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Weekly Health Policy Update: CBO Released Revised Estimates, CHGME Funding Got a Boost, and CMS Announced a New Co-Op

Weekly Health Care Wrap-Up.

CBO Releases Revised Estimates Following Supreme Court Ruling

The Congressional Budget Office (CBO) released revised cost and coverage estimates of the Affordable Care Act (ACA) this week in light of the Supreme Court’s ruling. As expected, the CBO predicts the health law will cover approximately 3 million fewer people than before the Court made the Medicaid expansion optional for states. Specifically, the CBO finds, “In 2022, for example, Medicaid and the Children’s Health Insurance Program are expected to cover about 6 million fewer people than previously estimated, about 3 million more people will be enrolled in exchanges, and about 3 million more people will be uninsured.” In total, the law’s cost was also reduced by approximately $84 billion by the Court’s decision. Read the CBO’s findings here and reactions from the White House and American Action Forum.

House Appropriations Bill Includes Boost for CHGME Funding

In the midst of legislation that cut funding to several HHS programs and eliminated the Agency for Healthcare Research and Quality (AHRQ) entirely, House appropriators tagged $275 million for the Children’s Graduate Medical Education (CHGME) program, $10 million above the Senate level. It is still unclear when or if the full House Appropriations Committee will consider the legislation. Additional information about efforts to fund and reauthorize CHGME is available here.

CMS Announces Latest Co-Op

The Centers for Medicare and Medicaid Services (CMS) announced today that it will loan $69 million to Colorado Health Insurance Cooperative, Inc. to initiate a private non-profit, consumer-governed health insurance company. This announcement marks the latest Consumer Owned and Operated Plan (Co-Op) funded under the ACA. A complete list of Co-Ops can be found here.

From the States

For full coverage of state exchange activities, check out this week’s State of the States: Health Insurance Exchange Developments here.

On Monday, the Republican Governors Public Policy Committee (RGPPC) released a letter seeking specific answers to the 30 questions from their July 10letter to HHS following the Supreme Court ruling. The questions revolve mostly around the implementation of exchanges and the Medicaid expansion. CMS Acting Administrator Marilyn Tavenner responded to the original letter, but did not address many of the questions posed by the RGPPC. In the latest letter, Governor McDonnell urges the Obama administration to consider a report released last summer by the RGPPC, A New Medicaid: A Flexible, Innovative and Accountable Future.


The Patient Centered Outcomes Research Institute released a draft Methodology Report and will accept public comments until September 14. The report outlines the 60 standards for research that the agency will fund.

A new report from the Government Accountability Office examines the IRS “affordability test” used to determine whether or not employer coverage is affordable under the ACA.

Deloitte is out with a new study showing that one in 10 employers will discontinue health insurance for employees under the ACA. Read the story here.

AHIP examines Health Savings Accounts (HSAs) in a new research report, finding that enrollment increased to 13.5 million people in January 2012, with large-group coverage being the fastest growing market. Read the report here.

The New England Journal of Medicine finds that expanded adult Medicaid coverage has lowered death rates in the three states studied, New York, Maine, and Arizona, as compared to three that did not expand. Find more information here.

The Commonwealth Fund announced that David Blumenthal will succeed Karen Davis as the group’s new president, effective January 1.  Blumenthal previously served as National Coordinator for Health Information Technology under President Obama.

According to a new GAO report, 16 percent of eligible hospitals and 9 percent of eligible professionals claimed electronic health record incentive payments in 2011. Read the report here.

Health Insurance Exchanges: State of the States update.

This week was relatively slow for exchange watchers as states continue to evaluate whether or not they will establish exchanges and/or expand Medicaid.

Of note this week, Idaho Governor Butch Otter appointed two working groups under the Idaho Health Care Council to evaluate questions related to the Affordable Care Act (ACA). The 26 public and private stakeholders will consider both the Medicaid expansion and the exchange – with Idaho Department of Health and Welfare Director Dick Armstrong leading the Medicaid workgroup and Idaho Department of Insurance Director Bill Deal leading the exchange team. Recommendations are due to the Governor this fall.

In Indiana, Governor Mitch Daniels indicated he would consult his potential successors before making a decision on an exchange, saying, “I don’t consider it right for me or my administration to make such a decision that the next administration then has to implement. So I’m going to have to find some way to get input from the next governor.” Governor Daniels’s second term as governor comes to a close this year.  Current candidates for the top spot in the Hoosier state include Republican Mike Pence, Democrat John Gregg and Libertarian Rupert Boneham.

While Nebraska is still undecided on the exchange front, with little exchange action in the state to date, the Department of Insurance this week did post ananalysis by Mercer examining potential essential health benefits options.  For a state by state recap of the essential health benefits selection process, check out the chart on the statereforum blog.

