Health Care Reform update for the week of October 27

A weekly compilation from Aetna of health care-related developments in Washington, D.C. and state legislatures across the country.

Week of October 28, 2013

With Congress now focused on dissecting the troubled rollout of health insurance exchanges, the Obama administration is making modifications to its marketplace schedule and is facing pressure to do more. The administration announced last week that it will issue new guidance pushing back the date by which individuals must have health care coverage or face a penalty. The new date, March 31, 2014, coincides with the end date for the open enrollment sign-up period. Late last week, 10 Senate Democrats signed on to a letter calling on the administration to extend the open enrollment period, by an unspecified period, as well. Another Democratic Senator, Joe Manchin of West Virginia, is urging a one-year delay in the mandate. Meanwhile, experts called in to fix the website are predicting an end to the majority of problems by late November. Even if the projection is accurate, many fear enrollment in exchanges will suffer as a result of the significant rollout issues.

The House Energy and Commerce Committee held a lengthy hearing last week on the initial rollout of the exchanges and the website, with the contractors handling key Affordable Care Act (ACA) implementation issues testifying. They testified that the problems with the website are fixable, but they declined to provide a specific timeframe. In response to questions, the witnesses emphasized that they tested the functionality of the systems they designed and that CMS, in its role as system integrator, was responsible for end-to-end testing of the website.  They testified that end-to-end testing occurred only during the final two weeks of September. Health and Human Services (HHS) Secretary Kathleen Sebelius is expected to testify at another oversight hearing before the House Energy and Commerce Committee on October 30.  In addition, CMS Administrator Marilyn Tavenner is scheduled to testify at an October 29 House Ways and Means Committee hearing.


ARIZONA: With Washington focused on the rocky launch of the federal marketplace enrollment website, HHS Secretary Katherine Sebelius was in Phoenix last week to tour a call center and meet with stakeholders, some of whom are reporting that they are turning to alternatives to cope with the situation. Meritus, the co-op created to offer insurance coverage on the exchange, reported that it is focused on educating the public. Some brokers reported they are assisting clients in completing paper applications for submission by mail. Enrollment in the Arizona Health Care Cost Containment System (Medicaid) has been less problematic, with at least 6,500 people enrolled to date.

CALIFORNIA: Shelley Rouillard has been appointed director of the California Department of Managed Health Care effective December 1, 2013. Rouillard has served as chief deputy director since 2011 and served as deputy director of the California Managed Risk Medical Insurance Board, Benefits and Quality Monitoring Division from 2007 to 2011.  Her appointment requires Senate confirmation. Rouillard is a Democrat and will replace Brent Barnhart, who is retiring.

CONNECTICUT: HealthPocket, a technology company that compares and ranks health plans, has released a study on the state exchange shopping experience and found Access Health CT to be among the best – able to produce a plan comparison on its website within four steps.  The state exchange requiring the most steps (18) to get plan comparisons was Minnesota.  According to the study, the 36 states using the federally facilitated marketplace at require “nearly four times as many steps to produce a health plan comparison page”.

IOWA: Iowa is one of five states and the District of Columbia sharing in a total of $146.1 million in new grants for the development and implementation of a state health insurance exchange.  Iowa will receive $17.5 million.  According to CMS, the grant will be used to support state planning for transition from a federal-state partnership exchange to a state-based marketplace in 2016. This is Iowa’s fourth exchange-related grant from CMS.

MAINE:  Governor Paul LePage was quoted by the press last week as being open to compromise on Medicaid expansion. Two separate Medicaid expansion bills were vetoed by the governor in the more recent legislative session, and the legislature failed to override his vetoes.  Legislators had already indicated they intend to bring a new Medicaid expansion bill before the legislature in early 2014.  There appears to be interest in exploring alternative ways to undertake Medicaid expansion, similar to what Arkansas and Iowa have done. Many are watching how New Hampshire deals with the issue as well.

