Health Care Reform Implementation Update - February 19, 2013

by Cozen O'Connor
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Last week another marketplace deadline came and went, Illinois became the 21st state approved to operate a health insurance marketplace, and U.S. senators pressed the HHS official responsible for the bulk of exchange implementation for information.

AT THE AGENCIES

On Friday (2/15), the Obama administration said the state-based high-risk pools from the ACA will close to new applicants in the next few days or weeks as funding is beginning to run low.  The 100,000 or so people who are already enrolled in these pools will not, however, be affected.

On Friday (2/15), CMS issued its annual projection of Medicare Advantage and Part D premiums and rates for calendar year 2014.  CMS said that for the first time since the Part D program began, the standard Part D deductible will go down from $325 in 2013 to $310 in 2014, and cost- sharing amounts will also be lower. Comments are due on March 1.

CMS also issued a proposed rule that would implement medical loss ratio requirements for the Medicare Advantage Program and Medicare Prescription Drug Benefit Program under the ACA.

On Friday (2/8), the Obama administration released details on some of the nonmilitary cuts that will take effect due to sequestration from the Budget Control Act of 2011.  Among other things, the cuts would result in the loss of 12,000 research positions funded by National Institutes of Health grants and the end of treatment for 373,000 individuals with mental illness.

IN THE STATES

Technically, the deadline to apply for a state-federal partnership exchange/marketplace was Friday 2/15.  HHS has shown, however, that it is willing to be flexible on deadlines in return for state participation in implementing health reform.

Long-awaited decisions on three state exchanges came on Friday (2/15).  Govs. Chris Christie of New Jersey, Rick Scott of Florida, and Bill Haslam of Tennessee said they would not embrace partnership models for their exchanges. Because the states also are not choosing to run their own exchanges, they will default to federally run exchanges.

On Wednesday (2/13), New Hampshire Governor Maggie Hassan officially applied for a partnership exchange in a letter to HHS Sec. Sebelius.

On Wednesday (2/13), Wisconsin Gov. Scott Walker announced he will not propose expanding Medicaid in his state, and instead proposed tightening income eligibility for Medicaid, lifting a cap on a program that covers childless adults, and forcing more people to buy insurance through a government-run marketplace in order to cover the state’s low-income uninsured population.  The plan outlined by Walker would cover non-disabled adults up to 100 percent of the federal poverty level, down from its current 200 percent federal poverty level limit for state assistance, and allow those above 100 percent to purchase coverage through the exchanges.

On Wednesday (2/13), Illinois became the 21st state (including the District of Columbia) to be approved to operate a health insurance exchange, with enrollment to begin in October 2013.  Illinois’ exchange will be a partnership marketplace.

On Wednesday (2/13), the Georgia House passed House Bill 198 that would require health insurance navigators to be licensed in order to help uninsured Georgians and businesses use the health insurance exchange.

North Carolina Gov. Pat McCrory said on Tuesday (2/12) that the Medicaid program in his state is too troubled to expand, and he does not want to play a part in implementation of an insurance exchange in his state.  On Wednesday (2/13), the state House gave tentative approval to legislation blocking the expansion of Medicaid and the development of a health insurance exchange.

ON THE HILL

On Thursday (2/14), Gary Cohen, the director of the Center for Consumer Information and Insurance Oversight at the Centers for Medicare and Medicaid Services, testified before the Senate Finance Committee.  Cohen said HHS is making great progress and will be ready for people across the country to obtain high-quality affordable health care coverage beginning on October 1.  Sen. Orin Hatch (R-Utah) argued that the health insurance exchanges required by the ACA are going to increase health care costs.  Sen. Bill Nelson (D-Fla.) pushed Cohen for information about why funding for co-ops under the ACA was eliminated in the tax compromise.  Sen. Maria Cantwell (D-Wash.) questioned Cohen on the delay to implementation of the Basic Health Program, which would have enabled states to offer government insurance to people who did not qualify for Medicaid but who would still have had a difficult time affording premiums and cost sharing in the exchange.  Sen. Ron Wyden (D-Ore.) expressed disappointment that the administration had not extended the law’s definition of “affordable” coverage to family plans.

In an effort to shelter health care programs, Food and Drug Administration (FDA) funding, and several other items from the sequester, set to kick in on March 1, Senate Democrats crafted a proposal, the American Family Economic Protection Act, which includes a combination of revenue increases and equally split cuts to defense and non-defense discretionary spending.  Republicans criticized the proposal, especially for the increases in taxes it requires.

On Friday (2/15), Reps. Charles Boustany (R-La.) and Jim Matheson (D-Utah) reintroduced a bill to repeal the health insurance tax in the Affordable Care Act.  The Congressional Budget Office (CBO) valued the tax at $100 billion over 10 years.  Boustany also sponsored the bill in the last Congress and gathered 226 cosponsors.  The bill, however, never came up for a vote.

IN THIRD PARTIES

About 50 leading conservative voices signed on to a memo calling for Congress to defund the Affordable Care Act in the next continuing resolution.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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