White House Tells States to Get On Board with Healthcare Reform
By Sam Baker
Source: thehill.com
The Obama administration is aggressively pushing states to implement the healthcare reform law now that the Supreme Court has upheld it.
In the two weeks since the court issued its decision, the Health and Human Services Department has pushed out new grants, new policies and a new rhetorical standby: It’s time to get onboard.
“The volume of activity has certainly gone up,” said Alan Weil, executive director of the National Academy for State Health Policy.
HHS has been steadfastly implementing the Affordable Care Act since President Obama signed it in 2010, and state outreach has always been part of that effort — the department has awarded hundreds of millions of dollars in implementation grants.
But some Republican governors dug in their heels against implementing at least the biggest pieces of a law they thought the Supreme Court might strike down. With that possibility out of the way, HHS is making another big push to bring states onboard.
"Now that the Supreme Court has issued a decision, we want to work with you to achieve our ultimate shared goal of ensuring that every American has access to affordable, quality healthcare," HHS Secretary Kathleen Sebelius wrote in a letter to governors this past Tuesday.
She has echoed that message several times since the court issued its historic 5-4 decision upholding most of the Affordable Care Act, and Obama sounded a similar theme when the ruling was announced.
The administration has matched it’s “let’s move on” rhetoric with policy.
The day after the Supreme Court announced its decision, HHS unveiled new funding opportunities designed to help states plan for their insurance exchanges. HHS officials said they expected to receive funding requests from states that had previously resisted the idea of an exchange.
“I think there will be some renewed, ‘Let’s at least figure out what this will look like,’” Weil said.
Exchanges are new, centralized marketplaces where individuals and small businesses will buy private insurance. The ACA calls on each state to set up its own exchange and authorizes a federally run fallback in any state that doesn’t act. Exchanges have to be up and running by 2014, so HHS has to certify in 2013 whether each state will be able to build its own.
Some Republican governors who said they were waiting for the Supreme Court are now saying they won’t implement the law until they see how November’s elections shake out and whether Republicans pick up enough seats to try to repeal the law.
“Saying you’re going to wait is, in effect, making a decision,” Weil said. “If the calendar has made up your mind, then you have made up your mind.”
Although some red-state delays are pure politics, Weil said many states were legitimately leery of stepping up to such a massive undertaking when there seemed to be a good chance the Supreme Court would render all of that effort moot.
Waiting for the court “wasn’t a crazy thing to do,” he said. He expects some of those states to apply for new grant money and look more seriously at what a state-run exchange would entail.
“Gambling on the outcome of an election is a real gamble,” he said. “And so I think there are a lot of states that are realizing that with only one hurdle left, there’s a very real chance this law is going to be around. They are renewing their efforts to figure out what it means for them.”
HHS is trying to make that process easy. Federal officials made it abundantly clear at the outset that they want each state to set up its own exchange, which most policy experts agree would be better than a federal exchange.
The department said last year, in its first proposed rules on exchanges, that it would certify state-based exchanges after 2014, in case states weren’t ready on time but could get there eventually.
Weil was surprised by that policy at the time. But it’s consistent, he said, with HHS’s announcement after the Supreme Court ruling that states could receive exchange planning grants through the end of 2014. Many observers assumed planning grants would be cut off at the beginning of the year.
HHS also made a point last week to explicitly remind states that planning grants are for planning — states don’t have to set up an exchange just because they took federal planning money, and they don’t have to pay the money back if they ultimately decide to let the federal government handle their exchanges.
“We expect that, as states study their options, they will recognize that this is a good deal,” Medicare Administrator Marilyn Tavenner said in a letter to Republican governors.
While the Supreme Court cleared away one major area of uncertainty, it also raised a new question for states to answer: Do they want to participate in the healthcare law’s Medicaid expansion?
As written, states would have had to participate or give up all of their federal Medicaid funding. But the Supreme Court said that setup was unconstitutional and states must have the right to opt out of the expansion while keeping the rest of their programs intact.
The quickest decisions came from Republican governors with an eye for the national stage, including Texas’s Rick Perry and Louisiana’s Bobby Jindal, who lumped Medicaid and the exchanges together and said they wouldn’t do anything to implement “ObamaCare.”