Finally, on the private exchange front, Arthur J. Gallagher & Co. announced this week that its benefit consulting division, Gallagher Benefit Services, Inc. (GBS), is partnering with Liazon to offer the Bright Choices Exchange to customers. In his statement, GBS President James Durkin offered his thoughts on the private exchange opportunity, “There will be many different private exchange models and organizations will be interested in them for different reasons. Some organizations may be focused on simplifying a complex benefits administration process, while for others this may be a key piece in helping execute their Total Rewards strategy.” Arthur J. Gallagher & Co. is an international insurance brokerage and risk management services firm with operations in 17 countries.

Weekly Health Policy Update: CBO Released Revised Estimates, CHGME Funding Got a Boost, and CMS Announced a New Co-Op

“The End of the Beginning”: Canada-U.S. Regulatory Cooperation On The Move

Earlier today, two members of the Board of the Canadian American Business Council along with officials from the federal governments of Canada and the U.S. addressed a Wilson Center Canada Institute audience on the progress to date of the bilateral Regulatory Cooperation Council (RCC) process.

Michael Fitzpatrick of GE and Kelly Johnston of Campbell’s Soup provided especially good insights into what has been accomplished to date in the Canada-U.S. RCC process and more important – next steps to undertake if the initiative is to live up to the goals set out by Prime Minister Harper and President Obama when they announced it last year.

The discussion began with an update from Robert Carberry, representing the Treasury Board in Canada and Alex Hunt from the White House Office of Information and Regulatory Affairs (OIRA). Carberry, with the forthrightness for which he has become known and appreciated, talked about the acute need for industry attention in each of the working groups that have been established as part of the RCC process. Hunt, for his part, outlined the latest Executive Order (13609), which promotes the notion of international coordination in the domestic regulatory process. Hunt rightly noted that domestic regulation now takes place on a global playing field and it is important to address unnecessary duplication and regulatory burdens without compensating health and safety. Hunt quipped that we are now “at the end of the beginning” of the Canada-U.S. RCC process, and the real work is about to begin.

In the separate panel of industry representatives that followed and which was one of the most compelling presentations I have ever seen, Michael Fitzpatrick of GE provided three constructive comments about the RCC and how to make the effort more effective and ensure it achieves its promise.

First, Fitzpatrick talked about the importance of communication, making the point that simply posting information to a website in today’s crowded information age is not a sufficient method of communicating progress on this important bilateral initiative.  In fact, if your communication strategy is simply to post things online, that is like not communicating at all, according to Fitzpatrick. What really needs to be done is to communicate through affirmative messages, whether through press releases or trade associations, he said.

Second, Fitzpatrick reminded the group that it is key for the principals involved to keep pressure on their working group lead officials to proactively engage with stakeholders and to provide meaningful opportunities for substantive input on the working group work product, as it develops. In fact, this kind of affirmative outreach is of a prime responsibility, according to Fitzpatrick.

Finally, Fitzpatrick highlighted the importance for the governments to develop a process for incorporating new ideas into the RCC action plan. It is unclear to everyone how the governments mean to move beyond the 29 action items currently before them and to consider additional projects. Without a sense of what is next, industry is unlikely to put much effort into providing regulators with new ideas for progress.

Kelly Johnston of Campbell’s Soup wrapped up the session by calling on the private sector to focus on harmonization at least a much as the governments are. He showed a slide of the Campbell’s facility outside of Toronto. In the slide there are two palates: one with the Canadian flag and one with the U.S. flag. Given the subject of the panel discussion today, one might assume that each palate is meant to serve a different regulator. In truth, it is the retailers that Campbell’s serves that have slightly different preferences for the kind of palates they want suppliers to use.

Bottom line message: the burdens don’t always come from government (although they mostly do).

“The End of the Beginning”: Canada-U.S. Regulatory Cooperation On The Move

Weekly Health Policy Update: House Subcommittee Approved FY13 Spending Legislation, CMS Announced New ACOs, and State Exchange Developments Continue

Weekly Health Care Wrap-Up.

House Subcommittee Approves Labor-HHS Appropriations Bill

The House Appropriations Subcommittee on Labor, Health and Human Services and Education approved FY13 spending legislation this week on a largely party line vote of 8-6. Representative Jeff Flake (R-AZ) joined Democrats in opposing the legislation, citing that the bill did not do enough to rein in spending. Of note, the bill cuts $1.3 billion from HHS and eliminates the Agency for Healthcare Research and Quality (AHRQ) entirely. More on the Subcommittee action can be found here.

Stage 2 Meaningful Use Rule Arrives at OMB

On Monday, the Centers for Medicare and Medicaid Services (CMS) sent the Stage 2 Meaningful Use rule to the Office of Management and Budget (OMB) for review. The proposed rule was first published on March 7 and public comments were accepted until May 7. Several large provider organizations expressed concern with the rule during the comment period, asking for implementation delays and additional simplification. More information is available here.

