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Health Affairs’ March Issue: The Benefits And Limitations Of Information


March 2nd, 2015

The March issue of Health Affairs contains papers focusing on the benefits—and the limitations—of information-gathering processes as a way to solve health system problems. Studies in this variety issue examine US hospital rating systems, disclaimers on dietary supplements, state prescription drug monitoring programs, the value of US versus Western European cancer care and other topics.

National hospital rating systems show little agreement — what’s a consumer to do?

Matt Austin of Johns Hopkins Medicine and coauthors compared four well-known national hospital rating systems designed for use by US consumers: U.S. News & World Report’s Best Hospitals; HealthGrades’ America’s 100 Best Hospitals; Leapfrog’s Hospital Safety Score; and Consumer Reports’ Health Safety Score. They analyzed ratings covering the time period from July 2012 to July 2013.

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How Many Americans Will Lose Coverage If The Supreme Court Kills The ACA Tax Credits?


March 2nd, 2015

In March, the U.S. Supreme Court is slated to hear King v. Burwell, a case that challenges the authority of the federal government to provide tax credits and other financial assistance to people who buy Affordable Care Act (ACA) coverage through the federal health insurance marketplace. The federal government runs the health insurance marketplace in 34 states where states chose not to set up a state-based exchange.

Estimates on how many people could lose tax credits in these 34 states vary widely from 4.5 million to 13 million. After talking to executives and lobbyists for health care related entities in 20 of the 34 states affected, I believe that about 6.5 million people who have tax credits in 2015 will lose them. The difference in these numbers will be important to policymakers, since politicians are likely to make decisions on how to respond to a Court ruling based on the actual number of their constituents who are receiving tax credits or other support.

In addition, the impact of a Court ruling will be affected by state action. Some observers have questioned whether states will set up exchanges if the Court eliminates tax credits from the federal exchange. These observers have said that establishing a state exchange is costly and time consuming and that most federal exchange states will not take this step. I argue in the following post that setting up a state exchange could be easy and inexpensive if the federal exchange operations are used.

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State Expectations: Setting The Record Straight In King v. Burwell


February 25th, 2015

On Wednesday, March 4th, the Supreme Court will hear the latest attack on the Affordable Care Act (ACA): the case King v. Burwell. The King petitioners allege that the Internal Revenue Service overstepped its authority by issuing regulations authorizing residents of states with federally run exchanges to access premium tax credits. The petitioners claim that Congress intentionally limited access to premium tax credits to residents of state-based exchanges as a way to encourage states to run their own exchanges.

In support, some state officials claim that they interpreted the law in this manner and that it impacted their state’s decision not to operate a state-run exchange. These assertions, like their analysis of the statutory language, fall flat under any serious scrutiny, however.

Between October 2012 and March 2013, with the support of the Commonwealth Fund, the Center on Health Insurance Reforms (CHIR) conducted a comprehensive review of publicly available information in 50 states pertaining to their decisions to operate either a state or federally run exchange.

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Implementing Health Reform: Beginning The Cadillac Tax Regulatory Conversation And Other ACA News (Updated)


February 24th, 2015

The Cadillac high-cost health plan excise tax, which goes into effect in 2018, is one of the last-to-be-implemented provisions of the Affordable Care Act (ACA). It was one of the most controversial provisions of the ACA, which contributed to its delayed effective date. But 2018 is now getting closer, and the Internal Revenue Services (IRS) is beginning a discussion about implementation of the Cadillac plan tax.

The Cadillac plan provision of the ACA will impose a 40 percent excise tax on the cost of employer-sponsored health plans when that cost exceeds certain thresholds. It is projected to be one of the biggest sources of revenue under the ACA; the Congressional Budget Office (CBO) in its 2015 Budget and Economic Outlook Report estimated that it would account for $149 billion in revenue between 2018 and 2225. Of this, however, only one quarter will come from the tax itself, while three quarters will come from increases in taxes on income as employers shift compensation from health benefits to taxable wages.

While the tax will affect few plans initially, it is likely to affect many more plans over time as the cost of health care continues to grow faster than inflation generally. The tax is expected to reduce health care expenditures by individuals, as it will drive employers to increase employee cost sharing as they cut the cost of coverage, and employees are likely to spend less on health care if they have to purchase it out-of-pocket rather than drawing on insurance coverage.

