Weekly Health Care Wrap-Up
President Opens Door for “Modest” Medicare Reforms in the SOTU
In his State of the Union address, President Obama addressed Medicare reforms briefly, in addition to tax reform, as a means to tackle the looming budget crisis, saying “Those of us who care deeply about programs like Medicare must embrace the need for modest reforms… I’m prepared to enact reforms that will achieve the same amount of health care savings by the beginning of the next decade as the reforms proposed by the bipartisan Simpson-Bowles commission…why would we choose to make deeper cuts to education and Medicare just to protect special interest tax breaks?” Republicans accused the President of “playing politics” with Medicare and asked, “when is the President going to offer his plan to save it?” It remains unclear what appetite Congress will have for significant tax and entitlement reforms this year. Stay tuned.
HHS letter to Senate Appropriations Details Sequester Impact
Senate Appropriations Chairwoman Barbara Mikulski has posted on the Committee website letters from various government agencies detailing the effects of sequester on their departments. In the letter from HHS, Secretary Kathleen Sebelius writes that “our efforts to protect the health and enhance the well-being of all Americans” will be weakened. She specifically cites the impact on services for families and children, mental health services, the CDC, the FDA and the NIH. While many health safety net programs, including Medicaid, are exempt from the cuts, payments to Medicare providers will be cut by two percent by the sequester.
From the States
A complete roundup of this week’s exchange action in the states is available through our State of the States: Health Insurance Exchanges publication here.
North Carolina Will Not Expand Medicaid
Republican Governor Pat McCroy of North Carolina has chosen not to expand Medicaid, citing that the current program is already too troubled. Governor McCroy also said the state will play no role in setting up a health insurance exchange. Read more here.
Wisconsin Rejects Medicaid Expansion
Governor Scott Walker has rejected the expansion of Medicaid in Wisconsin proposing instead to remove people from the state’s Medicaid program and place them in the federally-facilitated exchange. Read more here.
Health Insurance Exchanges: State of the States update
oday, February 15, was the final deadline for states to inform HHS if they intend to pursue a State Partnership Exchange for the 2014 plan year. While we spent much of this week anticipating a flurry of letters and announcements, instead, it’s been an eerily quiet day. Expect additional information on which states ended up applying for State Partnerships to be released in the future, but until then, let’s review what happened this week.
Yesterday, the Senate Finance Committee held a hearing titled, “Health Insurance Exchanges: Progress Report” to check in on health insurance exchange implementation progress. The Director of CCIIO, Gary Cohen, received multiple questions from Committee Chairman Max Baucus (D-MT) who expressed concern that CCIIO might be behind schedule. Cohen reiterated that CMS is on track, meeting deadlines, and has ample contingency plans. Cohen also fielded questions on whether the data hub would be ready, CCIIO’s plans to market the exchanges, and efforts CCIIO is taking to ensure that the process to sign up for insurance is user friendly and streamlined. During the course of the hearing, Cohen disclosed a few key time periods for exchange implementation. For insurers interested in offering plans on the Federally-facilitated Exchange, HHS will accept applications from March 28 to April 30 and decide by July which plans will be offered. Also, around June, HHS will launch a large media campaign to educate the public about exchanges and direct people to Healthcare.gov. Toward the end of the hearing, Senator Baucus asked Cohen to provide him with a timeline of major dates for exchange implementation so he can track CCIIO’s progress. The Committee has posted a video recording of the hearing and witness testimony.
On Wednesday, Governor Pat Quinn (D) of Illinois received some welcome news when he learned that his state had received conditional approval to operate a State Partnership Exchange to perform plan management and consumer assistance activities. However, the approval came with a long to-do list for the state. In addition to signing memorandums of understanding with the Illinois Department of Human Services and with CMS, the state needs to hire an IT vendor to customize its SERFF system by February 28, if the state plans to use SERFF to collect health plan data.
