Health Care Reform Implementation Update - July 23, 2013

by Cozen O'Connor

With only two weeks before Congress’ August recess and just a little more than two months before October open enrollment begins, Washington is busy sorting through, implementing and, in some cases, fighting the Affordable Care Act (ACA). The Department of Health and Human Services released final rules for navigators, non-navigator assistance personnel and certified application counselors, all of whom will help connect people with health insurance plans through the ACA’s online marketplaces; the House Ways and Means Committee released bipartisan proposals to reform Medicare to cut costs; the House Energy and Commerce Committee released draft Sustainable Growth Rate (SGR) reform legislation last week and voted for it today; the House passed symbolic bills that would delay the employer mandate (which has already been delayed by the Obama administration) and the individual mandate; and CMS announced results from the first performance year of the Pioneer Accountable Care Organization (ACO) program.


On June 17, the Department of Health and Human Services published final rules for navigators, non-navigator assistance personnel and certified application counselors, who are tasked with helping people understand the ACA and determine their coverage options through its insurance marketplaces. The rules finalize training and certification standards.

On July 16, CMS announced results from the first performance year of the Pioneer ACO program. Compared with other ACO models, the Pioneer ACOs assume two-sided risk, where participants can share in savings and also are penalized for expenses. CMS reported that all 32 participants in the program were able to boost the quality of care, though not all of them were able to produce savings in the first year. Nine of the 32 ACOs are dropping out of the program because they did not produce savings. Seven of the nine are applying to participate in a different Medicare Shared Savings Program that allows for more time before penalties for not reducing spending kick in.


On July 19, the House Ways and Means Committee released bipartisan proposals to reform Medicare. The proposal comes after several hearings on Medicare reform. It outlines three key policies, closely mirroring President Obama’s proposals in his 2014 budget: increasing premiums for wealthier seniors, increasing the Part B deductible, or establishing a home health co-pay.

The Republican-led House passed two bills delaying key provisions of the ACA, H.R. 2667, which would delay the ACA’s employer mandate for a year, and H.R. 2668, which would delay the ACA’s individual mandate by a year. The bills are not expected to become law since they would require approval by the Democrat-led Senate and President Obama (who has pledged to veto this legislation were it to make it to his desk). President Obama’s pledge to veto the employer-mandate delay was viewed by some as inconsistent, given that his administration recently announced that the employer-mandate would be delayed. Republicans used the legislation to force Democrats to take a politically uncomfortable vote concerning both the individual mandate and the employer mandate.

On July 17, at a hearing on Information Sharing and the Affordable Care Act held by the House Oversight and Government Reform Subcommittee on Energy Policy, Health Care, and Entitlements and the House Homeland Security Subcommittee on Cybersecurity, Infrastructure Protection, and Security Technologies, CMS Administrator Marilyn Tavenner updated Congress on the status of data hub HHS will use to assist the insurance marketplaces to use IRS tax data and other federal government data to verify applicants’ eligibility. Administrator Tavenner told the subcommittees that “… the hub is not a database; it does not retain or store information.” Many House Republicans have suggested or stated that they remain unconvinced.

The House Energy and Commerce Health Subcommittee released draft SGR reform legislation. On July 23rd, Energy and Commerce approved the draft legislation.  If Congress does not come up with a “doc fix,” as it has done each year since the origin of the SGR, physicians treating Medicare patients will face a 24.4 percent cut in reimbursement rates in 2014.


The Administration is continuing its ACA outreach efforts. In new developments, senior White House adviser David Simas attended an event hosted by Campus Progress to answer college activists’ questions, and HHS Secretary Sebelius attended the National Association for the Advancement of Colored People (NAACP) convention, where she called on leaders there to get the word out about the ACA.

The Office of Management and Budget (OMB) issued a statement of administration policy saying President Obama would veto the House bills delaying the employer and individual mandates.

On July 15, the Health and Human Services (HHS) Department released a video saying the implementation of the ACA is running on schedule.


On July 11, Massachusetts Governor Deval Patrick announced that he would not block the repeal of the employer mandate in his state. Massachusetts’ 2006 health care law included a provision that required employers with more than 10 workers to provide health insurance coverage or pay Massachusetts $295 per employee. The Massachusetts 2014 budget planned on repealing the state budget because the federal employer mandate would be in place by then. Patrick’s announcement is significant because this means Massachusetts will not have an employer mandate for 2014, unlike it has in the years since its health care law was enacted.

New York announced this week that insurance premiums would drop 50 percent next year for individuals buying their own coverage in the health insurance marketplaces. It is not expected that all or most states will see such a significant drop in premiums. Unlike most states, New York has barred insurers from rejecting those with pre-existing conditions. Because New York did not simultaneously require all individuals to buy health insurance, those who choose to buy insurance tended to be the sickest and oldest, and due to the high costs of coverage individuals buying insurance in New York faced very high prices. Under the Affordable Care Act, everyone will be required to buy insurance, which will lessen the adverse selection, and accompanying high prices, New York previously saw. On a related note, on July 18, the Obama administration highlighted that rates in the 11 states that have released them so far, premiums for average plans are 18 percent less expensive than predicted by the Congressional Budget Office (CBO).

A group of Michigan state senators are now studying the Medicaid expansion issue and tentatively planning to hold a vote in late August. The state House has already voted to expand Medicaid in the state.

On July 18, Texas Governor Rick Perry signed into law a bill that would ban abortions after 20 weeks of pregnancy, require abortion clinics to meet the same standards as hospital surgical centers, and mandate that a doctor performing abortions be admitted at a hospital within 30 miles of where the abortions are performed. These restrictions are among the most stringent in the nation.


According to an outlook report by Avalere Health, complications in setting up health insurance marketplaces could initially lead to lower enrollment.

To view our compilation of recent health care reform implementation news, click here.

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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