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Implementing Health Reform: New Enrollment Opportunity For Those Subject To 2014 Penalty


February 20th, 2015

In our Health Affairs Blog post of November 7, 2014, Brian Haile and I recommended that the Department of Health and Human Services (HHS) create a special enrollment period to allow individuals who had to pay the individual responsibility penalty for being uninsured for 2014 to enroll in coverage for 2015 so that they would not have to pay a higher penalty for being uninsured for 2015. Other advocates subsequently joined in this call. On February 20, 2015, HHS announced that it is creating such a special enrollment period.

The special enrollment period will run from March 15 to April 30, 2015 and will allow individuals who live in states served by the federally facilitated marketplace website, Healthcare.gov, to enroll in coverage for 2015 if they:

  • Are not currently enrolled in coverage through the Federally Facilitated Marketplace (FFM) for 2015;
  • Attest that when they filed their 2014 tax return they paid the fee for not having coverage in 2014; and
  • Attest that “they first became aware of, or understood the implications of, the Shared Responsibility Payment after the end of open enrollment (February 15, 2014) in connection with preparing their 2014 taxes.”

Coverage will be effective on the first day of May for those who enroll by April 15 and the first day of June for those who enroll thereafter. Individuals who apply will have to pay the penalty for months they were uninsured in 2015 unless they otherwise qualify for an exemption. Centers for Medicare and Medicaid Services (CMS) has also launched a new online tool to help consumers determine who might otherwise be subject to the penalty to see if they are covered by another exemption.

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HHS Proposed Policy On Non-Discrimination: Does It Adequately Protect Children?


February 19th, 2015

On November 26, 2014, the United States Department of Health and Human Services (HHS) published a proposed 2016 Notice of Benefits and Payment Parameters, an omnibus regulation published annually that sets “rules of the road” for the administration of federally regulated insurance plans. Among other matters, this year’s Notice contained a discussion of non-discrimination in coverage.

The concept of non-discrimination in coverage is a basic tenet health plans subject to the Affordable Care Act (ACA)’s “essential health benefit” requirements applicable to non-grandfathered health plans sold in the individual and small group markets (42 U.S.C. §18022, added by PPACA §1302). The non-discrimination standard is a watershed in U.S. law that extends the reach of prior federal civil rights laws and regulates the design, content, and administration of health insurance including Section 504 of the Rehabilitation Act of 1973, the Americans with Disabilities Act, Title VI and VII of the Civil Rights Act of 1964, and the Age Discrimination Act of 1975.

In accordance with its provisions, the HHS Secretary is barred from “mak[ing] coverage decisions, determin[ing] reimbursement rates, establish[ing] incentive programs, or design[ing] benefits that discriminate against individuals because of their age, disability, or expected length of life,” (42 U.S.C. §18022(b)(4)(B)). The provision further requires the Secretary to “take into account” the health needs of “diverse segments of the population including women, children, persons with disabilities, and other groups,” (42 U.S.C. §18022(b)(4)(C)).

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Implementing Health Reform: Preliminary 2015 Enrollment Numbers; Guidances


February 19th, 2015

As probably every reader of this blog knows by now, the Department of Health and Human Services released preliminary totals for plan selection for the 2015 open enrollment period on February 18, 2015. Over 1 million individuals enrolled through the federally facilitated marketplace in the final week, bringing the total enrolled in the FFM to 8.8 million, and the total enrolled through all marketplaces, federally facilitated and state-operated, to 11.4 million. Florida had by far the most enrollees in the FFM with 1.6 million, although Texas also had over a million enrollees.

The 11.4 million number includes up to 200,000 individuals who are being dropped from the rolls because they have not provided adequate documentation of immigration or citizenship status, but does not include up to 150,000 individuals who were “in line” when enrollment closed and who have up to February 22 to enroll. Although there will be some attrition over the next weeks of individuals who do not pay their premiums or find other coverage, HHS seems to have met its goal of 9.1 to 9.9 million effectuated enrollments.