The practical considerations between the two programs, though, are very different. (For example, there is no federal fallback for states that don’t accept the Medicaid expansion.) And though states had time to at least think about exchanges while they waited for the Supreme Court, the Medicaid decision is altogether new.
“On exchanges, states have been thinking about it and following this whole discussion. (Medicaid) was like dropped out of the sky,” Weil said. “No one has spent the last year thinking about whether or not they wanted to do the Medicaid expansion.”
CHANGING TIMES
Companies are seeking alternate health coverage offerings in the face of a shaky economy and the potential impact of the health care reform law, according to a new report by J.D. Power and Associates. The study found that employers are considering such options as defined contributions, vouchers and exchange purchasing in an effort to control spiraling health care costs. Employers, however, seem committed overall to continuing to offer health benefits. The study found that only 13 percent of fully insured employers and 14 percent of self-insured companies said they probably or definitely will not offer employer-sponsored benefits in the future.
PPACA Ruling Answers Some Questions, Leaves Others Hanging
The wait is over -- sort of.
Companies that had been delaying action on the Patient Protection and Affordable Care Act (PPACA) should now start making plans to comply, experts say. Yet while the Supreme Court's 5-4 ruling in June preserved the law, the full impact of PPACA's regulations remains to be seen.
For now, employers should prepare to meet the most immediate requirements, according to the law firm Morgan Lewis. In a recent web posting, the firm notes that companies should pay attention to the provisions that apply in 2012 and 2013, including:
- Reporting medical coverage value on 2012 W-2s
- Preparing to receive and properly distribute any medical loss ratio rebates
- Preparing to provide a summary of benefits and coverage in their 2013 enrollment packet
- Finishing updates to their summary plan description for any plan design changes from PPACA in 2011 and 2012
- Implementing an annual $2,500 cap on health care spending account contributions (beginning with 2013 plan years)
- Preparing for the patient-centered outcomes fee due in July 2013 ($1 per covered life for 2012. Insurers will remit the fee for fully insured plans; self-insured plans will pay it directly.)
Some other requirements, however, are far from crystal clear, according to a report in Business Insurance. For instance, the "pay or play" provision in the law requires employers with 50 or more workers that don't offer coverage to full-time employees to pay a penalty of $2,000 per worker. But the government has yet to clarify if the full fee would apply if employers mistakenly misclassify employees. Current regulations also fail to explain how the law applies to employees whose hours fluctuate weekly or monthly.
The IRS and other agencies are expected to release more guidance in the coming months, which should clear up some questions for employers. Yet the federal government itself and many states likely won't be able to meet all the deadlines on actions required to actually implement many of the major provisions, which start in 2014, according to Kaiser Health News.
The biggest stumbling block will be setting up the health care exchanges -- online marketplaces where some businesses and consumers will shop for coverage.
"Except in a few states, it's impossible to do this in the time allowed -- it's going to have to slip," said Joseph Antos of the American Enterprise Institute in the KHN report.
Even if some states are able to establish exchanges on time, the federal government's exchange -- which states can opt to use instead of creating their own -- likely won't be up and running anytime soon, said Cheryl Smith of Leavitt Partners.
"The 2014 start is untenable for federally compliant exchanges," Smith told KHN. "They have to verify income, they have to verify residency, they have to verify citizenship, and do all that through different federal agencies. Before [federal subsidies] can flow, every one of those things has to be done."
Some experts say that, barring a major political change in Washington, employers will be coping with PPACA in the years to come. Still, nothing can be ruled out until after the November elections, others note.
"Other chapters in the political front [regarding PPACA] have yet to be written," Dave Guilmette of Cigna Corp. told Business Insurance.
Companies Look to Pharmacy Benefits for Savings
Employers increasingly are putting prescription drugs -- specifically their plan designs and providers -- under the microscope in hopes of spotting more health care savings.
Following a trend among health care plans, more prescription drug plans are shifting to a "value-based" model, according to Lauren Flynn Kelly, a blogger with AIS Health. In a recent post, Kelly highlighted one particular eight-tier formula that assigned clinical and financial values to drugs on each tier and included only a few lower-cost generics on its first tier.
