Health Care Reform Implementation Update - October 4, 2013

by Cozen O'Connor

Open enrollment began this week, making it possible for the first time to enroll in Affordable Care Act (ACA) online marketplaces. Technical glitches were widespread, but the problems were overshadowed by the shutdown of the federal government. After several rounds of House-Senate exchanges with a continuing resolution (CR) to keep the government open, October 1 came and went with no agreement. Knowing that this opportunity is one of Republicans’ only chances to have their ACA disputes raised on the Senate floor, Republicans have been refusing to pass a continuing resolution that does not defund or delay the law. Meanwhile Democrats are saying that the ACA is the law of the land and not open for negotiation. While the government shutdown has caused problems of its own, more problems lie on the horizon with a deal also needed on the debt ceiling, which the country is projected to hit by October 17, according to the Treasury Department. Last evening, Congressional leaders met at the White House with President Obama to discuss both the re-opening of government operations and raising the debt ceiling, but no accords were made. Democratic leaders in the Senate in addition to the president insist they will not negotiate on any aspect of either the CR or the debt ceiling increase, and will do so only after both policy priorities pass.


On September 20, the House passed a continuing resolution 230-189 to keep the government running until December 15 while defunding the ACA. The CR was then sent to the Senate. On September 23, Senate Majority Leader Harry Reid filed a procedural motion to consider the House bill. Senator Cruz vowed to “speak in support of defunding Obamacare until [he was] no longer able to stand” in order to rally votes against proceeding with the bill. After holding the Senate floor for more than 21 hours, Sen. Cruz had to relinquish the floor, and the Senate voted to proceed to a vote on the bill. Then on September 27, the Senate took three votes: to end debate on the House bill, to strip the provision that would gut the ACA, and to approve a substitute measure. On September 29, the Senate sent the spending bill back to the House. The House then voted to repeal the ACA tax on medical devices, delay the ACA law by a year, and allow employers and health care providers to opt out of contraception coverage. The House then sent the Senate a spending bill with a delay of the ACA, the change in contraception coverage, and a repeal of the medical device tax attached. When the Senate reconvened at 2:00 p.m. on September 30 (just 10 hours from the looming shutdown), within minutes it stripped the health care provisions from the spending bill and sent it back to the House. Around 8:40 p.m., the House voted to delay the individual mandate by a year and cancel insurance subsidies for lawmakers and their staffs and sent the bill back to the Senate with these additions. Around 9:30 p.m., the Senate voted to strip the health care language from the bill again and sent it back to the House. House Republicans appointed formal negotiators to participate in House-Senate negotiations, but shortly before midnight Senate Majority Leader Harry Reid said that the Senate would not appoint conferees. When the clock struck 12 on October 1, the lapse in federal appropriations caused the government to shut down. Many are concerned that the impasse will last past October 17, the date when Treasury Secretary Jacob Lew said the debt limit would be reached.

On September 30, Senate Finance Committee Chairman Max Baucus announced that the committee would host a hearing on October 8 on ways to improve post-acute care for Medicare patients. Those who are expected to testify at the hearing are Medicare Payment Advisory Commission Executive Director Mark Miller, Brookings Institute health reform center Managing Director Barbara Gage, Chairman of Remedy Partners Steve Wiggins, and Partners Healthcare’s Clay Ackerly. In June, the Finance Committee had asked stakeholders for ideas to improve the sector by August. The request yielded close to 90 responses. It is not yet clear how the shutdown will affect the hearing.

On September 25, the Senate Health, Education, Labor & Pensions (HELP) and House Energy and Commerce committees struck a deal on legislation that creates a class of compounders called "outsourcing facilities" to be regulated by the Food and Drug Administration (FDA) and creates a prescription drug “track and trace” system to ensure drugs’ authenticity and safe-keeping. On September 28, the House voted to pass a bipartisan bill that would bolster federal oversight of compounding pharmacies and institute a federal prescription drug track and trace system. The Senate is expected to pass the legislation as well.

On September 24, Chairman of the Senate Republican Conference Sen. John Thune (R-S.D.) and Ranking Member of the Health, Education, Labor and Pension (HELP) Committee Sen. Lamar Alexander (R.Tenn.) led the effort to send a letter to HHS Secretary Sebelius calling for a one-year extension for health care providers to complete the second stage of the Electronic Health Records (EHR) incentive program, which is increasing the adoption of health information technology by hospitals and physicians across the country. Sens. Thune and Alexander were joined by Sens. John Barasso (R-Wyo.), Richard Burr (R-N.C.), Saxby Chambliss (R-Ga.), Dan Coats (R-Ind.), Tom Coburn (R-Okla.), Mike Enzi (R-Wyo.), Johnny Isakson (R-Ga.), Mark Kirk (R-Ill.), Jerry Moran (R-Kan.), Lisa Murkowski (R-Alaska), Rob Portman (R-Ohio), Jim Risch (R-Idaho), Pat Roberts (R-Kan.), Pat Toomey (R-Pa.), and Roger Wicker (R-Miss.).

