Health Care Reform Implementation Update - January 31, 2014

by Cozen O'Connor

This week the Congressional Budget Office (CBO) provided new scores for the three sustainable growth rate (SGR) repeal proposals from the Senate Finance, House Ways and Means, and Energy and Commerce Committees; a list of potential offsets for SGR legislation circulated Washington; the president discussed the already positive developments from the Affordable Care Act (ACA) in his State of the Union address; Utah announced its intention to expand Medicaid under the ACA tipping the balance of Medicaid-expansion and non-expansion states to more than half expanding, and 20-term congressman and long-time advocate of a health care reform Henry Waxman, announced his retirement. Additionally senator and doctor, Tom Coburn, who has spent 15 years in Congress, will retire at the end of this year.


On January 24, the Congressional Budget Office (CBO) said that the House Ways and Means SGR repeal bill would cost $121 billion over 10 years. Additionally, CBO reduced its estimate for the House Energy and Commerce SGR bill from $175 billion down to $146 billion. Then on January 25, the CBO announced the score of the Senate Finance Committee’s SGR repeal bill of $150.4 over 10 years. The higher-cost Senate Finance proposal includes close to $40 billion in Medicare extenders not included in the other two proposals.

A list of possible offsets for SGR formula repeal is being circulated around Washington. The list is extensive and is derived from policies developed by the Obama administration, the Congressional Budget Office and the Bipartisan Policy Center. All listed potential offset policies are merely options, not cuts or policy changes that will necessarily occur. Cozen O’Connor Public Strategies is happy to provide this list upon request.

On January 28, the House Ways and Means Committee held a hearing on the law’s employer mandate and its definition of a “full-time” worker. The ACA counts employees who work 30 hours a week to be full-time employees, and thus part of the group to whom employers must provide health insurance. At the hearing, retail, restaurant and other business groups argued that the ACA’s definition of full-time work is going to cause businesses to cut employee hours to avoid having to offer them health insurance. Ways and Means Ranking Member Rep. Sandy Levin (D-Mich.) argued in the hearing, “Why wouldn’t you want to cover them? Why wouldn’t you want to cover these people?” Republicans argued that the requirement will simply force employers to alter hours and employment opportunities.

The House Oversight and Government Reform Committee held a hearing titled “A Roadmap for Hackers? Documents Detailing Security Vulnerabilities,” in which the committee continued to examine the security concerns presented by the ACA.

On January 27, senior Sens. Orrin Hatch (R-Utah), Tom Coburn (R-Okla.) and Richard Burr (R-N.C.) released a legislative outline for a replacement plan to the ACA. The plan envisions issuing tax credits to those not working at a large company, allowing states to set up high-risk pools and significantly reshaping our Medicaid program. The plan would be paid for by capping the tax exclusion for employee health plans. It still needs legislative language and an official cost estimate, but it is unlikely to move through the Democrat-controlled Senate.

On January 28, the House voted 227-188 to pass the No Taxpayer Funding of Abortion Act, which would ban federal subsidies from going toward insurance plans that cover abortion and making the ban on federal spending on abortion permanent – something which is approved on an annual basis through the Hyde Amendment. The White House threatened to veto this bill.

Speaking in Texas on January 23, Rep. Paul Ryan said Republicans are discussing eliminating the ACA’s “insurance company bailouts” in negotiations to lift the nation's debt ceiling in February. Republicans have already introduced legislation to target the reinsurance fund and risk corridors to which Rep. Ryan alluded, which are designed to limit the risk insurers have to take and try to prevent premium spikes for consumers that result from ACA’s requirements that insurance companies accept all beneficiaries. Sen. Mike Lee also noted the “bailouts” in his official Tea Party response to the State of the Union address.

The Medicare Payment Advisory Commission (MedPAC), the independent body that advises Congress on issues affecting the Medicare program, is next scheduled to meet in March. We will provide further information on the agenda as it becomes available.

The Medicaid and CHIP Payment and Access Commission (MACPAC), the non-partisan federal agency charged with providing policy and data analysis to the Congress on Medicaid and CHIP, is next scheduled to meet on February 20 and 21. We will provide further information on the agenda as it becomes available.