Ritu Malhotra of The Segal Co. noted that this type of plan design promotes the use of generics -- particularly the lower-cost generic options.
"I think the value part of the value-based plan design is that those drugs are effective and much more cost-effective and could potentially result in a savings on the medical side if patients are more adherent," Malhotra notes in the AIS Health post.
Patient adherence is a primary goal of value-based plans, Kelly wrote. Unfortunately for employers, it's an area where the statistics remain grim. A recent poll by Express Scripts Inc. found that non-adherence cost the nation about $317.4 billion in 2011 in treatment -- that's not counting lost productivity and other costs that can occur when patients don't follow their prescribed drug regimen, according to a report in Employee Benefit News.
While adherence remains a constant obstacle, recent moves in the pharmacy benefit marketplace may create alternative opportunities for lower costs and stronger benefits, an online Workforce report suggests.
Express Scripts' $29 billion purchase of Medco Health Solutions could shake up the pharmacy benefit management (PBM) landscape, potentially creating a polarization between big PBMs that offer the best costs and smaller PBMs that can offer more services, F. Randy Vogenberg of the Institute for Integrated Healthcare told Workforce.
Linda Cahn, founder of Pharmacy Benefits Consultants, suggests that the merger may prompt some employers to start shopping for better deals.
"I think people are aware that changing PBMs can save them large amounts of money, and they are also aware that marketplace developments create further incentives to conduct [request for proposals]," Cahn told Workforce.
Most employers, however, likely won't make any sudden moves with their PBMs at renewal time later this year.
"Change creates controversy, and employers are not looking for controversy," Vogenberg said.
Kaiser Health Tracking Poll: Early Reaction to Supreme Court Decision on the ACA
This poll fielded following the Supreme Court’s decision upholding the heart of the Affordable Care Act (ACA) finds a majority of Americans (56 percent) now say they would like to see the law’s detractors stop their efforts to block its implementation and move on to other national problems.
Democrats overwhelmingly say opponents should move on to other issues (82 percent), as do half (51 percent) of independents and a quarter (26 percent) of Republicans. But, seven in ten Republicans (69 percent) say they want to see efforts to stop the law continue, a view shared by 41 percent of independents and 14 percent of Democrats.
The public is also divided in its emotional reaction to the decision, with similar shares reporting being angry (17 percent) and enthusiastic (18 percent). Negative emotions run highest among Republicans who support the Tea Party movement, with 49 percent of this group saying they are angry at the decision.
Solid majorities of voters of every political stripe say the decision won’t impact whether or not they vote this November – though Republicans are more likely than Democrats (31 percent compared to 18 percent) to say the result makes them more likely to turn out.
The poll is the latest in a series designed and analyzed by the Foundation's public opinion research team.
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Information provided by the Public Opinion and Survey Research Program
Publication Number: 8329
Publish Date: 20-07-0212
Learn How Inflammation Can Lead to Chronic Diseases
By Dr. Ann Kulze, M.D.
Inflammation is now widely recognized as a primary driver for most all chronic diseases and it appears that losing even modest amounts of weight can effectively douse the damaging inferno of excess inflammation in the body. For this one year evaluation, 438 women were placed on a weight loss program through diet or diet and exercise. For women in the diet and exercise group, measures of C-reactive protein (a key marker for inflammation in the body) dropped 42%. In the diet only group, levels dropped by 36 percent. For both groups, losing just 5% of their initial body weight provided even larger reductions in C-reactive protein. Because higher levels of C-reactive protein have been linked to a litany of chronic diseases including heart disease, type 2 diabetes, and cancers of the breast, colon, lung and uterus, this study underscores the enormous benefits that can result from losing even small amounts of excess body fat.
Some PPACA Compliance Tabled Until After Elections
July 10, 2012
Source: eba.benefitnews.com
Most employers waited for the U.S. Supreme Court’s landmark decision upholding health care reform before developing a strategy on provisions in the Patient Protection and Affordable Care Act (PPACA,) slated to take effect in 2014 and beyond, according to a new Mercer survey.
