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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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Implementing Health Reform: ACA-Related Tax Penalties Waived; High Court Turns Back Oklahoma AG (Open Enrollment, CO-OP UpDate)


January 27th, 2015

The Internal Revenue Serviceissued a Notice on January 26, 2015 stating that it intends to grant relief from certain penalties that could otherwise be imposed on individuals who have a balance due on their 2014 taxes because the amount that they received in advance premium tax credits exceeded the amount that they were actually due.  The penalties are those that would otherwise apply for late payment of a balance due and for underpayment of estimated taxes.  The relief only applies to individuals who meet certain requirements and only for 2014.

Section 6651(a)(2) of the Internal Revenue Code imposes a penalty for a failure to pay the amount of taxes owing on a tax return by the date it is due, which is usually April 15 of the following year.  It does not apply if the failure was due to a reasonable cause.  Section 6654(a) imposes a penalty for underpayment of estimated taxes, although it does not apply unless the underpayment exceeds certain limits and can be waived under certain circumstances.

Individuals who received advance premium tax credits during 2014 must reconcile these amounts with the premium tax credits they were actually owed.  In some instances this will result in an overpayment, which must be repaid to the IRS.  Absent the relief granted by this Notice, some of enrollees who received too much in premium tax credits might owe a penalty for failing to repay the overpayment by April 15 or for failing to have paid enough in estimated taxes to cover the amount due.

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New On GrantWatch Blog


January 27th, 2015

Health Affairs GrantWatch Blog brings you news and views of what foundations are funding in health policy and health care.

Here are the most recent posts:

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Additional Requirements For Charitable Hospitals: Final Rules On Community Health Needs Assessments And Financial Assistance


January 23rd, 2015

On December 29, the Department of the Treasury and the Internal Revenue Service released long-awaited final regulations implementing Affordable Care Act provisions that impose additional obligations on charitable hospital organizations covered by §501(c)(3) of the Internal Revenue Code.  Published in the Federal Register on December 31 2014, the regulations are massive, consolidating a series of prior proposals into a single final body of regulatory law.  The regulations affect more than 80 percent of U.S. hospitals, both the 60 percent that operate as private nonprofit entities and the 23 percent that operate as governmental units.

Because state and local governments typically condition their own sales, property, and corporate income tax exemptions for nonprofit entities to a hospital’s §501(c)(3) status, the final regulations carry broad and deep implications from both a policy and financial perspective.  According to the Congressional Budget Office the 2002 the national value of the federal tax exemption exceeded $12 billion, a figure that undoubtedly has risen considerably.

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Early Evidence On Medicare ACOs And Next Steps For The Medicare ACO Program (Updated)


January 22nd, 2015

Note: Pratyusha Katikaneni and Carmen Diaz also contributed to this post. They are both research assistants at the Engelberg Center for Health Care Reform, The Brookings Institution.

On December 1, CMS released a Notice of Proposed Rulemaking (NPRM) for the Medicare Shared Savings Program (MSSP), which requests feedback for changes CMS is considering for the Medicare accountable care organization (ACO) programs in 2016 and beyond. The proposal suggests significant potential alterations to the program, many of which we recently reviewed, that would address major issues that ACOs and others have raised: uncertainty and inexperience at transitioning to increasing levels of risk, lack of timely and accurate data, changes in attributed patient populations from year-to-year, and financial benchmarks that fail to account for regional variations and continue to reward high ACO performance over time.

The proposed rule raises more issues than it settles, but it clearly indicates that CMS is open to meaningful public comments and will make important revisions in the MSSP. However, the proposal also illustrates the challenges of resolving these issues in a way that both assures substantial ACO participation and improvement, as well as Medicare savings.

Ideally, big changes in key features in a major program like the MSSP would be based on extensive empirical evidence on what determines success in the program. Unfortunately, only limited evidence, including case studies and some comparative data, is available on the determinants of success for Medicare ACOs, and thus on the MSSP. Data released by CMS in September, which we previously reviewed, showed that the MSSP has generated over $700 million in savings to date relative to the spending benchmarks in the program. This is around 1 percent of the costs of care for beneficiaries affected by Medicare ACO initiatives.

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Unpacking The Medicare Shared Savings Proposed Rule: Geography And Policy


January 22nd, 2015

The Centers for Medicare and Medicaid Services (CMS) recently announced a Notice of Proposed Rulemaking (NPRM) for Medicare Shared Savings Program (MSSP) Accountable Care Organizations (ACOs). The rulemaking contains several proposals that if enacted, would fundamentally change the underlying incentives for providers to participate in the program. These proposed reforms address issues such as data sharing, renewals of participation agreements, beneficiary attribution, incentives to move to two-sided risk, and lastly, reforms to the benchmark calculations against which ACOs compete to earn savings.