CMS Announces New Advanced Payment ACOs

CMS this week announced 15 new Advanced Payment Accountable Care Organizations (ACOs). The Advanced Payment Model is an initiative designed for small physician practices and rural providers who need additional help financing the upfront investment associated with becoming an ACO. Over time, advanced payments will be recouped by CMS through shared savings.  In April, CMS announced five ACOs had entered into agreements to participate in the Advance Payment ACO Model. The latest announcement brings the number of ACOs receiving advanced payments to 20. Additional information can be found here.

Innovation Center Announces State Innovation Model Initiative

On Thursday, the Center for Medicare and Medicaid Innovation announced that it will provide up to $275 million for states to create and test new payment and care delivery models for Medicare, Medicaid and CHIP beneficiaries.  States will have the opportunity to access funds for implementation of a multi-payer payment reform model or for technical assistance to support reform planning.  States must submit applications by September 17 to be considered for funding.  CMS Acting Administrator Marilyn Tavenner remarked that the awards are an “incentive for states to […] accelerate the work that many are already doing to improve health care and lower costs.”  The announcement comes on the heels of the Innovation Challenge, which awarded close to $1 billion in funding to test new delivery and care models across the county.  More information can be found here.

From the States

For full coverage of state exchange activities, check out this week’s State of the States: Health Insurance Exchange Developments here.

Kentucky. Governor Steve Beshear (D-KY) issued an Executive Orderestablishing the Kentucky Health Benefit Exchange, a move expected by exchange watchers. Since May, Governor Beshear hinted that he would establish an exchange by Executive Order if the Supreme Court upheld the ACA. The exchange will be housed in the Cabinet for Health and Family Services and have an 11-member advisory panel.

Minnesota.  The state Health Department released a new report analyzing their health care spending in the year 2010.  The report finds that while spending reached $37.7 billion, 13.9 percent of the state’s economy, spending grew only 2.2 percent from the previous year.  This is the lowest rate of growth on record since 1997; however, spending is still expected to more than double over the next decade.


In a letter to HHS Secretary Kathleen Sebelius, 28 House Democrats expressed concern with the agency’s current approach to drug benefits included as part of the essential health benefits package.  In particular, the letter suggests that HHS replicate the Medicare Part D “all or substantially all” policy in its essential health benefits plan.

The Center for Studying Health System Change released a  brief examining the trend by small businesses to self-insure. The report finds that an increase in self-insurance among small employers could pose challenges for policymakers, particularly for those attempting to implement small business exchanges. Read the brief here.

CMS has updated its websites for both Hospital Compare and Nursing Home Compare to improve ease of use and comply with changes included as part of the Affordable Care Act.

Health Insurance Exchanges: State of the States update.

It was a busy week for exchange watchers as one state created an exchange by Executive Order, while another formally opted out of creating a state-based exchange. Here’s the rundown.

On Tuesday, Governor Steve Beshear (D-KY) issued an Executive Orderestablishing the Kentucky Health Benefit Exchange. The move was expected by exchange watchers because Governor Beshear had hinted for months that he would create an exchange by Executive Order if the Supreme Court upheld the ACA. The exchange will be housed in the Cabinet for Health and Family Services and have an 11-member advisory panel.

Also on Tuesday, Governor Sean Parnell (R) announced that Alaska will not create a state-based exchange because of cost concerns. A report by Public Consulting Group for the state estimated that a state-based exchange would cost between $10-70 million to create. As a result of anticipated costs and concerns over unknown final design specifications, the report recommended that Alaska pursue a state-federal partnership with the goal of transitioning to a state-based exchange in 2016.

But Alaska is not the only state this week to begin examining a state-federal partnership. Michal Gelder, a senior health care policy advisor to Governor Pat Quinn (D-IL), told reporters “At this point in time, in the situation we’re in, a state-federal partnership is the best way of assuring access to an exchange.” However, according to his comments, even if Illinois ends up formally pursuing a state-federal partnership, it will likely continue planning for a state-based exchange. According to Gelder, the state will issue an RFP the exchange’s IT system in the next few days. Stay tuned.

In Michigan, after previously signaling interest in passing exchange-enabling legislation, House Republicans are now delaying progress toward an exchange in the state. Last month, after the Supreme Court ruling, House Speaker Jase Bolger (R) expressed optimism that the House could pass exchange legislation.  However, it is now no longer clear that the House will pass legislation anytime soon with some legislators advocating for the House to wait until after the November elections. While the House is scheduled to hold its first hearing in 2012 on exchanges next week, the lack of progress leaves Michigan’s exchange planning hamstrung since the state cannot spend the $9.8 million in grants it has received without authority from either the legislature or the governor. Governor Rick Snyder (R) is believed to be considering using an Executive Order to create an exchange, but action is not expected in the near term. On Thursday, he told reporters that he was not “going to put down a gauntlet like that.”