Premium payment arrangements. The Internal Revenue Service continues to struggle with the question of how the Affordable Care Act affects various arrangements through which employers attempt to pay premiums for employees to purchase health insurance coverage in the individual market. The federal agencies have already issued four guidances on this issue over the past two years in January of 2013September of 2013November of 2014, and December of 2014.  On February 18, 2015, it released yet another guidance on this issue, this one focused on small employers.

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Engaging Health Care Consumers: The Lowe’s Experience


February 18th, 2015

Time will tell, but it appears that employers are not giving up on providing health insurance to their employees — even with the availability of health care exchanges. That’s at least what the results of a new study sponsored by the National Business Coalition on Health (NBCH) suggest.

Brian Klepper, CEO of the NBCH, speculated in his recent Health Affairs Blog post: “…there is an alternative view of what is possible in health care, and that self-funding and a willingness to continue trying to control the health care value monster remains alive and vibrant.”

As self-funded employers strive for a value-based health care marketplace, they’re looking at ways to drive value at an individual level — through strategies to engage employees as better consumers and managers of their own health care.

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Implementing Health Reform: Enrollment Figures, Tax Forms, And More


February 13th, 2015

We are rapidly reaching the end of the 2015 open enrollment period, and the pace of enrollment seems to be picking up a bit. On February 11, 2015, the Centers for Medicare and Medicaid Services (CMS) released their enrollment snapshot for week twelve, covering the federally facilitated marketplace from January 31 to February 6.

During that time period, 275,676 individuals selected plans, bringing of enrollees in the federal exchange up to 7,749,375. The Department of Health and Human Services (HHS) reportedly announced on a press call on February 11, however, that 200,000 individuals will be dropped from enrollment in February for failure to satisfactorily document compliance with citizenship or residency requirements.

Enrollment is expected to continue to pick up during the final ten days of open enrollment, as it did last year. CMS has said that if an individual cannot get through at the call center or online on February 15, CMS will make sure that he or she can apply for coverage, but the agency has not announced any further relief nor any new special enrollment periods for 2015. I continue to urge CMS to provide a special enrollment period for people who were subject to the individual responsibility penalty for 2014 to allow them to avoid the penalty for 2015.

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How To Restore The Innovation Ecosystem For Medical Technology


February 10th, 2015

The recent February issue of Health Affairswhich features a series of articles on innovation, provides us with an opportunity to examine the state of America’s innovation ecosystem for medical technology. This ecosystem has produced a myriad of medical advances, ranging from advanced imaging to molecular diagnostics, minimally invasive surgical tools, and incredibly sophisticated implants. These technologies have shortened hospital stays, reduced the economic burden of disease, and saved and improved millions of lives.

But the system is severely stressed. Policy improvements are essential if America is to remain a world leader in medical devices and diagnostics and fulfill its potential for medical progress in this century of the life sciences. In the following blog post, we will look at the current state of the medical technology industry and make some policy recommendations covering regulatory approval processes, payment and coverage policies, and tax policy.

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New Narrative Matters: How Access, Knowledge, And Attitudes Shaped My Sister’s Care


February 6th, 2015

Health Affairs‘ February Narrative Matters essay features a woman who helps her sister get the care she needs when a tooth infection turns into a health emergency. Elizabeth Piatt’s article is freely available to all readers, or you can listen to the podcast.

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King v. Burwell: Congressional Intent And The Statutory Language Are Aligned


February 5th, 2015

On March 4, 2015, the Supreme Court will hear oral arguments in King v. Burwell. That suit was filed by opponents of the Affordable Care Act (ACA) to stop tax-credit premium subsidies from being provided to moderate-income people in 34 states where the federal government is running health insurance exchanges in lieu of the states. According to the Urban Institute, it could result in the withdrawal of such subsidies for 9.3 million moderate-income people by 2016, and, according to the Rand Corporation, enrollment in coverage could drop by 9.6 million.

Some believe the King lawsuit is a contest between, on the one hand, congressional intent that premium subsidies should be provided in all states, versus, on the other hand, statutory language that says the opposite. Those who believe this formulation are half right: they are correct that Congress clearly intended subsidies to be provided to moderate-income families irrespective of whether their state of residence chose to run its marketplace directly instead of leaving it to the federal government; however, they are mistaken about the ACA’s language, which equally clearly indicates that subsidies should be provided in all states.

