Blog Home

Archive for the 'States' Category




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.

Read the rest of this entry »

The Dane Difference: Why Are Dane County’s Exchange Premiums Lower?


December 18th, 2014

During the next few years, states and the federal government will likely seek solutions to control costs and improve quality in the Affordable Care Act (ACA) health insurance marketplaces. State and federal policymakers should look carefully at the decades-long success of the Wisconsin State Employee Health Plan (WSEHP) in controlling the rapid rise of health insurance costs in Dane County—where Madison, Wisconsin’s state capital, and the University of Wisconsin, are located—as they seek to improve the effectiveness of the ACA’s marketplaces and health insurance costs in general.

The WSEHP consistently obtains substantially lower health insurance premiums in Dane County than in Wisconsin’s 71 other counties. In 2013, an individual plan in the WSEHP was about $1,400 cheaper annually in Dane County, or 16 percent less than the average in the rest of the state; and a family plan was about $3,500 cheaper, also a 16 percent difference. This Dane difference has existed for at least a decade, with the gap slowly widening over that time.

Why does WSEHP get much lower premiums in Dane County than in the state’s 71 other counties, and what lessons can policymakers learn from this difference?

Read the rest of this entry »

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.

Read the rest of this entry »

California’s Proposition 46 And The Uncertain Future Of Medical Malpractice Liability Reform


December 10th, 2014

On November 4, 2014, Californians voted against Proposition 46, an unprecedented statewide ballot initiative that would have, among other things, raised the $250,000 cap on noneconomic damages to $1.1 million and indexed it to the rate of inflation in future years. The margin was significant — 67 percent voted against it.

For nearly 40 years, noneconomic damages, which entail payments to patients for pain and suffering resulting from medical malpractice (as opposed to economic damages such as lost wages and medical costs), have been at the forefront of debates over the U.S. medical liability system. Currently, 22 states have caps on noneconomic damages of varying sizes in place. If it had passed, the ballot initiative would have raised the cap on noneconomic damages in California from among the most restrictive to the least restrictive among all states with caps.

Opponents of Proposition 46, and supporters of malpractice reform more generally, argued that raising the noneconomic damages cap would have increased malpractice awards and subsequently malpractice premiums, which would be passed on to patients and insurers as higher costs.

Read the rest of this entry »

Section 1332 Waivers And The Future Of State Health Reform


December 5th, 2014

Editor’s note: This post is part of a series of several posts stemming from presentations given at “The Law of Medicare and Medicaid at Fifty,” a conference held at Yale Law School on November 6 and 7.

The Affordable Care Act (ACA) turbocharges state innovation through a number of provisions, such as the creation of the Center for Medicare & Medicaid Innovation, funding for states to establish customized insurance exchanges, and Medicaid reforms such as health homes and projects geared toward the dual eligible population. Yet another component of the law holds even more potential for broad reform. Buried in Section 1332 of the law is a sparkplug for innovation called the State Innovation Waivers program.

Also known as 2017 waivers or Wyden waivers, 1332s offer wide latitude to states for transforming their health insurance and health care delivery systems. According to the statute, states can request that the federal government waive basically every major coverage component of the ACA, including exchanges, benefit packages, and the individual and employer mandates. But the cornerstone of 1332 waivers is the financing. To fund their reforms, states can receive the aggregate amount of subsidies—including premium tax credits, cost-sharing reductions, and small business tax credits—that would have otherwise gone to the state’s residents. Depending on the size of the state, the annual payment from the federal government for alternate coverage reform could reach into the hundreds of millions or even billions of dollars.

Read the rest of this entry »

How Do Alternative Payment Models Fit In With State And National Reform Efforts?


December 1st, 2014

Editor’s note: This post is part of a periodic Health Affairs Blog series, which will run over the next year, looking at payment and delivery reforms in Arkansas and Oregon. The posts will be based on evaluations of these reforms performed with the support of the Robert Wood Johnson Foundation. The authors of this post are part of the team evaluating the Oregon model.

The Affordable Care Act has affected health care at almost every level. Extensive experimentation within states continues to create changes. Given all these shifts, it is helpful to step back and consider how alternative payment models (APMs) fit in with these reforms, and why they are critically important.

Many describe the Affordable Care Act as a means to expand coverage, with relatively little emphasis on controlling costs. This is an oversimplification — accountable care organizations are designed to address costs. New “productivity adjustments” in the Medicare program are also intended to check spending growth. But these changes, while real, represent a patchwork approach to controlling costs that probably do not address the underlying problem.