It was also a busy week in the IT front. First, Minnesota announced it had awarded a $41 million contract to Maximus as the prime contractor to design and maintain its state-run health insurance exchange. Maximus’ team includes IBM, EngagePoint and Connecture.

We also learned that earlier this month Nevada awarded Xerox State Healthcare a $71.9 million contract to be its “Business Operations Services” vendor. Under the contract, Xerox will host and design the IT system, handle back-office functions and run the call center. The system built by Xerox will interact with an eligibility and enrollment system developed by Deloitte.

It’s also worth noting that last week Florida Health Choices awarded Xerox a nine-year $68 million IT contract to build and run a private small business exchange created by the Florida Legislature in 2008. Under the contract, Xerox and its partner, CHOICE Administrators Exchange Solutions, will build the IT system, design a web portal and online plan selection tool, build an eligibility and enrollment system and operate a call center. The Florida Health Choices marketplace is not designed to meet the requirements of an ACA exchange, such as selling only Qualified Health Plans, providing access to federal subsidies, or sending all information through a federal data hub.

Additional IT awards are still pending throughout the country. Hawaii released an RFP for its IT backbone, seeking a vendor to design and maintain a system for both the individual exchange and the SHOP. The RFP also asks vendors to operate the call center, manage premium billing and collection and handle various back office functions.  The RFP does not include developing an eligibility and enrollment system. Proposals are due August 21 with the state aiming to award the contract on October 1.

Finally, it’s worth reminding ourselves of the role of state legislators in ACA implementation, particularly as states consider whether to expand Medicaid or stand up an exchange.  Just after Governor Steve Beshear (D-KY) used an Executive Order to create a health insurance exchange, a legislative committee voted on party lines to reject a lease to house the Exchange’s staff. The blow to the Kentucky Health Benefit Exchange may be short-lived, however, since Kentucky’s secretary of finance can overrule the committee and approve the lease.

Weekly Health Policy Update: House Subcommittee Approved FY13 Spending Legislation, CMS Announced New ACOs, and State Exchange Developments Continue

PNWER: Saskatoon, Saskatchewan Plays Host To Important Bi-National Forum

This week, I’m excited to be attending the 22nd Annual Pacific NorthWest Economic Region (PNWER) Summit in Saskatoon, Saskatchewan, one of Canada fastest growing cities. (I was honored to receive PNWER’s “Hot Potato Award” this year for helping to increase collaboration between U.S. and Canada organizations and stakeholders.)

Founded in 1991, PNWER is an important U.S.-Canada forum that fosters collaboration and dialogue between public and private sector leaders at the state and provincial level (Oregon, Washington, Idaho, Montana, Alaska, Alberta, Calgary, British Columbia, Northwest Territories, the Yukon) as well as at the national level in Washington, DC and Ottawa.

This year’s Summit brings together “over 600 key business leaders, legislators, and government leaders from PNWER’s ten states, provinces, and territories to address the major policy issues impacting the region.”

As I wrote in this op-ed from the Saskatoon Star Phoenix, the cross-border regional  relationships between governors and premiers and the legislators of our states and provinces constitute the hidden wiring of the Canada-U.S. relationship. PNWER has been especially successful because they put the emphasis on results and, importantly, keep track and do follow-up through their permanent, Seattle-based Secretariat.

PNWER: Saskatoon, Saskatchewan Plays Host To Important Bi-National Forum

Weekly Health Policy Update: CMS Announced New ACOs, House Voted to Repeal ACA, and More State and Federal Exchange Plans

Weekly Health Care Wrap-Up.

CMS Announces Next Round of ACOs

Earlier this week, the Centers for Medicare and Medicaid Services (CMS) announced 89 new Accountable Care Organizations (ACOs). The new ACOs will serve 1.2 million people in 40 states and Washington, DC. The latest announcement brings the total number of organizations participating in the Medicare Shared Savings Program to 154, including the 32 ACOs participating in the Pioneer ACO program. As of July 1, more than 2.4 million Medicare beneficiaries are receiving care from providers participating in Medicare shared savings programs.

President Obama Signs User Fee Legislation

On Monday, President Obama signed the FDA Safety and Innovation Act into law, reauthorizing the user fee program at the Food and Drug Administration for fiscal years 2013-2017. The bill received bipartisan support as it moved through Congress and is likely the last major health-related legislation that will be signed into law before the 2012 election.

House Votes to Repeal ACA

On Wednesday, the House voted to repeal the Affordable Care Act (ACA), largely along party lines. Five Democrats joined Republicans in supporting repeal. Similar action is not expected in the Senate.