But some eyebrows will be raised at Mercer’s findings that the waiting game continues for 16% of the more than 4,000 respondents, who admitted no action will be taken on 2014 compliance until after the November elections. Forty percent said they will begin examining these parts of the law now that the court has ruled.
Although health care reform still faces a contentious political outlook, Mercer suggests that employers should stay on track in their efforts to comply with PPACA as enacted or else they may face penalties.
“Employers who prefer to continue in wait-and-see mode until after the November elections will have less time to prepare, should they ultimately decide to comply with the law’s 2014 requirements,” says Mercer partner Tracy Watts. “In the meantime, they still need to comply with all the requirements that have already gone into effect.”
Certainly, employers must act quickly to implement new requirements for 2012 and 2013, such as providing benefit summary disclosures, complying with new dollar limits on health care flexible spending arrangements, and increasing Medicare withholding for high earners. But the rules going into effect in 2014 that are aimed at expanding access will have broader implications for many employers.
More than a fourth of survey respondents (28%) said that compliance with the new requirement that employees working an average of 30 or more hours per week must be eligible for coverage will present a “significant challenge” for their organization.
“Employers with large part-time populations, such as retailers and health care organizations, are faced with the difficult choice of either increasing the number of employees eligible for coverage, or changing their workforce strategy so that employees work fewer hours,” said David Rahill, President of Mercer’s health and benefits business. “With the average cost of health coverage now exceeding $10,000 per employee, a big jump in enrollment is not economically feasible for many employers.”
The requirement to auto-enroll newly eligible employees in a health plan – which means that employees will automatically be covered unless they take action to opt out – is also expected to increase the rolls of the insured for many employers. Nearly one-third (29%) of respondents to the Mercer survey said this will be a significant challenge, especially because other provisions of PPACA will limit the amount of health plan costs employers can pass along to employees through higher premiums or deductibles.
Still, the provision that worries most employers – 47% of survey respondents – is the excise tax on high-cost plans, expected to go into effect in 2018.
“Employers already struggling with annual health care cost increases of double or triple general inflation are determined to avoid this tax,” said Sharon Cunninghis, U.S. leader of Mercer’s health and benefits business. “We’ve been seeing a lot more interest in cost-saving measures, such as consumer-directed health plans and employee health management, since the tax was proposed.”
When asked whether they agreed or disagreed with the statement, “[The reform law] has provided the impetus for our organization to pursue more aggressive health benefit cost-management strategies,” more than half – 52% – agreed. Employer actions were one factor that helped to slow health benefit cost growth in 2011 relative to 2010.
Survey results suggest this trend will continue. Asked whether they planned to be more aggressive about managing plan costs going forward now that health reform has been confirmed, 54% said yes. And while 41% said no, it’s only because they were already taking aggressive action to manage expenses.
A Mercer webcast will be held on July 12 at noon EDT to provide a closer look at how the Supreme Court's decision will affect employers going forward.
Employee Health Incentive 'Benefit' A Perk For Employers More Than Workers: Survey
Source: huffingtonpost.com
ATLANTA -- More employers are offering financial incentives for employees to improve their health, according to a 2012 benefits survey released Monday at the Society for Human Resource Management's annual conference -- a rare bright spot in a survey that revealed overall benefits at U.S. companies remain at the bottom of a three-year decline.
But despite the physical benefit to employees, health incentive programs may offer more financial benefits to employers than to the workers who take advantage of them, raising the question of who really wins from this type of perk.
Just as they did in 2011, employers in 2012 plan to spend, on average, 19 percent of each employee's salary on voluntary benefits, 18 percent on mandatory benefits, and another 10 percent on pay for time the employees did not work. The results reflect the ongoing weakness of the current job market, where salaries and benefits failed to keep pace with rising economic output. Seventy-three percent of respondents said the economy has negatively impacted their benefits offerings.
For companies hoping to offset skyrocketing health-care costs, which rose a whopping 6.9 percent in just the past year, employee-health incentive programs offer to pay employees to adopt healthier habits today and reduce the chances that they will need expensive health care in the future. In 2011, employers were responsible for paying 60.3 percent of the total cost of health-insurance plans for their employees.