Also on Wednesday, Governor Margaret Hassan (D) of New Hampshire sent a Declaration Letter to HHS declaring the state’s intention to enter into a State Partnership Exchange to perform plan management and consumer assistance activities. In a press release, Hassan explained her decision by saying, “Because of action taken by the last legislature, pursuing a partnership health benefit marketplace is the best option we have left to maintain control at the state level of health insurance coverage offered to our citizens and businesses.” She also finalized that New Hampshire will not operate its own reinsurance program. Governor Hassan’s letter was announced the day after the legislature’s Joint Health Care Reform Oversight Committee signed off on the Governor’s plan to pursue a State Partnership Exchange.
And late last night, Governor Terry Branstad (R) of Iowa is reported to have submitted a Blueprint application for a State Partnership Exchange. The application comes after Governor Branstad sent a letter to HHS on December 14, 2012, declaring that Iowa would not operate a state-based exchange, but would “partner with the Federal government” to keep control over its insurance regulation and Medicaid eligibility.
In an interesting move, Governor Bob McDonnell (R) sent a letter to Gary Cohen yesterday stating that Virginia “will choose to evaluate whether a plan or issuer meets particular certification standards and conduct other specified plan management activities as part of its long-standing regulatory role and in connection with market reform standards.” The letter from Governor McDonnell coincides with legislation that was passed by the Virginia General Assembly yesterday, which would authorize the State Corporation Commission to supervise insurers and health plans offered on Virginia’s Federally-facilitated Exchange.Senate Bill 922, which was passed by the Virginia Senate earlier this month, specifically says Virginia has the authority to perform any “analyses and reviews necessary to support the certification, decertification, and recertification of qualified health plans and stand-alone dental plans for the federal health benefit exchange,” as long as the federal government provides funding for those activities.
Ohio Insurance Commissioner Mary Taylor (R) sent a similar letter to CCIIO on Thursday as well, stating that the Ohio Department of Insurance had the authority and capacity “to oversee the certification of Qualified Health Plans.” She also said her department would continue to regulate health plans by collecting information on rates, ensuring plan compliance, resolving consumer complains, helping manage plan certification and would continue to collect, review and approve premium rate and benefit information, among other duties. It remains to be seen how CCIIO interprets and responds to these letters; however, HHS has said in the past that it intends to coordinate regulatory activities with states to avoid duplication, to the extent possible.
For a map of states that have received conditional approval to operate either State-based Exchanges or State Partnership Exchanges, see the attached PDF.
In Idaho, efforts to pass exchange-enabling legislation championed by Governor C.L. “Butch” Otter (R) have slowed. After being approved last week by the Senate Commerce and Human Resources Committee, the bill has yet to come to a vote on the floor of the Senate. Meanwhile, in the House, a group of freshman legislators pledged to support Governor Otter’s bill if he supported their trailer bill, House Bill 179, which would increase the size of the exchange’s Board of Directors from 16 to 18 by adding one member of the House of Representatives and one member of the Senate. The bill would also increase legislative oversight of the Idaho Health Insurance Exchange.
To the south in New Mexico, lawmakers are now wrestling with two exchange bills and two very different visions for how the New Mexico Health Insurance Exchange will operate. At the heart of the debate is whether the exchange will be an “active purchaser” or a clearinghouse offering all approved QHP’s. House Democrats, favoring an “active purchaser” exchange, have been moving their bill, HB 168, through the House. On Tuesday, the legislation was passed along party lines by the House Health, Government and Indian Affairs Committee. In contrast, House Republicans only just this week introduced their bill, HB 563, which would establish an exchange governed by a 14 person board of directors and would specifically ban the exchange from being an active purchaser. As for which bill will emerge, it’s too soon to say. Governor Susana Martinez (R) favors the clearinghouse approach, but her administration has been negotiating with House Democrats on their bill.
Also this week, the Virgin Islands Health Care Reform Implementation Task Force received a long-awaited report on whether the territory’s IT systems could be upgraded to support a health insurance exchange. After examining the territory’s current legacy IT systems, the report concluded that the Virgin Islands could not create a health insurance exchange and recommended that the territory link to an exchange developed by another state. The concept of using another state’s IT system is not unheard of for the Virgin Islands. Currently, the territory uses West Virginia’s Medicaid Management System to process Medicaid claims. The task force is scheduled to meet on February 28 to discuss the report’s conclusions.
Finally, with the exchange plans for numerous states still unknown, we will continue to monitor Blueprint Application submissions and report back next week with any new developments.