Health Care Reform Implementation Update - January 14, 2013

by Cozen O'Connor

The Obama administration gave eight more states conditional approval to operate health insurance exchanges, bringing the total number of fully or partially approved exchanges to 20; HHS approved 106 new accountable care organizations; and Congress reached a deal on the fiscal cliff that includes a “doc fix,” cuts the Community Living Assistance Services and Supports Program (CLASS), and slashes funds for the Consumer Operated and Oriented Plan program (CO-OP).


On Monday (1/7), Florida Gov. Rick Scott met with HHS Sec. Sebelius to discuss whether Florida will assist with the implementation of the state exchange and expand its Medicaid program in accordance with the Affordable Care Act. Gov. Scott is concerned about expanding the state’s Medicaid program, which already consumes close to 30 percent of the state’s budget, because he knows the expansion would be difficult or impossible to reverse and fears that the state portion of spending will grow over time. Scott said, "Growing government is never free." Prior to Scott’s meeting with Sec. Sebelius, however, Scott projected health reform could cost state taxpayers $26 billion, and after the meeting his administration released new cost estimates of $3 billion.

On Friday (1/4), Montana Governor-elect Steve Bullock unveiled state budget changes. Bullock intends to keep the proposed expansion of Medicaid under the ACA intact.

In response to Utah’s request from mid-December that the federal government allow Utah to run its own exchange by utilizing its already-existing exchange, the Obama administration gave conditional approval but said it would have to go beyond the services already offered.

On Thursday (1/3), Gov. John Hickenlooper announced a plan that would expand Medicaid in Colorado in accordance with the Affordable Care Act. The governor said that expansion would cost Colorado about $128 million over 10 years, however, his administration has identified more than $280 million in cuts and savings to the Medicare program to cover the change.

New Mexico Gov. Susan Martinez, who is a Republican, said the state will act in accordance with the Affordable Care Act and expand its Medicaid program.

According to the state budget California Gov. Jerry Brown released Thursday (1/10), it would cost California $350 million to participate in Medicaid expansion under the Affordable Care Act. These projected costs result largely from “the woodwork effect,” the increase in program participation from those individuals who were already eligible.

Former CMS Administrator Don Berwick said Tuesday (1/8) he is considering running for governor of Massachusetts in 2014.


On Tuesday (1/1), the House of Representatives approved the Senate’s last-minute fiscal cliff package. The deal includes a one-year doc fix, which prevents the 27 percent cut to physician Medicare payments. Such “doc-fixes” have been made every year since 2003. Physicians are happy the cuts will not go into effect this year but are disappointed the fix did not go beyond the usual one-year patch. Hospitals are less happy – the doc fix was paid for, in part, by cutting $15 billion in Medicare and Medicaid payments to hospitals over the next 10 years.

Additionally, the CLASS Act, which was intended to provide long-term care insurance, was eliminated. The executive branch had already said it would not proceed in implementing the CLASS Act because it was financially unsustainable.

Another loser in the fiscal cliff deal was the Affordable Care Act’s Consumer Operated and Oriented Plans (CO-OPs). Though the federal government has already awarded more than $2 billion in CO-OP loans, no state-level CO-OP is fully funded or operational yet.

On Thursday (1/10), President Obama signed the Strengthening Medicare and Repaying Taxpayers (SMART) Act into law, which changes the way Medicare collects money from those whose negligence caused a patient to incur medical bills.


HHS issued a split decision on Governor Paul LePage's request for the state of Maine to eliminate health insurance for about 37,000 Medicaid recipients to account for the $20 million budget gap the state faces. The Obama administration partially approved Maine's request and allowed it to eliminate coverage for 12,592 working parents with earnings between 133 and 200 percent of the federal poverty level.

On Thursday (1/3), HHS gave eight more states conditional approval to operate the health care exchanges they laid out in blueprints to the federal government. The approved exchanges include the state-based exchanges of California, Hawaii, Idaho, Nevada, New Mexico, Vermont and Utah, and the partnership exchange of Arkansas. This brings the total number of states approved to fully or partially operate their exchanges to 20, 18 state-based and two partnership exchanges.

HHS approved 106 new accountable care organizations under the Affordable Care Act. According to an HHS press release, the new ACOs will benefit 4 million Medicare beneficiaries.

On Thursday (1/10), HHS issued a new report showing that Medicare’s costs are rising at an historically low rate while seniors receive more benefits.

On Wednesday (1/9), a White House official said that Kathleen Sebelius will remain the Secretary of HHS.

Written by:

Cozen O'Connor

Cozen O'Connor on:

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