Health Care Reform Implementation Update - September 3, 2013

by Cozen O'Connor

There is only one week left of Congress’ summer recess. While the members have been in their home districts, the agencies in Washington have been finalizing Affordable Care Act (ACA) regulations on everything from the individual mandate to eligibility appeals, and rallies have raged across the country both by those who oppose and those who support the ACA. Arguments continue about whether the exchanges will be ready by October 1, and whether debt ceiling legislation or a continuing resolution are plausible vehicles for opponents of the ACA to chip or hack away at the law. Meanwhile, the ACA continues to root itself into the national dialogue, even making several mentions at this week’s 50 year anniversary commemoration of the Civil Rights March on Washington and Martin Luther King Jr.’s “I Have a Dream” speech.


On August 27, the Internal Revenue Service (IRS) issued a final regulation on governing compliance with the individual mandate of the ACA, “Shared Responsibility Payment for Not Maintaining Minimum Essential Coverage.” The regulation addresses the penalty for not having minimum essential coverage under the ACA. The rule establishes a penalty per person per year of the greater of $95 or 1 percent of household income in 2014, eventually moving up to $695 per person or 2.5 percent of household income per person per year in 2016. The rule also details exceptions to the individual mandate.

On August 27, the Department of Health and Human Services (HHS) notified insurance companies that it would delay signing final agreements with the plans for the ACA’s new insurance exchanges until mid-September. These approvals are the last step in what has been a long process for insurance companies trying to sell their products on the health insurance exchanges. The delay moves this last step just a couple of weeks before open enrollment begins.

On August 28, the Centers for Medicare & Medicaid Services (CMS) posted its “Program Integrity: Exchange, SHOP, and Eligibility Appeals” final rule. The rule sets forth standards for eligibility appeals, verification of eligibility for minimum essential coverage, treatment of incomplete applications, and establishes additional consumer protections regarding privacy and security. It also clarifies the roles of agents, brokers and issuer application assisters in assisting consumers with obtaining exchange coverage; provides for the handling of consumer cases; establishes non-discrimination standards for methods of premium payment; and sets forth provisions regarding a state’s operation of the Small Business Health Options Program (SHOP) exchanges.

CMS’s 217-page manual for navigators, the Health Insurance Marketplace Navigator Standard Operating Procedures Manual, is available online. The manual provides guidance on exchanges generally, on standard operating procedures for navigators, as well as general customer service guidelines.

On August 29, in response to the recent Supreme Court ruling on the Defense of Marriage Act, HHS announced that access to care in the same nursing home as one’s spouse is extended to Medicare beneficiaries in same-sex marriages. This coverage will apply equally to all seniors in private Medicare plans who are in legally recognized marriages, regardless of where they reside.


The 50th Anniversary of the Civil Rights March on Washington and Martin Luther King Jr.’s “I Have a Dream” speech provided several opportunities for speakers to tout the benefits of the Affordable Care Act. Among its notable shout-outs were those from President Obama and former President Bill Clinton. In the lead up to the ceremony in a radio interview, President Obama said Martin Luther King Jr. would approve of the Affordable Care Act. In Clinton’s speech, he said that he and his listeners “cannot relax in our efforts to implement health care reform in a way that ends discrimination against those with preexisting conditions, one of which is inadequate income to pay for rising health care.”


House Republican leaders continue to consider using the national debt limit and other spending legislation as leverage to delay implementation of the Affordable Care Act. Others are pushing for a vote to fund the government without funds for the ACA. Senators Rand Paul (R-Ky.), Mike Lee (R-Utah), and Ted Cruz (R-Texas) will headline the “Exempt America Tour” rally on September 10, urging the defunding of the Affordable Care Act.

Republicans from the House Committees on Ways and Means and Energy and Commerce released a White Paper addressing possible ideas for reforming Medicare. The joint paper reviews 1) the traditional Medicare cost-sharing framework and the impact current thresholds have on beneficiaries; 2) the impact of supplemental coverage with low cost-sharing requirements that reduce incentives to seek cost-effective care; and 3) how modernizing the traditional cost-sharing features could better align beneficiary incentives, ensure beneficiaries greater out-of-pocket predictability and reduce overall Medicare costs.

On August 23, in response to the HHS Inspector General’s report that said the program for rural health care providers had become too bloated and a proposal that Medicare reimbursement rates be cut for critical access hospitals, a bipartisan group of 20 senators signed on to a letter defending these critical access hospitals. Critical access hospitals serve rural communities and populations without easy access to other health care providers.

On August 28, Sen. Rob Portman (R-Ohio) sent a letter to Sec. Sebelius and Administrator Tavenner expressing his concerns regarding the upcoming enrollment of individuals in the health insurance marketplaces. He suggests in his letter that since the infrastructure is not in place to handle the large number of individuals who will be obtaining their insurance through the marketplaces, open enrollment be delayed “until the necessary leadership and preparation are in place to ensure that the Marketplace can handle the volume on day one of enrollment.”

On August 26, Representative Ron DeSantis (R-Fla.) announced a bill that would prohibit congressmen and women and their staffs from receiving employer contributions to their health care costs under the ACA.


On August 27, the Michigan state Senate passed a plan to expand Medicaid coverage with a vote of 20-18, making Michigan the 25th state to do so as part of the ACA. Due to its late decision, Michigan may be several months behind other states expanding their Medicaid programs.


On August 29, the Rand Corporation released a new report, in which it argues that the ACA will not lead to a widespread increase in premiums in the individual health insurance market.

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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