NEW YORK:  New York State of Health, the state’s health exchange, announced last week that nearly 174,000 New Yorkers have completed the full application process and have been found eligible for health insurance coverage. According to state officials, the state’s completed applications make up more than 30 percent of the applications completed nationwide. To date, 37,030 New Yorkers have fully enrolled for health insurance through the NY State of Health marketplace. Additionally, since Oct. 1, the state’s customer service center operators have provided assistance to more than 77,000 New Yorkers.  Of those fully enrolled, more than 20,000 have been found to be Medicaid eligible.  The state continues to promote its cost estimator tool, which has produced estimates indicating that 75 percent of individuals eligible to purchase through the exchange will be eligible for financial assistance.

OHIO: By a 5-2 vote, the Ohio Controlling Board approved Governor John Kasich’s request for an appropriation to spend federal dollars in 2014 for expansion of the Medicaid program up to 138 percent of the federal poverty level (FPL).  The move will allow coverage to more than 275,000 low-income adults beginning January 2014.  Earlier this month, Governor Kasich announced that the administration had authority under current law to expand the Medicaid program and received federal approval of a state plan amendment to add the individuals under the program.  However, the move has resulted in a lawsuit by a group of House Republicans claiming that the Ohio constitution forbids the Controlling Board from enacting a major policy that diverges from the expressed intent of the General Assembly. The lawsuit filed with the Ohio Supreme Court asks the Controlling Board be ordered to vacate the decision appropriating additional Medicaid funds.


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Covered California giving agents lip service – Articles – Employee Benefit Adviser

Some California agents are not happy with the way the state-run health care exchanges are treating them and there are many more road bumps to cross in the near future, said a San Diego-area broker.

Speaking at America’s Health Insurance Plans 2013 State Issues Conference in Arlington, Va., Bill Hammett IV, president at Hammett Health Insurance Services, said that in the buildup to Oct. 1, California exchange officials relied on brokers heavily and told them they would be an invaluable resource. However, as the exchange has rolled out, “that has not been the case. … The exchanges are only giving us lip service,” Hammett said.

In the most populous state in the nation, California’s agent population represents millions of people between employer clients and their employees, Hammett, past-president of the San Diego chapter of the National Association of Health Underwriters, explained.

While there are more than 17,000 licensed insurance agents in the state, as of last week, only 1,200 have been registered to sell in the health exchange. Yet, Hammett said 5,400 community organizers and unions have been licensed to sell on the exchange. “We [agents] are a little upset,” he added. “There is growing unrest in the agent population with the exchanges.”

With another 5,000 union and community organizers still to be licensed and just 3,000 more agents, those who traditionally were the main source of health insurance will be outnumbered five-to-one, Hammett said. “We are concerned about that, the exchanges living up to their word” to use our services, he said.

In a release, MD Sam Smith, president of the California Association of Health Underwriters said that the group’s leadership has been in constant contact with Covered California and addressed a number of issues found to be holding up the certification process.

Smith further stated the Covered California is “rapidly working through the backlog of agents waiting for formal notice of certification and the uploading of their certified agent status.” Covered California projects that the current backlog will be clear by Tuesday, Oct. 22.

Hammett also believes the exchanges have been misleading about how many employers will drop coverage. Of his 200 employer block, many of them are talking about cutting employees hours to 29 hours a week in order not to be required to provide health insurance coverage, he said. One of his restaurant clients worked with Hammett to determine all 11 of the chain’s eateries could afford only three full-time employees each, and plan to move the other employees to under 29 hours a week.

Further, Hammett said he expects more bumps in the road as the true reach, or lack thereof, of the insurance offered through the exchanges becomes known to consumers. For example, doctor networks, he said, have been kept under wraps on the exchanges. Talking with his insurer friends, he believes they will be “uber skinny” and some major hospital providers are just not going to be in the networks.


