Weekly Health Care Wrap-Up
HHS Releases FAQs on Exchanges, Medicaid
On Monday, the Department of Health and Human Services (HHS) released a series of FAQs designed to answer some of the outstanding questions surrounding the Medicaid expansion and exchanges under the Affordable Care Act (ACA). Of note, the document announced that states will need to expand Medicaid to 133 percent of the federal poverty level (FPL) to be eligible for the enhanced federal match — partial expansions will not be eligible for the extra federal funding. The document also reiterates the December 14 deadline for state-based exchange Blueprints and the February 15 deadline for partnership exchanges. According to the information provided, states will not be charged for use of the federal data hub and HHS anticipates reimbursing states pursuing partnership activities in support of the FFE. A complete recap of this week’s exchange activities can be found in our State of the States publication.
Senate Ds Claim Committee Slots
We received a glimpse into the 113th Congress this week, when Democrats announced several key committee assignments. The Senate Finance Committee, which lost four members this election cycle, will add Democratic Senators Sherrod Brown (OH) and Michael Bennet (CO). The Senate HELP committee will add Democrats Tammy Baldwin (WI), Christopher Murphy (CT) and Elizabeth Warren (MA). Meanwhile, Senator Parry Murray (WA) will be at the helm of the Senate Budget Committee in 2013, replacing retiring Senator Kent Conrad (ND). The Republican assignments have yet to be announced.
A new study from the Government Accountability Office (GAO) finds that the Medicaid Integrity Group has hired more than one company to perform its audits, with both contractors reviewing similar areas without coordination or communication. GAO recommends that CMS remove duplicate contractors and use comprehensive reviews to better target their audits. Read the entire reporthere.
The Commonwealth Fund released an issue brief this week examining the trends in private employer-based health insurance premiums and deductibles from 2003 to 2011. The brief found that premiums have increased 62 percent and deductibles have more than doubled.
The American Hospital Association is out with a study finding that Medicare patients, while living longer, are growing sicker and therefore using more services. The rise in obesity and chronic conditions has been staggering in Medicare population, with obesity rates doubling since 1987 and diabetes rates increasing from 18 percent in 2002 to 27 in 2010. Due to medical breakthroughs and expanded use of health care services, life expectancy has risen despite the sicker population, which has vast cost implications for the Medicare program.
A new analysis from the Kaiser Family Foundation provides a detailed look at the difference in the availability of health coverage at small and large employers, as well as the variations in plan costs and cost-sharing requirements.
Health Insurance Exchanges: State of the States update
Today is the final day for states to declare their intent to develop a state-based exchange and submit their Blueprint to HHS. Already, one state that had previously signaled an interest in a state-based exchange, Iowa, has reversed course. But more on that later. As we await additional announcements from governors and HHS on which states will move forward with building a state-based exchange, let’s review a week packed with exchange developments.
Exchange officials in Colorado, Connecticut, Massachusetts, Maryland, Oregon and Washington were able to breath a collective sigh of relief this week because on Monday, HHS conditionally approved their Blueprint applications. HHS also revealed during a press call that, including the six states that received conditional approval, HHS has received Blueprint applications from 14 states total. According to Director Cohen, the reason those six states were approved first was because they were the “earliest ones to make their application available to HHS.” Then on Friday, HHS announced that the District of Columbia, Kentucky and New York also received conditional approval to operate exchanges.
Also on Monday, CCIIO released a “Frequently Asked Questions on Exchanges, Market Reforms and Medicaid,” which included information on the Medicaid expansion and exchanges, with some anticipated details surrounding the FFE. The FAQ states that there will be no charge for states to access the federal “Data Hub.” The FAQ also says that after Exchange Grant opportunities expire in 2014, HHS anticipates offering continued funding under a different source for state activities performed on behalf of the FFE.
On Capitol Hill yesterday, the House Energy and Commerce Health Subcommittee held a hearing on the implementation of exchanges and the Medicaid expansion. During the hearing, CCIIO Director Gary Cohen fielded a few tough questions from lawmakers and denied allegations from Representative Michael Burgess (R-TX) that HHS intentionally delayed the release of regulations before the November elections for political reasons. He also reiterated his view that states and the federal government will be ready to run exchanges in 10 months. Director Cohen was joined by CMS Deputy Administrator/Director Cindy Mann, who is in charge of Medicaid at CMS, and officials from the states of Arkansas, Louisiana, Maryland and Pennsylvania. Full video of the hearing and witness testimony can be found on the subcommittee website.
