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 healthcare.gov website, with the contractors handling key Affordable Care Act (ACA) implementation issues testifying. They testified that the problems with the healthcare.gov 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 healthcare.gov 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.
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.
SACRAMENTO, Calif. — A second health insurer notified state regulators Tuesday that it will stop selling individual policies in California.
UnitedHealthcare announced it will no longer offer individual insurance plans after the end of the year. It will focus instead on its core business of group plans for large and small employers.
“Our individual business in California has always been relatively small and we currently serve less than 8,000 individual customers across the state,” the company said in a statement. “Over the years, it has become more difficult to administer these plans in a cost-effective way for our members in California.”
The announcement comes two weeks after Aetna Inc. said it also plans to exit California’s individual insurance market. Both insurers avoided participating in the state exchange that is being established as part of the Affordable Care Act.
State Insurance Commissioner Dave Jones says the departure of UnitedHealthcare and Aetna is bad news for consumers.
“While both UnitedHealthcare and Aetna have a very small share of California’s individual health insurance market, their departure means less choice, less competition, and more market consolidation by the remaining big three health insurers – Anthem Blue Cross, Blue Shield of California, and Kaiser – which means an increased likelihood of even higher prices from those health insurers downstream,” Jones, a Democrat, said in a statement.
According to 2011 figures compiled by the California HealthCare Foundation, Anthem Blue Cross, Blue Shield and Kaiser have 87 percent of the individual market.
Starting Oct. 1, those seeking to buy their own health insurance will be directed to Covered California, the state’s new exchange, where 13 insurance carriers will sell individual policies.
Aetna and UnitedHealthcare chose not to participate in the exchange.
A weekly compilation from Aetna of health care-related developments in Washington, D.C. and state legislatures across the country.
Week of July 22, 2013
It’s been more than three years since the adoption of the Affordable Care Act (ACA), but the public relations battle over the law continues. President Obama last week kicked off a campaign to educate Americans and build enthusiasm for the law with a White House event that touted costs savings under the law. The event, however, came on the heels of two Republican-led House votes that propose delays in implementing both the ACA’s employer mandate and individual mandate. The House has voted 37 times to repeal all or part of the President’s signature health care law. Supporters of the law last week cited newly approved health insurance rates in New York as evidence that the ACA is helping to drive down costs – average approved rates will be 50 percent lower than what’s currently available in the state. But a Society of Actuaries report clarifies the ACA’s impact on rates will vary significantly across state borders, with many states likely to see significantly higher rates. The lower rates for New York reflect the fact that the state has among the highest premium costs in the nation because of health reforms passed in the 1990s without a coverage mandate.
The House passed two bills last week that would delay key provisions of the ACA. By a vote of 251 to 174, the House approved legislation proposing a one-year delay in implementation of the ACA’s individual mandate. Twenty-two Democrats joined a majority of Republicans in voting for the legislation. The House also approved legislation proposing a one-year delay in implementation of the ACA’s employer mandate. Thirty-five Democrats joined all but one Republican in voting for the legislation. Both bills fell short of the two-thirds majority needed to override a presidential veto. The bills are not expected to be considered on the Senate floor.
CALIFORNIA: As expected, Medicaid expansion and several other ACA-related matters were passed by the legislature in a special session. Special session legislation is effective 91 days after adjournment. The regular legislative session has adjourned for summer recess and will reconvene on August 12. The crossover deadline – the date by which legislation passed by the House or Senate must be forwarded to the other chamber – for 2013 legislation was May 31. Bills that did not meet the deadline cannot advance this year and instead will carry over to the 2014 session. More than 2,200 bills have been introduced this year. In other news, Anthem Blue Cross announced that it will not be participating in California’s small-business exchange. Anthem is the state’s largest small group insurer. It will still participate off the exchange and in the state’s individual exchange in 2014.
MASSACHUSSETTS: The 2014 budget signed into law by Governor Deval Patrick contains several significant health care-related changes. Effective July 1, 2013, the budget eliminates the $295 per employee Fair Share assessment that employers have been paying under state health reform since 2006. In addition, the newly created Center for Health Information and Analysis (CHIA) was funded at $26.7 million. This amount is financed by an assessment of 50 percent on surcharge payers and 50 percent on hospitals. The Department of Mental Health (DMH) is required to expend not less than $3.1 million on the Massachusetts Child Psychiatry Access Project and DMH may assess surcharge payers for the services rendered to commercial members. The budget moves the administrative cost for operating Health Safety Net Funding outside of the annual appropriations of the fund, and the administrative costs will be split 50/50 between the acute hospitals and surcharge payers. Finally the budget requires the Division of Insurance and MassHealth (Medicaid) to implement regulations by October 1, 2013 to create a process for carriers and MassHealth’s programs to certify and specify their compliance with the federal and state mental health parity laws.
NEW HAMPSHIRE: The Medicaid Expansion Study Commission met last week and will continue meeting through much of the summer to explore the possible impact of proposed Medicaid expansion in the state. This week, the commission will hear from representatives of Health and Human Services regarding the Medicaid program and managed care, Medicaid changes under the ACA regardless of expansion, fiscal impacts and new revenues under various expansion options, and changes to uncompensated care. The Insurance Department will also provide information about the state’s health insurance exchange as it relates to Medicaid. An August 30 meeting will be dedicated to taking public comments. Materials can be found on the Commission’s website. Legislative leaders could call a special session to vote on Medicaid expansion after the commission files its report.
NEW JERSEY: The Department of Banking & Insurance has issued a bulletin amending the Individual Health Coverage Program (IHC) and Small Employer Health Benefits Program (SEH) rating rules under the ACA, while also significantly changing how medical loss ratio (MLR) under the ACA is calculated in the state. This bulletin clarified rating requirements beginning January 1, 2014 with respect to rate bands and separate rating pools. Additionally, it noted the new taxes and fees effectively imposed under the ACA were never anticipated under current New Jersey law and therefore should be excluded by carriers when calculating MLR. New Jersey’s MLR criteria differs significantly from that of the federal government in that previously taxes have essentially been counted as an administrative expense.
NEW MEXICO: State officials announced last week that the Centers for Medicare & Medicaid Services (CMS) has approved the state’s plan to reform Medicaid. Under the new Centennial Care program, Medicaid recipients will be responsible for new copays for some services, including a $3 fee for brand name drugs. Medicaid managed-care organizations will hire care coordinators to monitor the use of health and behavioral services. The state plans to implement these and several other program reforms in 2014, at the same time it expands Medicaid eligibility. The program currently serves 550,000 New Mexicans. An estimated 170,000 additional residents will become eligible for coverage under the expansion.
NEW YORK: The Cuomo administration announced that it has approved health insurance plan rates for 17 insurers seeking to offer coverage through New York’s health exchange. Four Medicaid-only plans have filed to offer individual coverage on the exchange; additionally several new players to the state’s insurance market have filed products largely to serve the metro-New York City area. While the rates published by the administration are lower than current direct-pay market rates, the cost of coverage may still be out of reach for many of the 600,000 estimated to become eligible to purchase coverage through the exchange. Fewer plans submitted products for New York’s SHOP.
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