Posted by: Phil L | October 21, 2013 4:56 PM

I have no doubt that the Exchange disaster is not a cause of concern for single payer activists because they would be happy to have Obamacare fail so that they can point to the failures of the supposed market-based system, and replace it with Single Payer. The sole purpose of the Exchanges, which duplicate an already efficient and robust broker distribution network, is as a vehicle for them to impose Single Payer. This is already apparent in the design of the website which looks like it was designed by single payer activists without any input from insurance agents. Agents are barely mentioned in the website, and hard to find. The photo above the link to find agents show 4 youthful individuals with mickey mouse looking headsets on top of their heads. They look more like toll free number clerical operators than licensed insurance agents and employee benefit consultants. Whereas the photo above the Certified Enrollment Counselor link shows 4 corporate-looking business people. I don’t know what CEC’s are supposed to look like, but I have been to Healthy Families certification meetings. They don’t look anything like what’s in the covered ca photo. They would look out of place in a corporate conference room.

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Posted by: Phil L | October 21, 2013 4:48 PM

The website is designed to try to downplay or hide the true cost or premium for the plans that people are enrolling into. They try to only show what the cost is after deducting the subsidy that one qualifies for. There are two reasons I can think of why the Administration would want to do this: 1) They don’t want the American taxpayer to know just how monstrous the amount of money is that they will be paying to subsidize everyone, 2) They don’t want you the buyer to know how expensive it would be when you either lose your subsidy or when the Govt. stops funding the subsidies.

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Posted by: Phil L | October 21, 2013 4:37 PM

On Oct.1, after finally completing every possible requirement they asked of me over a 2 month period (i.e. application, classroom, online modules, exam, documents and fee payment) it took the Covered California Exchange another 17 more days to certify me. During these 17 days I called multiple times, endured hour-long phone holds, writing multiple emails and contacting all the Exchange officials I could find, before I was finally certified. And that only happened after I resent to them documents that they had lost for 17 days. Even with the agent certification, I am unable to advise clients because we don’t have access to either the provider networks nor to off-exchange plans. I would be doing a disservice to my clients and a possible liability to me if I were to help them enroll into a plan where they have to go out of network to see their doctors. Moreover, it would be an omission on my part to tell them to enroll into an Exchange plan without having seen what other off-exchange plans are available in the marketplace.

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Posted by: Michael L | October 21, 2013 4:00 PM

Sam and Bill are doing the right thing by holding the exchange accountable to explain how and when the rest of the agents can get certified. I am extremely proud to have worked at Covered CA over the past year to help get thousands of CA agents ready for the new marketplace. Since I left, they have continued to host agent webinars and launched the agent training and website. We’ll see if the backlog is cleared by Oct 22nd. The exchange (and your customers) need agents to be successful!

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Posted by: Jerry T | October 21, 2013 3:35 PM

Not to sound abrasive folks, but, do not be naive. ACA 2010 has as one objective to run insurance agents out of the health care industry. Salesmen are not required in a one payer system. Were there salesmen for Medicare when it was introduced in 1965? Navigator is just a synonym for bureaucrat/gov’t employee and union member paying dues to ultimately be funneled into Congressional coffers at election time. What is our commission on an individual product sale? E.G. say, it is 20% 1st year on $5000 annual premium. That is $1,000 per case. Insurance companies were promised they would be “relieved” of that commission burden if they would support ACA. How? No agents, no commission, to say nothing of their ad campaigns.Gov’t would benefit by increased tax revenue on the insurance companies by this marginal difference in expenses. One payer system makes all of that happen and more. Insurance Companies are supposed to land a windfall through ACA. No? Have you observed the insurance companies’ stock prices since, oh, say, 2010? How much did the insurance industry fight ACA?Those uncertified CA agents appear to me to be the guys and gals who elected to change careers; sell something else other than health insurance.The only reason groups are exempted from the Oct 1 mandate is because the gov’t was concerned its website could not handle the volume. The individual mandate has crashed its systems all by itself. Just wait until groups fall into the mandate. Whatever your group insurance commission income is, blow it a kiss in 2014/15, assuming gov’t websites get fixed. Just sayin’.