From the States

For full coverage of state exchange activities, check out this week’s State of the States: Health Insurance Exchange Developments here.

Following the Supreme Court’s ruling on the Affordable Care Act, states are focused on key decisions around Medicaid and exchanges. For a complete recap of exchange action this week, check out State of the States: Health Insurance Exchanges. Meanwhile, the question of whether states will expand Medicaid continues to heat up.

On the heels of the Supreme Court’s decision, the Republican Governors Public Policy Committee sent a letter to President Obama posing 30 questions about implementation of the ACA, including key questions surrounding the Medicaid expansion. Today, CMS Acting Administrator Marilyn Tavenner responded with a letter of her own.  While Tavenner did not address all of the questions posed in the letter from Republican governors, she did clarify that there is no deadline for states to tell CMS whether they plan to expand Medicaid. She went on to say, “A state can receive extra funding for Medicaid IT costs and exchange implementation costs even if it has not yet decided whether to expand Medicaid eligibility or to run its own exchange.” Tavenner’s letter can be found here.


The Robert Wood Johnson Foundation has released a report evaluating issues and outcomes surrounding hospital competition. Read the research results here. The Foundation is also out this week with a brief examining the role exchanges could play in care improvement initiatives. The brief can be found here .

In a letter to Congressman Ed Markey (D-MA), HHS examines the impact that budget sequestration could have on the Department’s programs. The letter says that under sequestration the department will face a 7.8 percent budget reduction, including cuts to NIH, Head Start and efforts to reduce health care fraud and abuse.  Read the letter here.

The Altarum Institute released a new brief comparing recent health expenditures to previous years. In particular, the study finds that health spending is 18 percent of the GDP as of April 2012, nearly 2 percent higher than it was at the start of the current recession. Read the brief here.

Health Insurance Exchanges: State of the States update.

This was an interesting week for exchange activity, with more states announcing their exchange plans and RFP activity at both the state and federal levels.

First, we’ve heard that HHS received Establishment Grant applications from nine states for its June 29 deadline. HHS has yet to release the names of state applicants, but it’s known that California, Maryland, New York, Nevada and Vermont submitted applications.

Also this week, HHS published letters from twelve governors stating their intention to create state-based health insurance exchanges. The letters, which are part of a two-step “Blueprint” that all states must submit to HHS by November 16, briefly summarize the intent of those governors to move forward with creating an exchange. A full list of states, and the submitted letters, can be found on HHS’swebsite. Additionally, while it is not listed on HHS’s website, Kentucky Governor Steve Beshear (D) sent a letter to HHS on Tuesday affirming his intention to have Kentucky create an exchange.

While some governors have been expressing their intention to create an exchange, others have been declaring their opposition to creating a state-based exchange. At last count, Florida, Louisiana, Maine, New Hampshire, South Carolina and Texas have all publicly announced they will not create an exchange. Expect this list to grow in coming weeks as additional governors announce their decision.

On the procurement front, this was a busy week for contractors interested in responding to Kentucky’s RFP for an exchange IT system — July 12 was the last day to reply. The RFP does not give any hints as to when the state expects to award the contract.

Also, reports this week indicate there was a report this week that CMS released an RFP to preselected firms for education and outreach for the federally facilitated exchange. The selected firm will be responsible for developing plans to reach consumers, Medicaid eligibles and small businesses. Initial reports indicate that the contract’s value and scope is in flux since CMS is uncertain “how many states [it] may be responsible for outreach and education as part of the FEE.” The RFP goes on to state that all plans must be scalable to implement across a few states or to all 50 states. The deadline for responding to the RFP is July 20.

Finally, if it’s not already on your calendar, consider tuning in to a webinar by the Arkansas Insurance Department’s Health Benefits Exchange Partnership Division on July 18. The division will hold a webinar to update participants on Arkansas’s planning for the creation of a State Partnership Exchange. More information can be found here.

Weekly Health Policy Update: CMS Announced New ACOs, House Voted to Repeal ACA, and More State and Federal Exchange Plans

Weekly Health Policy Update: House to Vote on ACA Repeal and States Consider Medicaid Exchange Options

Weekly Health Care Wrap-Up.

Washington, DC Recovers from Supreme Court Flurry

It was a slow week in Washington, DC, with the House and Senate on July 4th recess. For those unlucky enough to be stuck inside the Beltway (in record heat!), the conversation mostly focused on the fallout from the Supreme Court’s decision. Early in the week, all eyes turned to a report by CBS’s Jan Crawford that Chief Justice John Roberts – the deciding vote on the Affordable Care Act (ACA) case – changed his vote mid-way through deliberation. While speculation will likely continue to swirl over the account – and the potential sources of the leak – for some time, the health care industry, states and the Obama administration will turn to the implications of the Court’s decision and the upcoming 2012 elections. In particular, states will be faced with many key decisions over the coming months, including whether to pursue exchanges – and if so, what model – and whether to expand Medicaid now that the expansion is, in effect, optional under the ACA. Read this week’s State of the States: Health Insurance Exchanges for more details on state developments.