Moving to the states, two states decided against creating state-based exchanges this week. On Monday, Governor Bill Haslam (R) of Tennessee decided that his state would not create a state-based exchange. In a statement, Haslam did not express opposition to the idea of an exchange, but he said he was concerned over how much independence Tennessee would have to run its exchange. “What our administration has been working to understand is whether we’d have the flexibility for it to be a true state-based exchanged, how the data exchange would work, and if it would work.” He also expressed concerns that exchange rules from the federal government had been developed haphazardly. “What has concerned me more and more is that they seem to be making this up as they go.”
In Pennsylvania, Governor Tom Corbett (R) sent a letter to HHS Secretary Sebelius stating that Pennsylvania would not develop a state-based exchange due to regulatory uncertainty. In his letter, he wrote “With regulations still to be finalized and with more forthcoming, too many unknowns remain for us to plan accordingly.”
Moving in a different direction, Governor C.L. “Butch” Otter announced on Tuesday that Idaho would pursue a state-based exchange, subject to legislative approval. In a statement released to the press, Governor Otter presented the stark choice faced by the state. “Our options have come down to this: Do nothing and be at the federal government’s mercy in how that exchange is designed and run, or take a seat at the table and play the cards we’ve been dealt.” His decision to pursue a state-based exchange comes after a working group appointed by the governor to examine the exchange issue recommended that Idaho create a state-based exchange, despite warnings from KPMG that the state had a slim chance of meeting HHS deadlines. It is not clear how HHS will react to Idaho’s announcement. While the state has signaled an intention to create a state-based exchange, the state’s lack of planning and actions by the legislature could alter the state’s course.
Also this week, on Thursday, Governor Susana Martinez (R) sent a Declaration Letter to Secretary Sebelius announcing that New Mexico will create a state-based health insurance exchange. In her letter, Governor Martinez wrote that the Office of Health Care Reform will coordinate developing New Mexico’s state-based exchange with the New Mexico Health Insurance Alliance, a quasi-governmental non-profit agency created in 1994 by the legislature to increase access to health insurance. One major hurdle for the exchange is that lawmakers and the governor have been unable to pass health insurance exchange legislation.
Staying in the west, Governor Gary Herbert (R) of Utah sent President Obama aletter this week asking him to let the state keep its current exchange, Avenue H. While Governor Herbert said he would expand the exchange to serve individuals, he wrote in his letter that, “we never intended for our exchange to administer Medicaid, enforce the individual mandate, or distribute federal tax credits.” If Utah’s exchange were allowed to operate without adhering to those portions of the ACA, Governor Herbert suggests that it could be a game changer for other governors still on the fence. In his letter, Governor Herbert writes “I am confident that if you make this change, several other states will join Utah and request certification for ‘state based exchanges’ based on our model.” Today, (Friday), Secretary Sebelius wrote back to Governor Herbert with an upbeat letter that could present an opportunity for Utah’s exchange to be certified in its current form. While we haven’t seen the full letter, according to an excerpt from an AP article, Secretary Sebelius wrote, “We look forward to working with you toward certifying the Utah exchange, ensuring that consumers and small businesses have access to affordable, high-quality coverage.”
Also this week, on Wednesday, Rhode Island submitted its Blueprint to operate a state-based exchange. Rhode Island has been diligently planning to operate a state-based exchange and should be publicly announcing its selection of an IT vendor for the backbone of its health insurance exchange in the near future.
On the topic of Partnership exchanges, after meeting with various members of the state legislature, Governor Mike Beebe (D) of Arkansas announced that he is no longer planning to pursue a state-based exchange. After HHS pushed back the November 16 deadline for states to declare a state-based exchange and submit their Blueprint, Governor Beebe decided to see if legislators were interested in creating a state-based exchange. Instead, Arkansas will revert to pursuing a Federal-State Partnership exchange, an option the state has been planning for since late 2011.
Iowa submitted a letter to HHS Secretary Kathleen Sebelius today (Friday) declaring that Iowa will pursue a Federal-State Partnership exchange. While the state had been examining the possibility of moving forward with a state-based exchange, according to Governor Terry Branstad’s (R) letter, the “cost of building and maintaining a state-financed and based exchange, estimated at $15.9 million annually” was too high for the state. Currently, five states including Arkansas, Delaware, Illinois, Iowa and North Carolina are known to be moving forward with a Partnership exchange while a few others are still evaluating the option.
And finally, the Hawaii Health Connector awarded a $53 million, four year contract to CGI technologies to develop and support the Connector’s IT system last Friday. CGI currently has extensive IT contracts with the federal government to develop the technology infrastructure for the FFE and a contract to develop the IT backbone for Colorado’s health benefit exchange.