July 23, 2012

By Bill Jaynes
The Kaselehlie Press

July 13, 2012 Pohnpei, FSM-MiCare is proposing an across the board 15.5 percent rate hike on premiums in order to ensure the insurance provider's future ability to cover the health care needs of the Federated States of Micronesia. The rate hike and other changes are scheduled to go into effect on October 1, the beginning of the 2013 fiscal year, after the public has had opportunity to comment on them.

MiCare says that it needs to make some changes in its regulations including to its schedule of rates if it is to avoid the financial crises it experienced in 2004 and 2005 that threatened to end Micare. Administrator, Mr. Nena S. Nena said that in those years MiCare had a deficit position of approximately $1.2 million.

"2010 was MiCare's best year," he said. "That year there was actually a profit but at the end of 2011 it had a deficit of $102,000." The MiCare Board of Directors had predicted that it would end 2011 with a deficit of over $140,000. Because of that prediction the $102,000 deficit was nominally good news.

Nena said that the MiCare board is aware and has planned for the fact that the 2012 fiscal year will also show a loss that will need to be covered by reserves. It's the beginning of a trend that if left unchecked could ultimately endanger the financial health of the health insurance program.

MiCare's full schedule of proposed rate changes is advertised in this issue of The Kaselehlie Press and can be found on page seven.

In addition to the increased rates for all MiCare subscribers, MiCare has added two new options for coverage. One of the options is a "Non-Referral Option" which, at $8.26 is half the bi-weekly premium MiCare will be charging for the Basic Health Option after it increases its rates. Mr. Nena said that MiCare added that option after numerous requests, particularly from students at the College of Micronesia. He said that it would also be helpful for retirees living on a fixed income. Essentially it has all of the benefits of the Basic Health Option except under that plan MiCare would not pay for off-island medical referrals.

The other new coverage option is a plan for "Regional and International Workers" that carries a bi-weekly premium of $51.46 per subscriber.

The proposed changes to the regulations include a number of changes to the language of the regulations. The wording changes broaden the definition of "dependents" by removing the requirement that a natural or adopted child must be unmarried, and remove the requirement that a dependent must rely on the subscriber for more than 50 percent of their support. They also clean up the language for the definition of a household member.

Changes include a new "Veterans Referral Benefit" that would allow referral to a veteran's hospital in Hawaii or in Guam, provided that the veteran is enrolled in the MiCare health plan. The beneficiary must also sign "an agreement that he or she will be responsible for the payment of the total cost of medical services, accommodation, land transportation and any other related cost and expenses accrued during such referral."

On medical referral transportation costs, MiCare is proposing to change its regulations to require a small co-pay of 5 percent of the cost of transportation for the person receiving medical care, including airfare to and from the off-island location for medical care and ambulance to and from the airport and to the health care facility. MiCare would cover the remaining 95 percent of those costs. Mr. Nena said this change is necessary due to the rising cost of transportation.

The proposed regulations also add a first "well baby" check-up to accompany the post-natal care check-up of a new mother.

The proposed changes reduce the number of routine physical examinations for which MiCare will pay from two to one per year. It will not pay for physical examinations for school or work purposes.

When asked how MiCare would know if a physical examination was for school or work purposes, Mr. Nena said that the auditors would "pick it up" because of the differences between a general physical exam and an exam for a health card.

Mr. Nena said that the physical exam benefit is not used as often as it should be. "We want to encourage people to go for regular exams. Some people don't believe in physical exams until they get sick," he pointed out, "but we want the exams to be preventive."

The annual deductible for those who have purchased additional prescription drug coverage under the Chronic Refill Option will increase from $100 to $200.

MiCare will also allow for coverage for two dimensional x-rays for dental purposes except for orthodontic assessment and something called "Temporomandibular Joint Abnormality."

Without knowing more, the three proposed changes regarding hemodialysis, organ transplantation, and coverage for cancer treatment look more ominous than they are.

The proposed changes merely clean up the language and don't represent a substantial change from MiCare's current regulations.

On cancer treatment, the proposed regulation changes disallow treatment for cancer determined to be at stage four at the time of diagnosis. It does not mean that MiCare will not pay for cancer treatments for patients whose cancer progresses to stage four AFTER diagnosis of existing cancer. The regulation change merely adds the words "at time of diagnosis."

Coverage for organ transplantation has long been disallowed. The proposed regulation changes add wording that also disallows coverage for related services after an organ transplant is performed.

Mr. Nena said that MiCare has never covered chronic hemodialysis treatments for renal failure. It has covered and continues to cover hemodialysis treatment in the case of an illness that causes kidneys to fail temporarily. In those cases hemodialysis is required to cleanse the patient's blood stream of waste products while the illness is being treated. The proposed regulations merely make the distinction between chronic and acute treatment and explicitly disallows coverage for chronic hemodialysis treatments while allowing for treatment for acute treatments.

Mr. Nena said that the process for changing MiCare regulations is a multi-step process.

First the Board meets and puts together a list of proposed amendments to the regulations. The proposed amendments are then sent to the FSM Attorney General's office which reviews the changes for legal sufficiency and generates a promulgation document. The document is then submitted to the President who either approves the promulgation document or does not. In the case of the current proposed changes, Vice President Alik Alik signed on behalf of President Mori.

The Presidential signature does not end the process. By law, the proposed changes must be advertised for solicitation of public comment for 30 days. Mr. Nena said that the MiCare Board decided to give the public more time for comment. It has already begun advertising the proposed changes and will continue to do so through the end of August.

Mr. Nena said that the Board would consider the relative merits of each comment that is presented to MiCare in writing before new regulations are put in place on October 1, 2012.