Looking ahead in Congress, the House will return next week just in time to vote on repeal of the ACA. While repeal is expected to pass in the House, there is no expectation that repeal legislation will gain traction in the Democrat-controlled Senate. Action in Congress is expected to slow in the coming months, as the August recess approaches and Members and staff enter into full campaign mode.

From the States

For full coverage of state exchange activities, check out this week’s State of the States: Health Insurance Exchange Developments here.

California. The state’s Assembly Committee on Health Care considered and approved several pieces of health-related legislation this week. Most notably, the Committee passed SB 951, legislation to establish California’s essential health benefits benchmark under the ACA. SB951 was approved by the full California Senate in early May. Additional information can be found here.

New Hampshire. The legislature voted last week to override Governor John Lynch’s veto of medical malpractice “early offer” legislation. The bill allows patients to accept an “early offer” to settle medical malpractice claims, rather than pursuing litigation. Additional information about the legislation can be found here.


Gallup released a new poll this week stating that fewer people between the ages of 26 and 64 have health insurance through their employer than in previous years.  In contrast, they record increases in employer-based insurance in the age group 18-25 as well as overall greater coverage for those under 26 as a result of the ACA.  Read their findings here.

The Kaiser Family Foundation released a new poll that says 56 percent of Americans would like lawmakers who are opposed to the ACA to stop fighting the bill and focus their efforts on other issues.  Find the entire story here.

A new Rasmussen poll finds that public opinion of the Supreme Court took a hit following last week’s ruling.  Specifically, the poll finds that approval is down from 36 to 33 percent, while negative opinions are up from 17 to 28 percent.  More information on the poll can be found here.

Health Insurance Exchanges: State of the States update.

This week in statehouses and capitals nationwide, governors and legislators continued mulling whether to pursue exchanges and whether to expand their state’s Medicaid program. We’ve been busy tracking the responses of Governors as they begin to evaluate their options for exchanges. Let’s run through this week’s activity.

First, early this week, exchange watchers received news that work on the Federal Data Services Hub could be making progress. The federal data hub is the system that will verify an applicant’s income, immigration status, and enrollment status in Medicaid or CHIP, during the exchange eligibility process. According to reports, the data hub has begun tests with some states, specifically Massachusetts and Maryland.

Moving on to state activity, Governor Chris Christie (R-NJ) said this week that he is considering letting the federal government set up an exchange in New Jersey if it is the most cost-effective option. Earlier this year, Governor Christie vetoed exchange enabling legislation that was passed and sent to him by the New Jersey legislature.

In Ohio, there are reports that the state is considering a Federal-State Partnership exchange, but no decisions have been made. In fact, it could be a while before we hear anything. Governor Kasich (R-OH) told reporters Monday that Ohio will “probably” let the federal government run Ohio’s health insurance exchange. However, he also said he would not provide a firm deadline of when he will decide on the future of Ohio’s exchange.

Governor Mary Fallin (R-OK) and Governor Bob McDonnell (R-VA) both announced this week that they are not planning to call special sessions for legislators to address creating a health insurance exchange. Even as both governors strike a similar tone by refusing to call special sessions, Oklahoma and Virginia have taken different paths when it comes to exchange planning. In Oklahoma, exchange planning came to a virtual standstill after the state returned a $54.4 million Early Innovator grant. In Virginia, although there is no official support for a state exchange, early planning activity has occurred. Virginia is also procuring a Medicaid eligibility and enrollment IT system that includes an option to expand the contract to include health insurance exchange technology.

To the west, there are rumors that New Mexico is modeling its health insurance exchange after Utah. According to state Senator Dede Feldman (D), Governor Martinez’s administration “has been very keen on the Utah model for the exchange for some time now.” As you will recall, Utah-based Leavitt Partners was hired in mid-May to advise the state on exchange planning. But New Mexico is not the only state to reach out to Utah. As Alaska evaluates its options for potentially establishing an exchange, it appears the state has also been in touch with Utah for guidance.

Finally, add Vermont to the list of states that applied for exchange grants on June 29th. Last week, Vermont submitted an application to HHS for a $104.4 million Level II grant.

Weekly Health Policy Update: House to Vote on ACA Repeal and States Consider Medicaid Exchange Options

Promoting U.S.-Canada Trade: Georgia Takes the Lead

This week, the Governor of Georgia is promoting the state to its best customer and supplier –  Canada.