Read the rest of this entry »

Implementing Health Reform: Minimum Essential Coverage And The Multi-State Plan


November 24th, 2014

Two earlier posts this past weekend analyzed the massive Department of Health and Human Services 2016 Benefit and Payment Parameter Proposed Rule, released on November 21.  Also on November 21, the Internal Revenue Service of the Department of the Treasury released a final rule on Minimum Essential Coverage and Other Rules Regarding the Shared Responsibility Payment for Individuals, while the Office of Personnel Management released proposed modifications to the multi-state plan (MSP) program rule.  This post explores these rules.

Minimum Essential Coverage

The ACA requires Americans to either maintain “minimum essential coverage” (MEC) or pay a tax.  There are a number of exceptions to the requirement, however, and the concept of MEC can become quite complicated.  The final rule published by the IRS provides guidance as to the meaning of MEC and the rules governing some of the exceptions.

Read the rest of this entry »

Implementing Health Reform: 2016 Benefit And Payment Parameters Proposed Rule, Insurance Provisions


November 23rd, 2014

On November 21, 2014, the Centers on Medicare and Medicaid Services of the Department of Health and Human Services released its proposed Benefits and Payment Parameters (BPP) RulePart I of this post examined the benefit provisions of this proposed rule. This post will analyze the parts of the rule that deal with the insurance market reforms; the reinsurance, risk adjustment, and risk corridor programs; health insurance rate review; and the individual and SHOP exchanges.

New Definitions Of ‘Plan’ And ‘State’

The regulation begins with a modified definition of the term “plan.”  The terms “plan” is important in the ACA regulations.  A plan has been defined, with respect to a health insurer, as the combination of a benefit package, metal tier, and service area.  The new definition adds to this combination cost-sharing structure and provider network, so that plans that differ in their cost-sharing structure (deductibles, copayments, or coinsurance) or provider networks are different plans, even if they are offered at the same metal tier.  This definition becomes important, for example, in determining whether a plan offered outside the exchange is the same as a qualified health plan (QHP) offered in the exchange and can thus participate in the risk corridor program.  The proposed regulations later propose that the unreasonable rate review regulation applies at the plan level.

Read the rest of this entry »

Implementing Health Reform: 2016 Benefit And Payment Parameters Proposed Rule, Consumer Provisions; Hardship Exemptions


November 22nd, 2014

On November 15, 2014, the marketplaces reopened for 2015.  Anecdotal reports indicate that in most places enrollment and reenrollment are running smoothly.  But the Centers of Medicare and Medicaid Services (CMS) of the Department of Health and Human Services (HHS) is looking forward to 2016.  On November 21 CMS published its massive 2016 Notice of Benefit and Payment Parameters (BPP) Proposed Rule  with accompanying fact sheet.  It also published the draft 2016 actuarial value calculator and draft actuarial value calculator methodology for 2016.  Finally, CMS published a guidance on hardship exemptions for certain individuals.

Not to be outdone, the Department of the Treasury, Internal Revenue Service released its final regulation on Minimum Essential Coverage and other Rules Regarding the Shared Responsibility Payment for Individuals, together with a Notice regarding Individual Shared Responsibility Payment Hardship Exemptions that May be Claimed on a Federal Income Tax Return Without Obtaining a Hardship Exemption Certificate from the Marketplace and a Revenue Procedure setting out indexed adjusted percentages of income that will be used for determining the level of contributions expected of individuals before premium tax credits become available, the affordability threshold for the shared responsibility payments unaffordability exemption, and the threshold for determining whether employer coverage is affordable for purposes of determining eligibility for tax credits.

Finally, the Office of Personnel Management released a lengthy proposed rule proposing modifications in the multi-state plan program.  These rules, proposed rules, and guidances will be addressed in a series of posts over the next several days.  This post will address primarily the consumer-facing provisions of the BPP proposed rule, focusing on changes in benefits.  A second post will follow, discussing the provisions of the rule more relevant to insurers, such as proposed changes in the reinsurance, risk adjustment, and risk corridor rules.  A final post will discuss the IRS rule, which is primarily a finalization of proposals and guidances already made public, and the OPM multi-state plan rule.

Read the rest of this entry »

Dear Governor-Elect: Some Health Policy Counsel


November 18th, 2014

Congratulations on your election on November 3. It is a mandate for your vision and leadership.  Now, like the proverbial dog who has caught the meat truck — where to begin with this business of governing?