Following the September 19 House Energy and Commerce subcommittee on Oversight and Investigations hearing at which Gary Cohen, the head of the Center for Consumer Information and Insurance Oversight (CCIIO) testified about his agency’s preparedness for enrollment in insurance marketplaces, Republicans on the committee asked Cohen to answer further questions about navigator groups.

The Medicare Payment Advisory Commission (MedPAC), the independent body that advises Congress on issues affecting the administration of Medicare is scheduled to meet on October 10 and 11, however, according to its website, the commission is currently closed “due to a lapse in federal appropriations.” We will provide more information as it becomes available.


On October 1, open enrollment began, and state and federal marketplaces opened for the first time. Consumers faced numerous error messages, long wait times, in many cases were unable to sign up for coverage, and in some cases entire systems went down. Notwithstanding early problems, October 1 is only the first day of a months long open enrollment period. The administration attributed the problems to the marketplaces’ popularity.

On September 30, HHS Secretary Sebelius announced that the public should be patient with ACA and reminded her listeners that “Tuesday is just the start of a six-month open enrollment period.” On October 1, Secretary Sebelius presented a similar message in the face of the widespread enrollment glitches.

On September 30, HHS announced that it would have to furlough over half of its employees in the event of a government shutdown.

On September 30, the Treasury Department issued proposed rules on how some employers and insurers report the health insurance they provide under the ACA. The purpose of the regulations is to ensure that people enroll for health coverage and that large companies offer insurance to their employees.

On September 23, Louis Lerner, the IRS employee who has been tied to and testified several times on the IRS targeting of conservative groups, announced that she was retiring from the agency. House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) said Lerner would likely be brought back before the committee to answer questions about the controversy surrounding the IRS’s targeting of tea-party groups.

On September 26, the administration announced that the start date for online enrollment in the small business (SHOP) exchanges would be pushed back a month until November 1.

On September 25, HHS released average premium cost data that it says shows premium rates under the ACA are affordable, with Americans paying $328 per month on average for a mid-level plan before subsidies are considered. The report shows wide variation in potential unsubsidized monthly premiums across the featured jurisdictions.

On September 23, two years after the FDA released draft guidance on mobile medical apps, it issued final guidance on the issue. Under the final rule, the FDA will regulate only those products that transform smartphones into devices the FDA currently regulates or accessories that regulate devices.

On September 26, CMS awarded a contract to Maximus Federal Services potentially worth up to $383 million over 4 years to  manage the eligibility appeals process on the benefits for which consumers are eligible on ACA exchanges.

On September 30, the Office of Personnel Management released a final rule on how members of Congress and their staffs will get health insurance through the exchanges starting in 2014. The rule requires that they use the D.C. small business exchange regardless of their actual state of residence. These individuals will not be eligible for subsidies to buy insurance no matter their incomes, however, they will be permitted to receive federal employer contributions.

On September 30, the Office of Personnel Management (OPM) released details about the multistate plans that will be offered on 30 state exchanges in 2014. These plans will be offered by Blue Cross Blue Shield Association.


On September 25, the D.C. Health Benefit Exchange said that although consumers will be able to submit paper applications by the October 1 exchange launch, they will not have access to their premium prices until mid-November.

On September 27, CMS approved Arkansas’ proposal to use federal money to expand the state’s Medicaid program to help low-income residents buy private insurance under the ACA. Iowa still awaits approval on its own Medicaid expansion proposal.

Early online exchange glitches caused Maryland and Minnesota to delay the opening of their exchanges until the afternoon on October 1.

On September 23, Pennsylvania Gov. Corbett’s administration met with CMS and said the meeting was positive and constructive. Gov. Corbett is seeking assurances that a set of Medicaid reforms in his state can accompany any type of expansion in Pennsylvania before he agrees to expand.

Some Wisconsin residents will be losing Medicaid coverage starting in January due to a change Wisconsin made earlier this year to income eligibility for Medicaid in the state. The change moved income eligibility requirements for Wisconsin’s Medicaid program from 200 percent of poverty level to 100 percent of the poverty level. The University of Wisconsin Health and United Way of Dane County have stepped in to assist these individuals in affording private coverage on the new insurance exchange.


According to a new analysis by Avalere Health, exchanges may have higher out-of-pocket costs than expected. The six-state study shows that consumers could face high cost-sharing requirements in addition to their premiums. The White House highlighted on September 25 that premiums would be lower than expected, however, these figures do not include dollars that will be spent on co-payments, co-insurance and deductibles.


The D.C. District Court scheduled a hearing for October 21 to decide whether to block ACA subsidies to residents of states that are not running their own health insurance marketplaces.

On September 27, Planned Parenthood and over a dozen women’s health providers filed a lawsuit to block two provisions in Texas’ abortion regulations passed this summer.


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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