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Posted by: mikebraun1 | October 21, 2013 2:20 PM

I am not surprised. In Ca the end goal is to fill the coffers of political appointees and grassroots community organizations. There was a ton of money turned into Acorn and the like.

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Posted by: Michael L | October 21, 2013 2:12 PM

Sam and Bill are doing the right thing by holding the exchange accountable to explain how and when the rest of the agents can get certified. I am extremely proud to have worked at Covered CA over the past year to help get thousands of CA agents ready for the new marketplace. Since I left, they have continued to host agent webinars and launched the agent training and website. We’ll see if the backlog is cleared by Oct 22nd. The exchange (and your customers) need agents to be successful!

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Posted by: Paul W | October 21, 2013 1:50 PM

Is really true that unions and community organizers are selling insurance on the exchange without insurance agent licensed? If anyone thoughts this change would go over smoothly, they need to have their head examine. Typical of we Americans, we will bitch about anything that don’t happen instantaneously and when it does, then we will bitch about it happening to fast.

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Posted by: Dean B | October 21, 2013 1:49 PM

Things are certainly not even that good on the Federally Facilitated Exchange. The certification process was stopped dead in it’s tracks n Oct 1, and has yet to come back on line. But, if you want a true idea of who the administration wants actually selling insurance, take a look at the training and materials provided through the Navigator certification as opposed to what is provided to agents/brokers. They are actually told how the Exchange looks, and given detailed instructions on how to use it, field by field, and where to go for assistance and answers. Their resources are far superior to ours. Make NO mistake–the Obama administration does not want us selling Obamacare.

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Posted by: Wes B | October 21, 2013 1:47 PM

We shouldn’t forget about the Medicare drug expansion that occurred about a decade ago. You would have thought the world was coming to an end with the level of animosity that was generated because of growing pains and the learning curve. But people got through it and now don’t think much about it. Are people really that much more impatient and vile-tempered now? This will pass also, if people can calm down a bit.

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Posted by: Diane | October 21, 2013 1:16 PM

Technical glitches “be darned” the true nightmare is this is not “affordable” nor does it provide “care” as in “access to care”. The plan was to run agents & brokers out! If OOP & deductibles are still high, many are still not receiving health care. What health insurance problem did this solve besides pre-existing & 20 somethings riding parental coat tails??

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Posted by: Joy P | October 21, 2013 1:00 PM

Absolute nightmare! From taking an hour to contact them for information to ease of use for our web portal to faxing applications to a fax machine that rarely answers. Should have been turned over if we have to have this exchange to the private industry to run.

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Posted by: sussman | October 21, 2013 12:53 PM

As usual, Bill gets it and pulls no punches. California and Maryland (my state) were supposed to be “stars” with their own Exchanges, and although broker certification is doing just fine here, getting someone insured (or into the system) has been an ongoing nightmare.Lynda Sussman

via Covered California giving agents lip service – Articles – Employee Benefit Adviser.


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Health Insurance Marketplace Premiums for 2014

This report summarizes the health plan choices and premiums that will be available in the Health Insurance Marketplace. It contains new information, current as of September 18, 2013, on qualified health plans in the 36 states in which the Department of Health and Human Services (HHS) will support or fully run the Health Insurance Marketplace in 2014. Plan data is in final stages but is still under review as of September 18 and may be revised in HHS systems before being displayed for consumers, so this information is subject to change. This analysis also includes similar information that is publicly available from 11 states and the District of Columbia that are implementing their own Marketplace. This report focuses on the plans with the lowest premiums in each state, as consumers are expected to shop for low-cost plans. Nearly all consumers (about 95%) will have a choice of 2 or more health insurance issuers (often many more) and nearly all consumers (about 95%) live in states with average premiums below earlier estimates.

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Health Reform Weekly – Aetna Health Reform Connection

A weekly compilation from Aetna of health care-related developments in Washington, D.C. and state legislatures across the country.

Week of September 30, 2013

A report released by the Department of Health and Human Services (HHS) this week finds that consumers will see lower than projected premiums in the Health Insurance Marketplaces set to go live on October 1st. According to the report, consumers will be able to choose from an average of 53 health plans in the Marketplace.