As you contemplate the work in front of you, I would like to offer some (unsolicited) advice about a possible state health policy agenda, borne from my own work and observing states across the country. The recommendations are non-ideological and substance-neutral.  You will look hard to find a reference to the Affordable Care Act (ACA) here. The challenges states face in health care are so large they defy simple solutions and require collaboration across our widening ideological divide; energy spent attacking the ACA is energy diverted from these challenges.

Read the rest of this entry »

Medicaid At 50: From Exclusion To Expansion To Universality


November 14th, 2014

Editor’s note: This post is part of a series of several posts stemming from presentations given at “The Law of Medicare and Medicaid at Fifty,” a conference held at Yale Law School on November 6 and 7.

For almost five decades, Medicaid has been a safety net with gaping holes. Medicaid has provided invaluable health care access for the “deserving poor”—the impoverished blind, disabled, children, pregnant women, and elderly—but they only comprise approximately 40 percent of the nation’s poor. The Patient Protection and Affordable Care Act (ACA), as part of its comprehensive insurance coverage architecture, rendered all Americans earning up to 138 percent of the federal poverty level (FPL) eligible for Medicaid. Through the effort to “provide everybody … some basic security when it comes to their health care,” the ACA adopted a universal approach to health care access. Universality is a fundamentally different philosophical approach in American health care, and an important progression away from the stigmatizing rhetoric of the “deserving poor.”

The Supreme Court nearly thwarted the possibility of universality by holding the Medicaid expansion unduly coercive and rendering expansion optional for the states. Ever since, states have been exercising that option, deciding whether to expand in a highly dynamic dialogue that has occurred both intrastate and extra-state with the Secretary of the Department of Health and Human Services (HHS). This dialogue has resulted in four waves of Medicaid expansion, each of which has exhibited greater boldness on the part of the states in their proposals to HHS, and greater flexibility on the part of HHS in accepting state ideas for expansion. On a spectrum of federalism, the waves move from cooperation to assertions of state sovereignty. But, Medicaid’s new universality provides an absolute backstop for HHS in these negotiations, a point at which federal policy should not accommodate the rent-seeking behavior of the states.

Read the rest of this entry »

Risk And Reform Of Long-Term Care


November 14th, 2014

Editor’s note: This post is part of a series of several posts stemming from presentations given at “The Law of Medicare and Medicaid at Fifty,” a conference held at Yale Law School on November 6 and 7.

The 50th Anniversary of Medicare and Medicaid offers an opportunity to reflect on how U.S. social policy has conceived of the problem of long-term care.

Social insurance programs aim to create greater security—typically financial security—for American families (See Note 1). Programs for long-term care, however, have had mixed results. The most recent attempt at reform, which Ted Kennedy ushered through as a part of the Patient Protection and Affordable Care Act (ACA), called the CLASS Act, was actuarially unsound and later repealed. Medicare and especially Medicaid, the two primary government programs to address long-term care needs, are criticized for failing to meet the needs of people with a disability or illness, who need long-term services or supports. These critiques are valid.

Even more troublesome, however, long-term care policy, especially in its most recent evolution toward home-based care, has intensified a second type of insecurity for Americans. This insecurity arises when someone becomes responsible for the long-term care of a loved one. In a longer forthcoming article, I argue that this insecurity—which I call “next-friend risk”—poses a serious threat to Americans and needs to be addressed. (I borrow the phrase next friend from a legal term for a person who in litigation represents someone with a disability who is otherwise unable to represent him or herself. Although not a legal guardian, the next friend protects the interests of an incompetent person.)

Read the rest of this entry »

Reforming Medicare: What Does The Public Want?


November 13th, 2014

Is Medicare adequately meeting the needs of seniors, or are there ways that its core attributes could be improved? Numerous elected officials, policymakers, and other thought leaders have offered perspectives on ways to change the program. Few efforts, however, have been directed at understanding how the public—given accurate information, a variety of options, and a valid structure for weighing the pros and cons—would change Medicare’s basic design.

The MedCHAT Project

Recently, the American Enterprise Institute and the Brookings Institution co-hosted a briefing on the results of a California project that did just that. The “MedCHAT” project, sponsored by the nonprofit, nonpartisan Center for Healthcare Decisions, asked 800 residents—the lay public, as well as health care professionals and community leaders—to consider Medicare’s current benefits and decide if those should be changed. Respondents represented the full spectrum of age, race, ethnicity, education, and income level.