Focused on initiatives like the faulty rollout of, Reps. Anna Eshoo (D-Calif.) and Gerry Connolly (D-Va.) are co-sponsoring a measure that calls for creating a U.S. Digital Government office, responsible for reviewing and guiding major IT projects of all federal agencies. The legislation would also make the role of U.S. chief technology officer a permanent position.


The federal government is seeking a candidate to fill a new position as a CMS risk management officer. The position was inspired by the faulty rollout of

According to an IRS notice released on January 23, Americans with limited health coverage under Medicaid and certain military health care programs will not be subject to the individual mandate penalty in 2014. 

HHS awarded nine states with a combined $201.2 million in new federal grants to support state-run and partnership exchanges. In order of grant amount received, the states receiving grants are Washington state, New Mexico, Mississippi, Arkansas, Delaware, Nevada, New Hampshire, Rhode Island and Utah.

On January 22 at the U.S. Conference of Mayors, HHS Secretary Sebelius encouraged mayors to urge their state legislatures to expand Medicaid under the ACA. Also on January 22, an HHS release said that more than 6.3 million people were determined eligible for either Medicaid or the Children’s Health Insurance Program (CHIP) between October and December.

The Federal Trade Commission (FTC) sued Kobeni Inc. due to spam emails it sent threatening federal prosecution unless the reader immediately clicked on a link to enroll in health insurance. The FTC accuses Kobeni and its president Yair Shalev of injuring consumers and deceptive representations, as well as violations of the FTC Act and the CAN-SPAM Act, failing to provide notice of opt out and failing to include a valid physical address in the spam mail.


On January 28, President Obama delivered his fifth State of the Union address. While health care and the ACA did not play as central a role in the speech as they have in years past, the president did note the strides that had been taken for those with pre-exiting conditions, those who are 26 and still able to remain on their parents’ health insurance plans, and that over nine million Americans had signed up for private health insurance or Medicaid coverage.

On January 23, Chris Jennings, a senior White House healthcare adviser, announced he would be stepping down from his post. An unnamed source told the Washington Post that Jennings' departure was due to health and family reasons.


On January 23, Utah Governor Gary Herbert expressed in a news conference that he backed his state’s expansion of Medicaid. Assuming the legislature is on board with Gov. Herbert, Utah would become the 26th state to agree to expand Medicaid, and a majority of states will be in this group.


On January 23, Moody’s downgraded the credit outlook for health insurance companies from “stable” to “negative.”  Some of the concerns prompting Moody’s downgrade were a rocky rollout of the exchanges, lower than expected enrollment numbers, uncertainty over who is enrolling, ever-changing regulations, troublesome back-end exchange issues and an underlying question of whether insurers are going to get paid sufficient premiums through the exchanges.

New research from the American Action Forum shows that young adults, defined as between 18 and 35 years old, may find it financially advantageous to pay the individual mandate penalty instead of purchasing insurance coverage, as long as they remain healthy.

A study from the Brookings Institution from January 27 says that the ACA will improve the “well-being and incomes of Americans in the bottom fifth of the income distribution.”  Brookings projects in its report that incomes in the bottom fifth of the distribution will increase close to 6 percent, and those in the bottom 10th of the distribution will increase over 7 percent.

Target is now planning to stop providing health insurance coverage for its part-time employees beginning in April, at which point these employees can join the ACA’s health insurance exchanges. Target's announcement follows those of Trader Joes and Home Depot among others. Target’s shift reflects the ACA requirement that employers provide health insurance to their full-time employees.


The U.S. Court of Appeals for the D.C. Circuit granted an expedited appeal of Judge Paul Friedman's January 15 ruling. On January 15, Judge Friedman upheld the IRS rule to extend tax credits and cost-sharing subsidies for the purchase of qualifying health insurance plans in health insurance exchanges established by the federal government.

On January 24, the Supreme Court granted the Little Sisters of the Poor, a group of Catholic nuns, a temporary exemption from the birth control mandate of the ACA until the 10th U.S. Circuit Court of Appeals decides the case.

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.

© Cozen O'Connor | Attorney Advertising

Written by:

Cozen O'Connor

Cozen O'Connor on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.