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Health Affairs Web First: Do Low-Income Consumers In Medicaid Opt-Out States Pay More Out Of Pocket?


January 28th, 2015

In the twenty-three states currently not expanding Medicaid under the Affordable Care Act (ACA), uninsured adults who would have been eligible for that program and have incomes at or above poverty are now generally eligible for subsidies to purchase health coverage in their state’s Marketplace exchange. How would out-of-pocket costs in the Marketplace compare with Medicaid coverage for this group of low-income Americans living in states not expanding Medicaid?

This study, being released by Health Affairs as a Web First, estimated these costs under two simulation scenarios: calculating out-of-pocket costs for families covered by a subsidized silver Marketplace plan and comparing that with coverage under Medicaid. Author Steven Hill found that Medicaid would more than halve these adults’ average annual family out-of-pocket spending ($938 versus $1,948).

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Last Year Was A Wild One For Health Law — What’s On The Docket For 2015?


January 22nd, 2015

Everywhere we look, we see the tremendous impact of new legal developments—whether regulatory or statutory, federal or state—on health and health care. These topics range from insurance to intellectual property to religion to professionalism to civil rights. They remain among the most important questions facing Americans today.

This post is the first in a series that will stem from the Third Annual Health Law Year in P/Review event to be held at Harvard Law School on Friday, January 30, 2015. The conference, which is free and open to the public, brings together leading experts to review major developments in health law over the previous year, and preview what is to come.

The event is sponsored by the Petrie-Flom Center for Health Law Policy, Biotechnology, and Bioethics at Harvard Law School and the New England Journal of Medicine, and co-sponsored by Health Affairs, The Hastings Center, and the Center for Bioethics at Harvard Medical School. Below, we will highlight a few themes that have emerged so far. The conference’s speakers will author a series of posts that follow on more specific topics.

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Implementing Health Reform: FAQs On Taxes And The ACA (January 24 Update)


January 13th, 2015

In the next few days, consumers who enrolled in qualified health plans through the marketplaces in 2014 will begin receiving IRS form 1095-As from the marketplaces, be they the federally facilitated marketplaces (FFMs) or state-operated marketplaces.  The form 1095-A is the form that provides individuals who have enrolled in qualified health plans through the marketplaces the information they need to fill out form 8962, which in turn is the form enrollees will need to reconcile the advance premium tax credits (APTC) they received in 2014 with the premium tax credits they were actually entitled to.  The marketplace also reports the information on the 1095-A to the IRS.

On January 12, 2015, HHS released a series of frequently asked questions about the 1095-A at its REGTAP website, which are reviewed here. This post also briefly covers other ACA-related developments.

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Implementing Health Reform: Open Enrollment Progress For 2015 (Updated)


December 31st, 2014

On December 30, 2014, the Centers for Medicare and Medicaid Services released several reports on enrollment numbers covering the second marketplace enrollment period to date.  It released its first monthly ASPE (Assistant Secretary for Planning and Evaluation) report covering October 15 to November 15, 2014.   (press release here  )  The ASPE report for the first time includes some — very incomplete — information on enrollment in the state-operated exchanges.

CMS simultaneously released a snapshot report covering enrollment in the Federally Facilitated Marketplace (FFM) for the sixth week of open enrollment.

The bottom line is that the reports confirm what we all knew already: The first month of open enrollment is going much better than the early months of open enrollment last year.  As of December 26, 6,490,492 individuals had selected a plan through the FFM.  Only 96,446 selected a plan in Week 6, compared to 3.9 million in week 5, emphasizing again the importance of the December 15 deadline for January 1 coverage in driving enrollment.