The NPRM comes on the heels of a September 16, 2014 release of performance results for MSSP ACOs that began their performance years by 2013. Under the current program rules, ACOs that successfully reported quality performance data and whose savings exceeded their “minimum savings rate” were eligible to share in savings with Medicare. The MSSP program allows ACOs to choose either one-sided risk (Track 1, only upside potential to earn savings) or two-sided risk (Track 2, both upside and downside potential to earn savings/incur losses) with the final sharing amount based on achieving quality targets (up to 50 percent for Track 1 and 60 percent for Track 2). A vast majority of ACOs enrolled in Track 1, the one-sided risk option. Of the 220 ACOs in the program that participated in the first performance year, 53 earned shared savings, 52 saved money but not enough to meet the required “minimum savings rates,” and the other 115 did not accrue savings (spending on patients assigned to the ACO was greater than projected).

In February 2014, the CMS asked stakeholders for input as to how to improve its ACO programs, feedback which they used to generate the NPRM. Many ACOs and other stakeholders argued that failures to achieve savings over and above minimum savings rates were a partial result of residing in low spending areas. In this post, we examine the merits of this contention and consider the policy implications of our results and their bearing on some of the modifications of the MSSP program that CMS has proposed. We also discuss other strategies for improving the program CMS did not mention in the NPRM.

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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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Moving From Mandate To Reality: A Roadmap For Patient And Family Engagement


January 20th, 2015

The 2010 Affordable Care Act (ACA) moved patient and family engagement to center stage in health care reform. The law mentions “patient-centered care” at least 40 times, with explicit references to patient engagement, patient experience, health literacy and shared decision making. Evidence is growing that meaningful patient and family engagement can help achieve the triple aim of better quality, better outcomes and lower health care costs and substantially reduce preventable harm.

Yet, despite these advances, the full promise of engagement remains mostly untapped, and much confusion remains about what constitutes meaningful patient and family engagement, and importantly, how to translate this evidence broadly into routine health care practice.

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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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Medicaid Expansion Post Leads Health Affairs Blog 2014 Top-Fifteen List


January 8th, 2015

As we begin 2015, we present the fifteen most-read Health Affairs Blog posts from 2014. Topping the list is “Opting Out Of Medicaid Expansion: The Health And Financial Impacts,” by Sam Dickman, David Himmelstein, Danny McCormick, and Steffie Woolhander. “Low-income adults in states that have opted out of Medicaid expansion will forego gains in access to care, financial well-being, physical and mental health, and longevity that would be expected with expanded Medicaid coverage,” the authors write, and they offer a state-by-state projection of these consequences.

Next on the list is Susan DeVore‘s overview of health care trends to watch in 2014, followed by David Muhlestein‘s look at the likely growth of accountable care and an examination of declining inpatient hospital utilization by Robert York, Kenneth Kaufman, and Mark Grube. The list also includes two posts from Tim Jost’s comprehensive series on implementing the Affordable Care Act, on waiting periods for employer-sponsored health insurance and Medicaid asset rules.

Stay tuned for the 2014 most-read lists for Health Affairs journal and GrantWatch Blog.

The full top-fifteen list is below:

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Health Affairs’ January Issue: Aging And Health


January 5th, 2015

The January issue of Health Affairs includes a number of studies examining issues pertaining to aging and health or health care. Other subjects covered include: the effect of Medicare’s Hospital Compare quality reports on hospital prices; how the Affordable Care Act’s provisions impact Americans shouldering high medical cost burdens; and whether California’s Hospital Fair Pricing Act has benefited uninsured patients.

Content on aging and health was supported by the John A. Hartford Foundation.

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Implementing A Care Planning System: How To Fix The Most Pervasive Errors In Health Care


January 2nd, 2015

Editor’s note: This post is part of a periodic Health Affairs Blog series on palliative care, health policy, and health reform. The series features essays adapted from and drawing on a recent volume, Meeting the Needs of Older Adults with Serious Illness: Challenges and Opportunities in the Age of Health Care Reform, in which clinicians, researchers and policy leaders address 16 key areas where real-world policy options to improve access to quality palliative care could have a substantial role in improving value.