Rollin Downs from our Canada-U.S. team is helping the Governor’s team with aspects of the trade mission, which is still underway, starting in Montreal and heading west each day, until finally reaching Alberta’s oil patch. At a lunch in Toronto hosted by former U.S. Ambassador to Canada Gordon Giffin together with the Canadian American Business Council, a group of business leaders had a unique opportunity for dialogue with Georgia Governor Nathan Deal. The Governor’s deep knowledge of business issues impressed the gathering. He talked about the over 260 Canadian facilities in Georgia as well as the over 780 Georgia businesses operating in Canada.

Governor Deal’s tour de force included a message about Georgia’s attributes, including its unmatched logistics, with Atlanta having the busiest airport in the world. Georgia is also a two-day truck haul to 80 percent of U.S. markets. The fastest growing port in the U.S. is in – where else? – Savannah, Georgia. In addition, Georgia is only one of eight states in the U.S. with a Triple A bond rating. And to top it all off , the statistics on Georgia’s workforce are truly staggering: Each year, the state increases the number of college and technical school graduates by about 80,000.

As Ambassador Giffin pointed out, this is a particularly fitting week for a southern governor to promote ties with Canada. This week, the U.S. and Canada celebrated the end of the War of 1812, as well as Canada’s birthday on July 1st and the U.S.’s birthday on July 4.

In the last 200 years of peace, our two great countries, led by leaders from places like Georgia are setting the model for prosperity and cooperation.

Promoting U.S.-Canada Trade: Georgia Takes the Lead

Weekly Health Policy Update: Supreme Court Ruling, FDA User Fee Bill, and Exchange Developments

Weekly Health Care Wrap-Up.

Finally! Supreme Court Rules on the Affordable Care Act

On Thursday, the Supreme Court voted 5-4 that the individual mandate included in the Affordable Care Act (ACA) is indeed constitutional. Chief Justice John Roberts joined Justices Sotomayor, Kagan, Ginsburg and Breyer in the majority. Interestingly, the Court ruled that the individual mandate is a valid exercise of Congress’s taxing power, but not a valid exercise of Congress’s Commerce Clause power.

In another one of the day’s interesting twists, the Supreme Court found that Congress had overstepped its authority, “by threatening States with the loss of their existing Medicaid funding if they decline to comply with the expansion.” While the Court found this part of the law unconstitutional, the Court also ruled that the issue could be remedied by removing the risk of losing current Medicaid funding for states who choose not to expand the program. This ruling, in effect, made the Medicaid expansion optional for states. Interestingly, this was a landslide by Supreme Court standards – 7 to 2. It is still unclear what impact this decision could hold for other federal government programs going forward.

Following the ruling, MLA attorneys and advisors offered a webinar to dissect the Court’s ruling and begin to consider the impact of the decision. The webinar, featuring Partner Bruce Brown, Senior Managing Director Cindy Gillespie, Partner Ann Murray, Partner Phil Seckman, and Senior Strategic Advisor and Independent Consultant Ipsita Smolinski can be found here. The Court’s full opinion can be found here.

FDA User Fee Bill Passes in the Senate

On Tuesday, the Senate voted 92-4 in favor of the FDA user fee bill, sending it to President Obama for his signature. The bill enjoyed bipartisan support throughout the legislative process. With the summer recess rapidly approaching and campaign season heating up, the user fee legislation could be one of Congress’s last major bipartisan actions before the 2012 elections. Additional information about the vote can be found here.

From the States

For full coverage of state exchange activities, check out this week’s State of the States: Health Insurance Exchange Developments here.

California. The state this week officially awarded a $359 million IT contract to Accenture to build and maintain the IT infrastructure for the exchange. Accenture is planning to use health insurance exchange software from Getinsured as well CGI and Oracle as subcontractors. Additional information can be found here.

Kansas. This week Kansas announced that it will award contracts to three companies as part of an effort to move hundreds of thousands of the state’s Medicaid beneficiaries to managed care. Contracts were awarded to Amerigroup Kansas Inc., Sunflower State Health Plan and United Healthcare of the Midwest. Additional information can be found here .


The US Preventive Services Task Force (USPSTF) released new guidelines on screening for obesity, determining that doctors should suggest behavioral and lifestyle changes to obese patients.

The US Bureau of Labor Statistics is out with a new report detailing the changes in health benefits in state and local governments from 1998 to 2011.

The Robert Wood Johnson Foundation is out with a new paper detailing potential churn under the ACA.

The Kaiser Family Foundation released new data this week on state small group and individual health insurance markets, new developments in exchanges, and discounts in Medicare Part D.  Find more information here.

Health Insurance Exchanges: State of the States update.