The majority of consumers will have a choice of at least two different health insurance companies – although some consumers will only have one option available for 2014. Premiums nationwide will also be around 16 percent lower than originally projected – with about 95 percent of eligible uninsured live in states with lower than expected premiums – before taking into account financial assistance.


Congress moved the nation closer to a government shutdown this past weekend as House Republicans voted early Sunday 231-192 to advance a stopgap spending measure to delay implementation of President Obama’s health care law for one year. The House voted just past midnight on Sunday to send the bill back to the Senate following a day of vigorous debate over the Affordable Care Act, which begins open enrollment on Tuesday. House Minority Whip Steny Hoyer, D-Md., reminded his colleagues that Americans had already weighed-in on the health care law in 2012 with the re-election of Obama and accused Republicans of “rampant irresponsibility” that increased the prospects of an Oct. 1 shutdown.

The house measure is certain to be defeated in the Senate, where Majority Leader Harry Reid, D-Nev., has said he will not support any bill that dismantles the law. Obama also said he would veto any such bill in the unlikely event it reaches his desk.


CALIFORNIA: The legislature hosted an informational hearing on the California Health Benefit Exchange and the progress toward ACA implementation. The panel featured Covered California Executive Director Peter Lee and Department of Health Care Services Director (DHCS) Toby Douglas. Lee confirmed that the California Health Eligibility Enrollment Retention System, the state’s one-stop shop for enrollment, will be ready on October 1. There will also be ongoing improvements to the system moving forward. Lee emphasized that the success of Exchange implementation depends on community outreach and engagement. Covered California has a goal of enrolling between 800,000 and 1.8 million people by the end of 2014. Additionally, Douglas projected the state will add 1.4 million to the Medi-Cal system, the state’s Medicaid program.

DELAWARE: The Delaware Department of Insurance (DOI) issued a bulletin regarding specialty tier prescription drug coverage requirements established under recently enacted law limiting maximum out of pocket expenses. The new law imposes dollar limits on specialty tier prescription drug cost-sharing and limits patients’ co-insurance or co-payment fees for specialty tier drugs to $150 per month for up to a 30-day supply of any single specialty tier drug. The bulletin states that the DOI will not promulgate a regulation because the law and the bulletin provide adequate guidance for compliance. The law is effective January 1, 2014.


ILLINOIS: The Administration announced that health plan rates on the state-federal partnership Exchange are 25% below HHS estimates. Of the 165 plans that will be made available by 8 companies, 57 plans will be available in all counties with two individual PPO plans and three small group plans available statewide.


MAINE: The Maine Health Exchange Advisory Committee met for the first time this past week, focusing their attention largely on operational aspects of the federally-facilitated Exchange set to open on October 1st. Legislators created the multi-stakeholder advisory committee via a “joint study order” which enabled it to bypass Executive action. It will meet numerous times over the next year, with a final report due to the Legislature in November of 2014. Both health plans offering products on the Exchange are members of the Committee, and many of the questions raised were directed to them. Concern was expressed about the narrow network offerings, the calculation and impact of family rates, and offerings through the SHOP. The afternoon session was devoted almost entirely to outreach and enrollment with a focus on the role of navigators and how enrollment would be tracked to ensure customers did not fall through the cracks.


MASSACHUSETTS: Earlier this year the US Department of Health & Human Services (HHS) granted Massachusetts a three-year transition period for phasing out certain currently allowed rating factors that are disallowed under the Affordable Care Act (ACA) such as group size, industry and participation rate. Despite the transition period, the Legislature passed a bill requiring the Governor to seek a permanent waiver of these rating factors. In a September 24 letter, HHS rejected Governor Deval Patrick’s request for a permanent waiver, stating that HHS couldn’t find any flexibility in the ACA that would allow such and therefore issuers in Massachusetts will need to be in full compliance with ACA’s rating factors for policy years beginning on or after January 1, 2016.


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