Using an interactive, computer-based system, participants were asked to respond as “social decisionmakers;” they were tasked with making Medicare more responsive to the needs of current and future generations without imposing a greater cost burden on the country. The computer-based CHAT (“Choosing All Together”) program uses actuarial estimates to show the relative costs of health care benefits, allowing participants to make trade-offs with an understanding of the fiscal impact each benefit has on the program.

Read the rest of this entry »

Implementing Health Reform: New HHS 2015 Marketplace Enrollment Estimates


November 11th, 2014

On November 10, 2014, the HHS Assistant Secretary for Planning and Evaluation (ASPE) released an estimate of “How Many Individuals Might Have Marketplace Coverage After the 2015 Open Enrollment Period.”  ASPE estimates that 9.1 to 9.9 million will be enrolled, substantially lower than the 13 million enrollee estimate the Congressional Budget Office issued in the Spring of 2014.

Both the ASPE and CBO estimates see the marketplaces as eventually covering 24 to 25 million people.  But while CBO projected that the marketplaces would reach this number in 3 years, ASPE believes that a 4 to 5 year ramp-up period is more realistic based on the launch experience of other programs, like Medicaid and CHIP.

Examining the numbers.  The marketplaces enrolled 8.1 million individuals during the 2014 open enrollment period.  The ASPE brief states that 7.1 million were still enrolled as of October of 2014.  It is not clear whether or not this number includes 112,000 individuals that HHS recently announced have been dropped from the marketplaces because they failed adequately to document their immigration or citizenship status.  HHS has also announced that another 105,000 individuals will have their financial eligibility determined on data available to HHS (in most instances 2012 tax returns), because they failed to document the income levels they claimed on their applications.  These individuals will not lose coverage, but may receive smaller tax credits.

Read the rest of this entry »

Implementing Health Reform: Defining Group Health Plans And More


November 9th, 2014

A primary goal of the Affordable Care Act is to extend individual health insurance coverage through the exchanges and the premium tax credits to Americans who would otherwise be uninsured.  But most working-age Americans and their families remain insured through employer-sponsored group coverage. While seeking to expand individual coverage, therefore, the ACA also attempts to preserve group coverage.

Employers and those who advise employers have, however, sought to break down the barrier between group and individual coverage. That is, they have tried to figure out how employers can subsidize individual coverage for their employees rather than provide group coverage.  If this were possible, employers could assist their employees to secure coverage while avoiding the burden of operating a group health plan.  Employees might be able to simultaneously receive the benefits of employer contributions and of premium tax credits.  It might even be possible for employers to shunt off their high-cost employees with poor health status to the exchanges, where they would be charged community-rated premiums, while keeping healthy employees in a group plan, which would likely receive a favorable rate based on claims experience.

In earlier guidances, the Departments of Labor, Treasury, and Health and Human Services clarified that employer health care arrangements, such as health reimbursement accounts and employer payment plans, are group health plans subject to the group market reforms of the ACA, including the prohibition of annual limits or the requirement to cover certain preventive services.  Such arrangements must therefore be integrated with a group health plan that meets these requirements, therefore, to comply with the law.  They cannot be integrated with individual policies and comply with the law.

Read the rest of this entry »

Implementing Health Reform: Supreme Court Will Review Tax Credits In Federal Exchanges


November 7th, 2014

On November 7, 2014, the Supreme Court granted certiorari (review) in King v. Burwell, one of the cases involving the question of whether federally-facilitated marketplaces can grant premium tax credits.  The Fourth Circuit in King had upheld the Internal Revenue Service rule allowing FFMs to grant premium tax credits.  A panel of the District of Columbia Circuit had decided the same day that only state-operated exchanges could grant tax credits; however, that decision was vacated by the D.C. Circuit when it decided to rehear the case as a whole, so at the time the Supreme Court accepted certiorari, King was the only circuit court decision in effect, and that upholding the rule.

The challenge to the IRS rule is based on the wording of the provision of the ACA that authorizes premium tax credits, which refers to enrollment “in through an Exchange established by the State.”  The plaintiffs in King argue that this means that only state-operated exchanges can grant premium tax credits.

The government responds that this is an incorrect reading of the statute, which recognizes FFMs as the state-established exchange in states that elect not to establish a state exchange.  This is certainly the way that the members of Congress who wrote the legislation and the states that elected not to operate their own exchange understood the legislation.