From the perspective of an employer, health incentives make a lot of sense. Of the 550 randomly selected member companies of all sizes, the percentage that offered wellness bonuses this year climbed more than 50 percent since 2008.
Within that rise, well-known health risks like smoking and obesity were the prime targets of corporate efforts. The number of companies providing discounts on health-care premiums to employees who did not smoke more than doubled in four years to 20 percent, as did the companies offering bonuses for taking part in a weight loss program.
The key change, said SHRM's vice president for research, Mark Schmit, is that more initiative is being shown on both sides. "Until recently, many employee wellness programs were primarily made up of general education initiatives, like handing out brochures," he said. "Today more organizations are actively coming up with innovative discount programs to use as incentives -- because they work."
All Quiet on the Health Reform Front
By Elise Viebeck
Source: thehill.com
This week's healthcare schedule will remind some of a quieter, simpler time — a time before healthcare reform.
Now that the Supreme Court has ruled on the Affordable Care Act and the House has voted to repeal the law for a second time, the issue may finally recede somewhat on Capitol Hill.
This is especially true as August recess approaches and as other issues — such as Medicare payments to physicians — cry out for attention before January 1.
The one exception is a possible healthcare repeal vote in the Senate, recently promised by Minority Leader Mitch McConnell (R-Ky.).
"I would remind you all that we had that vote in 2011. Every single Republican voted to repeal it," McConnell said at a press conference Tuesday. "We believe it's appropriate to have that vote again and we'll be working to get that kind of vote in the near future." That day, he filed an amendment to the Small Business Jobs and Tax Relief Act that would repeal the law. Senate Majority Leader Harry Reid (D-Nev.) has vowed to block the effort.
This week, Wednesday will be both chambers' busiest day for health issues.
The House Energy and Commerce Health Subcommittee will hold a hearing on the sustainable-growth rate, the mechanism by which doctors are paid under Medicare. The payment rate is scheduled for a drastic cut on Jan. 1 unless Congress acts.
The House Appropriations Subcommittee on Labor, Health and Human Services and Education will markup the fiscal year 2013 bill.
"If Washington is going to tackle our spending problem, we’ve simply got to start setting priorities," Chairman Denny Rehberg (R-Mont.) said in a statement. "We can strike a balance between funding responsible, effective programs that work for people and trimming waste and duplication to help reduce the deficit."
The Senate Special Committee on Aging will hold a hearing on dual-eligibles, the special population that is enrolled in both Medicare and Medicaid.
The Senate Caucus on International Narcotics Control will holding a hearing on prescription drug abuse, with testimony from Gil Kerlikowske, director of the Office of National Drug Control Policy.
House Judiciary's Subcommittee on the Constitution will hold a hearing on a constitutional amendment codifying as a right parents' freedom to "direct the upbringing, education and care of their children." The measure, sponsored by Rep. Trent Franks (R-Ariz.), has vast implications for healthcare and education. It had 70 cosponsors on Friday, while a companion measure in the Senate, from Jim DeMint (R-S.C.), had 11.
The House Energy and Commerce Subcommittee on Energy and Power will hold a hearing on the distribution, sale and consumption of certain asthma inhalers.
How the SCOTUS Medicaid Ruling Could Save Money
Source: kaiserhealthnews.org
By Marilyn Werber Serafini
KHN Staff Writer
This story was produced in collaboration with POLITICO Pro.
The Supreme Court ruling on the health care law could have an unexpected effect -- saving the federal government money, say some budget experts.
The exact amount of savings is still unknown, because it depends on how many states decide not to expand their Medicaid programs, now that the court has said that they have a choice in the matter. Washington would save because it will provide the lion's share of funding for the jointly-run program for the poor and disabled.
Already, Republican governors in about a dozen states are threatening not to move forward with the expansion, including Texas, Florida, Mississippi, South Carolina, Louisiana and Wisconsin. Some, like Texas and Florida, have given a firm “no” to the expansion, while others – like Wisconsin – have hinted there’s a bit of wiggle room.