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Implementing Health Reform: Proposed Changes To Summary Of Benefits And Coverage, Uniform Glossary (Updated)


December 23rd, 2014

On December 22, 2014 the Departments of Treasury, Labor, and Health and Human Services, stubbornly refusing to allow the rest of us to start our holidays, released a joint notice of proposed rulemaking to amend the Summary of Benefits and Coverage and Uniform Glossary rule (fact sheet).  In conjunction with the proposed rule, the Departments released a proposed updated Uniform Glossary and proposed updated summary of benefits and coverage (SBC) templates, SBC language, instructions, and coverage example narratives and calculators.  The changes proposed will be effective as of the first open enrollment period or plan year beginning on or after September 1, 2015.

The Affordable Care Act requires health insurers to offer to group health plans, and health insurers and group health plans to offer to their applicants and enrollees, SBCs that summarize the coverage offered by the insurer or plan, including coverage and limitations, through the use of a common SBC template.  The SBC allows potential groups and applicants to comparison shop among potential plans, but also helps enrollees to better understand the coverage offered and limitations and restrictions imposed by the plan in which they are enrolled.

The initial SBC rule, promulgated early in 2012, was the end product of a lengthy process and was based on the recommendations of a panel convened by the National Association of Insurance Commissioners.  Since the 2012 rule was issued, however, the agencies have released a stream of frequently asked questions modifying, clarifying, and conditioning the 2012 rules. (FAQs Parts VII, VIII, IX, X, XIV, and XIX) The proposed regulations and accompanying documents incorporate much of this interim guidance, and they update the 2012 rule to take account of the changes made in insurance markets by the 2014 reforms.

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New Health Policy Brief: Reenrollment


December 22nd, 2014

This year open enrollment under the Affordable Care Act (ACA) began on November 15, allowing new customers to sign up for health insurance. Open enrollment also provided current policyholders the chance to change plans and request a redetermination on the amount of subsidy they received. During this second year of open enrollment for the ACA’s insurance Marketplaces, insurers and policy makers are working to keep last year’s enrollees in the system — and the Department of Health and Human Services (HHS) estimates that 95 percent of them are eligible for automatic renewal.

A new policy brief from Health Affairs and the Robert Wood Johnson Foundation (RWJF) examines the pros and cons of reenrollment options for consumers, whether they are using the federal Marketplace or live in states that operate their own exchanges. Automatic reenrollment means that almost seven million people already enrolled will not necessarily need to flood HealthCare.gov and exchanges during open enrollment. On the other hand, it also may discourage consumers from exploring alternative coverage that might better fit their needs and get a more accurate determination of eligibility for subsidies.

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New Findings About The ACA’s Impact On Employer-Sponsored Health Insurance


December 19th, 2014

Since the Affordable Care Act (ACA) was signed into law, some of its critics have predicted that businesses would discontinue offering employer-sponsored health insurance, moving employees into the individual Marketplaces. If widespread dropping of employer-sponsored health insurance were to occur, government costs could increase since many low-wage workers would qualify for federal subsidies in the Marketplaces.

A new study, released today as a Web First by Health Affairs, examined data from the Health Reform Monitoring Survey for June 2013 through September 2014, assessing any early changes of employer-sponsored insurance under the ACA. Authors Fredric Blavin, Adele Shartzer, Sharon Long, and John Holahan report that the percentage of workers with employer offers for health insurance was basically unchanged between June 2013 and September 2014: 82.7 percent versus 82.2 percent. The authors are all affiliated with the Health Policy Center at the Urban Institute, in Washington, D.C. 

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Implementing Health Reform: Enrollment And Reenrollment For 2015 (Updated)


December 16th, 2014

The December 15, 2014 deadline for reenrolling in qualified health plan (QHP) coverage to assure continuous coverage as of January 1, 2015 has come and gone.  Individuals who were enrolled through the federally facilitated marketplace (FFM) for 2014 but did not return to the marketplace to shop for 2015 plans will be passively reenrolled in their 2014 plan or in a plan similar to it.  The 2015 open enrollment period lasts through February 2015, and individuals can return to the FFM at any time before then to change plans.  But the change will not be effective for January 1.

A number of state-operated exchanges—including New York, Massachusetts, Idaho, Rhode Island, Washington, Minnesota, and California—have reportedly either extended the date by which individuals can enroll or reenroll and still have coverage effective January 1 or given individuals who had begun the enrollment process as of December 15 extra time to complete the process for January 1 coverage.  The FFM has not extended the deadline.

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