This Week in the States: With the ACA emerging relatively unscathed in the Supreme Court’s ruling, exchange planners have a lot of work to do if they hope to be ready by 2014. In yesterday’s ruling, the Court upheld the individual mandate by a 5-4 decision under Congress’s taxing authority. However, the Court ruled 7-2 that the federal government could not force states to expand their Medicaid programs under threat of losing all federal Medicaid funding for non-compliance. This decision, in effect, makes the Medicaid expansion optional for states. Expect states to weigh this option carefully in the next few weeks.

Thursday’s ruling invited a mixture of praise and criticism from our nation’s governors and a handful of governors who used the Court’s ruling to spur progress on exchanges in their states. In Illinois, Governor Pat Quinn (D) wasted no time praising the Court’s decision and urging the legislature to enact exchange legislation. The governor was silent about whether he would use an Executive Order if the legislature did not act. He also admitted that Illinois was unlikely to submit a “blueprint” for a state-based exchange by HHS’s November 16 deadline.

Along similar lines, the Governor of Michigan, Rick Snyder (R), said that he wants to work quickly with legislators to create an exchange in order to avoid a federally facilitated exchange in his state. Governor Snyder might get his wish. The Republican House Speaker, Jase Bolger, has agreed to work with Synder’s administration to create an exchange, saying, “having the state establish a health care exchange is not something we wish to do, but we cannot stand idly by and hand over our citizens’ health care to an overreaching federal bureaucracy.” Yet, some state House GOP members have suggested that they might choose to wait until after the November election to move forward. Exchange legislation also could find supporters in the GOP-dominated Senate, which passed exchange legislation in 2011.

After Thursday’s ruling, one governor said he would use an Executive Order to create an exchange in the near future. Governor Steve Beshear (KY-D) told reporters he would issue an Executive Order “soon” to create an exchange. Kentucky has received nearly $58 million in HHS grants for exchange planning and development to date.

Additionally, it’s worth noting that on Tuesday, New Mexico announced that it would move forward with the creation of an exchange under the direction of Governor Susana Martinez (R). The New Mexico Human Services Department also announced the creation of a twelve-member task force to assist the state with its exchange planning. New Mexico’s exchange progress has been mixed over the past two years, with the state legislature passing legislation in 2011 only to have it vetoed by Governor Martinez, who at the time was hesitant to move forward with an exchange until she had additional information on how it would work and how much it would cost. In 2012, the state’s progress has been equally mixed. The state issued an RFP for an IT system in early 2012 only to suspend the procurement in March. However, exchange planning appears to be ramping up once again following a decision to hire Leavitt Partners in May.

Overall, the next weeks should bring clarification regarding which states will attempt to establish state-based exchanges, and which will have a federally controlled exchange, either in the form of a partnership exchange or a federally facilitated exchange. HHS has told states that they must apply for one of these three options by November 16 of this year, a week after the elections. With the Supreme Court affirming that implementation of the ACA will continue, some states that were previously waiting for the constitutionality of the law to be resolved may now be ready to move forward with creating exchanges. Others are likely to either wait until after the election to make final decisions or follow the lead set by Louisiana Governor Bobby Jindal (R) who stated today, “We’re not going to start implementing Obamacare.”

The question is how many states, even among those who apply to establish state-based exchanges, will be ready to run their own exchange in 2014? Many consultants and groups have offered their own divergent views. According to recent National Association of Insurance Commissioners projections, 26 states will be ready to deploy state-based exchanges under HHS’s deadlines. But other experts paint a much different picture. Joel Ario, a former HHS leader who worked on exchanges, has said, “there are 15 to 20 states that have a chance of achieving certification” but “less than half of that number have a good chance.” MLA Senior Managing Director Cindy Gillespie has said that as many as 40 states could have some form of a federally facilitated or partnership exchange in 2014. Stay tuned.

Following the ruling, many eyes will turn to those states moving forward with additional grant applications. Just this week, the California Health Benefit Exchange applied for a $196 million Level One grant. Also yesterday, Nevada’s Silver State Health Insurance Exchange applied for a $50 million Level Two grant. Maryland is also rumored to be pursuing a Level Two grant application, with the Board recently voting on whether or not to move forward to the application process during this funding period. And there could be more states applying for today’s exchange grant deadline. Mike Hash, interim director of the CCIIO, told reporters on a conference call today that he estimates 10 states could submit applications.

Finally, with more states making preparations to establish exchanges either through legislation or by Executive Order, there will likely be more IT contract solicitations. Along those lines, California this week formally awarded Accenture a $359 million IT contract to build and maintain the state’s health insurance exchange. Accenture is not tackling this large project alone. The firm is using health insurance exchange software from Getinsured as well CGI and Oracle as subcontractors.

Weekly Health Policy Update: Supreme Court Ruling, FDA User Fee Bill, and Exchange Developments