The details won’t become clear until the nonpartisan Congressional Budget Office weighs in the week of July 23 with estimates of how the court’s ruling will affect federal spending. In the meantime, the Republican-controlled House has scheduled a vote to repeal the entire law on Wednesday. The bill is expected to pass the House easily, but it won’t go any further since Democrats control the Senate and White House.
Deficit reduction – and the role of the health law in that – is expected to be a political issue for the foreseeable future. Congress early next year must negotiate a budget deficit reduction deal or face automatic federal spending cuts of as much as $1.2 trillion on everything from Medicare to defense.
Here’s how the court’s decision may affect federal spending:
If a state declines the expansion, only about one-fifth of the people who would have qualified for Medicaid will be eligible instead for federal premium and cost-sharing subsidies, according to Genevieve Kenney, senior fellow at the Urban Institute. (The law makes people up to 138 percent of the federal poverty line eligible for Medicaid; those between 100 percent and 138 percent could alternatively receive subsidies.) The subsidies cost more, but the federal government would provide them to far fewer people, she said.
In 2016, for example, the per-person cost of providing Medicaid would be about $5,400, according to CBO data. The average cost of providing subsidies instead would be more, the data show. It’s about $5,210 for an average adult, but this low-income population is not average. These enrollees will get more in the way of subsidies, because they will qualify for the maximum amount of subsidies, raising the price tag higher than what it would be if they got Medicaid.
In Florida, for example, 1.3 million people would be newly eligible for Medicaid if it expands its program, according to the institute. But, if the state declines, as Republican Gov. Rick Scott wants to do, the federal government would instead pay out subsidies for private insurance to about 300,000 of those people.
To be sure, the cost data is rough, and the eventual outcome would vary from state to state. Some conservatives project that the federal government’s costs would rise. The Heritage Foundation and the American Action Forum are among groups that have come up with estimates, one of which projects that the federal government could spend up to $100 billion more per year.
Heritage’s Drew Gonshorowski calculates that the federal government will spend between $34 and $90 billion more over 10 years. While he believes that the subsidies will cost more than Medicaid, he argues that the same number of people will get subsidies as would have received Medicaid.
He predicts that CBO’s forthcoming report will bear that out. CBO scoring estimates in the past "find that less enrollment in Medicaid combined with more enrollment in exchanges results in more spending," Gonshorowski wrote in a blog post July 6.
Politically, if even one state declines the Medicaid expansion, it would not be welcome news to President Barack Obama and to Democrats, who are counting on Medicaid to expand health insurance coverage to an estimated 17 million people.
People between 100 percent and 138 percent of the federal poverty level (currently $11,170 to $15,415 in annual income for an individual) would instead get the federal subsidies. But most adults below the poverty level would likely remain uninsured. That could amount to 11 million adults, the Urban Institute says.
As congressional and presidential campaigns kick into high gear, both parties are using the court decision to make their case against the other. Democrats point out that Republicans proposing to leave the federal Medicaid money on the table are stranding the poorest of the poor without insurance. Some Republican governors counter that budget-squeezed states can’t afford their share of the cost, and they are vocal in their opposition to complying with the health law in any way.
As part of the law, the federal government will cover the full cost of newly eligible people for the first few years, then scale back until it picks up 90 percent of the cost after 2019. That’s significantly more than the federal government pays for existing Medicaid enrollees.
Florida's governor said in a news release July 1 that Florida will "opt out of spending approximately $1.9 billion more taxpayer dollars required to implement a massive entitlement expansion of the Medicaid program. … The burden increasingly shifts to Florida taxpayers in future years. Medicaid, which has been growing for years at three-and-a-half times as fast as Florida's general revenue, will soon grow even faster under ObamaCare, and education funding will be adversely impaired if we do not control the growth in Medicaid spending."
The partisan rhetoric, though, won’t greatly affect the elections, either at the national or state level, according to Robert Blendon, professor of health policy and political analysis at Harvard. Some of the most vocal opponents of the health law either aren’t up for reelection or are trying to please voters who dislike the health law, he said.
"Core voters for [Texas Republican Gov. Rick Perry] want him to oppose this bill [and] the president is not going to carry Texas. The people who vote against him don’t want the law to go forward," Blendon said.