Read the rest of this entry »

Tax Filing And The ACA: Helping Americans Meet The Challenge


November 7th, 2014

Tim Jost’s post of September 21, 2014 expressed concern about the problems that Americans who are uninsured or who have received or qualify for premium tax credits will face in filing their taxes for 2014.  Those who are not otherwise insured and who wish to claim an exemption from the shared responsibility penalty will have to file tax form 8965.  Those who received advance premium tax credits during 2014 will have to file a form 8962, as will those who did not receive advance premium tax credits but who wish to claim premium tax credits on their tax return.  Tax filers who fail to reconcile their tax credits for 2014 cannot claim tax credits for subsequent years.

Individuals who did not have coverage at the beginning of 2014, but purchased coverage at some point in the year through the marketplaces, may need to file both forms.  For example, victims of domestic violence or spousal abandonment were granted a special enrollment period part of the way through 2014 and will have to file an 8965 for the months they were uninsured before they enrolled and an 8962 for months after they enrolled.

This post offers suggestions as to how the Internal Revenue Service and Centers for Medicare and Medicaid Services, the two agencies that oversee the shared responsibility and premium tax credit programs, might mitigate the problems that tax filers may face in filing their taxes for 2014.

Read the rest of this entry »

The United States’ Misguided Self-Interest On Ebola


October 31st, 2014

The Ebola epidemic in West Africa is spiraling out of control. The international community allowed a manageable outbreak to mushroom into a health and humanitarian crisis. The World Health Organization (WHO) has been enfeebled and largely sidelined. Belatedly, the United States sent military troops into Liberia and spearheaded a United Nations Security Council resolution. Yet since isolated Ebola cases have appeared on our shores, the US has begun to look inward, at risk of falling into a trap that I will call “misguided self-interest.”

While the West African epidemic rages, the US delayed significant action until long after the unprecedented nature of the Ebola epidemic became clear, and even now the response is incommensurate with the massive need. Now we are transferring our gaze from the real crisis and headed on an insular journey.

I grant the premise that a country’s first responsibility is to protect its inhabitants. But calls for a travel ban from the region and newly announced state quarantine policies that would ensnare travelers from affected countries appear selfish. To put it in perspective, the US has experienced only a few domestically diagnosed cases, with an exceedingly low risk of an outbreak.

Read the rest of this entry »

North Carolina Dental Board v. FTC: A Bright Line On Whiter Teeth?


October 30th, 2014

On October 14, 2014, the United States Supreme Court heard oral arguments in North Carolina Board of Dental Examiners vs. Federal Trade Commission.  The case does not involve the Affordable Care Act, but it goes to the heart of the professional self-regulatory paradigm that has governed the U.S. health care system for more than a century.  The specific legal question under review is the standard for determining when a state professional licensing board’s activities are subject to scrutiny for anticompetitive effect under the federal antitrust laws.

Antitrust law applies to private anticompetitive conduct.  Congress did not intend to interfere with state regulation that limits or even eliminates competitions.  As long as states do so using public agencies and officials, they are on safe ground.  If a state empowers private parties to administer such regulation, however, it not only must “clearly articulate” its intent to diminish competition, but also must “actively supervise” the conduct of the private parties.  In previous cases, the Supreme Court developed and elaborated this two-part test, which is called the “state action doctrine.”

Read the rest of this entry »

Tax-Exempt Status For Nonprofit Hospitals Under The ACA: Where Are The Final Treasury/IRS Rules?


October 23rd, 2014

Months have now stretched into years, and there still remains no sign of final Treasury/IRS regulations interpreting the Affordable Care Act (ACA)’s provisions covering the expanded obligations of nonprofit hospitals that seek tax-exempt status under §501(c)(3) of the Internal Revenue Code.

The ACA amendments do not depend on formal agency policy to take effect. Nonetheless, Congress directed the Treasury Secretary to issue regulations and guidance necessary to carry out the reforms (26 U.S.C. §501(r)(7)). To this end, two important sets of proposed rules were issued: the first in June, 2012; and the second, in April 2013. While an informative IRS website lists various proposed rules and guidelines important to nonprofit hospitals, final rules seem to have performed a disappearing act.

Apparently recognizing the problems created by its delays, the agency has gone so far as to issue a special Notice letting nonprofit hospitals (and presumably the public) know that they can rely on its proposed rules. But this assurance overlooks the fact that the proposed rules themselves contained crucial areas in which final agency policy has not yet been adopted.

Read the rest of this entry »

Click here to email us a new post.