In the course of a single life time, medical science has made unprecedented strides in managing advanced illness. As good as the United States health care system is, it is nonetheless prone to serious error. In 2000, the Institute of Medicine estimated that as many as 268 patients die each day due to preventable hospital errors.

Although many safety issues are being addressed successfully, a significant safety concern remains. We know that many of the sickest patients suffer needlessly in their final weeks and months of life because they receive treatments that offer little benefit but great burden — treatments that are not aligned with patients’ values and goals. Although the vast majority of health care professionals are well trained and compassionate, they often work in systems organized for productivity — systems that simply do not provide sufficient opportunity for health professionals to get to know a patient and develop relationship-based perspectives. Even when patients’ perspectives become known, few mechanisms exist to document and communicate them across settings of care and over time.

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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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Rethinking The Gruber Controversy: Americans Aren’t Stupid, But They’re Often Ignorant — And Why


December 29th, 2014

M.I.T. economist Jonathan Gruber, whom his colleagues in the profession hold in very high esteem for his prowess in economic analysis, recently appeared before the House Committee on Oversight and Government Reform. Gruber was called to explain several caustic remarks he had offered on tortured language and provisions in the Affordable Care Act (the ACA) that allegedly were designed to fool American voters into accepting the ACA.

Many of these linguistic contortions, however, were designed not so much to fool voters, but to force the Congressional Budget Office into scoring taxes as something else. But Gruber did call the American public “stupid” enough to be misled by such linguistic tricks and by other measures in the ACA — for example, taxing health insurers knowing full well that insurers would pass the tax on to the insured.

During the hearing, Gruber apologized profusely and on multiple occasions for his remarks. Although at least some economists apparently see no warrant for such an apology, I believe it was appropriate, as in hindsight Gruber does as well. “Stupid” is entirely the wrong word in this context; Gruber should have said “ignorant” instead.

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Sovaldi, Harvoni Payment Issues Lead Health Affairs Blog November Most-Read List


December 24th, 2014

A piece by Laura Fegraus and Murray Ross on the challenges of paying for lifesaving but high-priced drugs like Sovaldi and Harvoni from was the most-read Health Affairs Blog post for November. This was followed by a critical analysis of workplace wellness programs from Al Lewis, Vik Khanna, and Shana Montrose.

Next came a post on the 2016 Notice of Benefit and Payment Parameters Proposed Rule from Tim Jost, and then a look at health care policy after the mid-term elections from James Capretta.

The full top-ten list for November is below.

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Health Insurance Rate Setting: Time To Raise The Bar And Lift The Veil Of Secrecy


December 24th, 2014

Over 15 million Americans stand to benefit from a strong health insurance rate review system, with the number growing each year. But in many states the rate review laws—and how they are carried out—fall short. Health insurance is one of the most expensive purchases consumers make, it is vital to the financial and physical health of their families, and it is required under the Affordable Care Act.

It is, therefore, important for insurance regulators to ensure consumers pay a fair price for their coverage. At the recent National Association of Insurance Commissioners (NAIC) meeting, we, along with two other organizations, presented a set of recommendations designed to strengthen the rate review process at both the state and federal level so that all consumers will be assured fairly priced health insurance.

The Affordable Care Act introduced new, important protections for consumers, while at the same time retaining a large role for state policy and regulation. This framework resulted in inconsistent policies across states. States that expanded Medicaid sit adjacent to states that did not. Some states operate their own insurance Marketplace, while consumers in other states use the federal Marketplace.

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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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Implementing Health Reform: Wraparound Coverage Excepted Benefits And Draft 2016 Letter To Issuers (Updated)


December 20th, 2014

In December 19, 2014, in what one hopes were their last major regulatory actions before the holidays, the Departments of Labor, Health and Human Services, and Treasury released a proposed rule on a new excepted benefit for wraparound coverage, while the Centers for Medicare and Medicaid Services released a Draft 2016 Letter to Issuers in the Federally Facilitated Marketplace.

This post will describe the wraparound coverage proposed rule.   It will be updated in the next day or two to analyze the letter to issuers (issuers being the Affordable Care Act word for insurers.)  I will note briefly, however, that the letter to issuers is very similar to the 2015 letter to issuers, with two major exceptions.  First, because open enrollment for 2016 begins on October 1, rather than November 15, as in 2015, the time frame for completing regulatory review begins earlier and is quite compressed.  Second, the 2016 letter picks up on a few new regulatory initiatives for 2016, such as attempts to provide more accurate provider directories and formulary information.  These changes will be explored more thoroughly in the update to this post.

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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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