique. We have the biggest budget deficit where we have some different Medicaid requirements than most states. I think there is only a handful of states that are in the same boat that we are in terms of health care funding. So apparently they decided for whatever reason, you know, that this would be the best strategy, would be to just kind of jump on to this existing suit, certainly it's cheaper to do. The governor's personal staff counsel is going to be the one handling this. It's probably only going to cost a couple thousand dollars for them to do it this way as opposed to file a new suit where they would have to likely go out and hire an attorney and go through the whole process.
Ted Simons: OK. Still hearing from Attorney General Goddard that it's a waste of time and money, Democrats say the same thing.
Jim Small: Of course they are. There's no surprise. They have been saying that since the idea of filing this lawsuit came up and obviously, Attorney General Goddard is perspective gubernatorial nominee Goddard so you have that as well.
Ted Simons: On the Democratic side. Indeed. Let's get to an interesting story here regarding the Arizona Hospital and Health Care Association. The idea was that they were going to go ahead and put a tax on the ballot to help pay for a variety of things. They have since changed their minds. Why?
Jim Small: Yeah, well, one of my colleagues spoke with the president and C.E.O., John Rivers of the Hospital and Health Care Association. And he said they were really concerned apparently about damaging relationships with Republican legislative leaders. Truly, they were going down a path where they were starting to get a lot of push back from GOP leaders. One of them in the house, Andy Tobin, had actually worked on an amendment that would have assessed a tax on all health care doctors, hospitals, dentists, psychiatrists, all of them would have faced a 2% tax on medical services provided. And so rather than have these dueling things moving forward and animosity the health care association decided, OK, maybe discretion is a better part of valor here, we could figure out another way to do this so we don't end up butting heads and really setting up a conflict for years to come.
Ted Simons: It sounds like the GOP is, and the legislature came back very hard. That's hardball there. Although the idea of taxing hospitals and doctors not entirely unreasonable. Other states do it. Correct?
Jim Small: Correct. It certainly was hardball without a doubt. It was a reaction directly related to this proposed income tax but other states do impose this provider tax. I know Minnesota has a very similar tax already in place that they use like Arizona was proposing to do on their Medicaid program and paying for low-income, for health care for low-income residents.
Ted Simons: For now that's off the ballot. There's no chance of that the group getting together with that initiative?
Jim Small: Right. They have called off that effort.
Ted Simons: OK. What about the jobs bill? I know it's now been rewritten. This was Kirk Adams, speaker Adams' jobs bill. It looks like it's been rewritten to satisfy concerns in the Senate?
Jim Small: Concerns from the Senate and I think from the governor to a certain extent. It was scheduled originally to be heard in committee today. It got pulled off yesterday and it's going to be heard instead on Monday. But they did a strike everything amendment basically. Has the same, many of the same provisions. Couple things it does it gets rid of an individual income tax cut for all Arizonans. Would have been about 5% across the board. And by getting rid of that it also gets rid of, that was the provision that cost the most money. And the analysis from the legislative budget analyst pegged this thing at $900 million or so. That alone cost about $400 million. So they are getting rid of that. And they are delaying a number of the other tax cuts, some of the income tax cuts and property tax things are delayed a little bit. And the idea behind that is to take away the ammunition from the Democrats have been using against this bill which is Republicans want to give businesses a tax cut at same time they are asking you, the voter, to raise your sales tax. So they equated it to a corporate bailout, you are taking money from voters and turning around and giving it right to businesses. By delaying this the implementation largely for most of these cuts, they won't go into effect in any meaningful way until after that sales tax has stopped being collected. The idea is to try to undercut that argument a little bit.
Ted Simons: Still work to be done on that one as well and some other areas.
Jim Small: Yeah, there is still discussion between the Senate and the House as to the final wording of amendments and various other provisions that may or may not be included. Obviously, there is some trouble with getting support that they need in the Senate in order to pass this.
Ted Simons: Pay day loans, once again, seem to rear its head and once again it seems like we are like whack-a-mole or something. Seems like someone got it again.
Jim Small: That was another one that was supposed to be in the same Senate Finance Committee this afternoon that ultimately was kind of withdrawn, and it wasn't heard. It was a new way to do pay day lending. It would have shoe horned the industry into a small consumer loans provision that already exists for regular banks and would have put them in there. As soon as the amendment became public, the pay day loan critics came out in full force. You know, went to their people and had them call lawmakers, email them, sent out email blasts, did the whole nine yards. The thing they have been doing this entire year with all these pay day loan bills and were obviously able to convince the Senate that really it wasn't worth hearing this and more likely than not you are not going to pass it.
Ted Simons: And that's the last we will hear about this session?
Jim Small: It sure seems to be. You know, you can never fully count a measure dead until they sine die the session and go home but for all intents and purposes this thing is dead and this industry will disappear this summer.
Ted Simons: The last question very quickly. Term limits looks like it's cleared a house committee. How far can it go?
Jim Small: This is an idea that's backed by Justice O'Connor and the group that Justice O'Connor assembled to look at these issues. And it was an idea that really came out of there. It's gotten through a house committee. It still has to go through another House committee or be withdrawn from that committee which is more likely at this point. And that is in the mix of dozens of items that are jockeying for position on the ballot. And Republican leaders are going to sit down I think in the next week or two and decide which ones are going to move forward. I think this one ranks high for a lot of people.
Ted Simons: Very good. Jim, thanks for joining us.
Jim Small: Thank you.