The Senate confirmed Sylvia Burwell as the new Secretary of Health and Human Services (HHS) on June 5, and she was sworn in on Monday. Also this week, the Centers for Medicare and Medicaid Services (CMS) announced that 18 of the states using the federal exchange for their small business health options program (SHOP) will be permitted to delay the employee choice requirement until after 2016.
ON THE HILL
Sylvia Burwell was confirmed by the Senate as the new Secretary of Health and Human Services on June 5. The vote was 78-17 in favor of her confirmation. Senate Minority Leader Mitch McConnell (R-Ky.) opposed Burwell’s confirmation because “her embrace of Obamacare calls her policy judgment into question.” She was sworn in on June 9.
On June 6, Senator Al Franken (D-Minn.) introduced a bill that would amend the Affordable Care Act (ACA) so that a family becomes eligible for premium subsidies if its employer-offered family coverage is unaffordable, eliminating what has been termed the “family glitch.” The ACA requires that health coverage be “affordable,” but currently, only the cost of an employee’s individual coverage, not family coverage, determines whether a health plan is affordable. Sen. Franken was joined by 18 other senators in introducing the “Family Coverage Act.”
The non-partisan Congressional Budget Office (CBO) released a projection on June 5 predicting that only 4 million of the estimated 30 million people without health insurance in 2016 would pay penalties for not having health coverage. In 2012, the CBO estimated that 6 million people would pay the penalties. CBO revised its estimate this year based on new exemptions CMS is granting for the ACA individual mandate.
AT THE AGENCIES
On June 10, CMS announced that 18 of the states using the federal exchange for their small business health options program (SHOP) have been given approval to delay the employee choice requirement until after 2015. Employee choice allows employees of small businesses to choose from a variety of health plans offered in a SHOP exchange. A total of 14 states did not ask to delay the requirement. Employee choice will be a requirement in all SHOP exchanges in 2016.
On June 3, HHS announced that up to $300 million in grants will be available to community health centers to increase access to comprehensive primary health care services for underserved populations. The funds, which are available under the ACA, can be used to expand service hours, increase numbers of medical providers, increase availability of medical services, and provide oral, behavioral health, pharmacy and vision services. Applicants have until July 1, 2014 to apply for the funds.
On June 10, CMS announced that up to $60 million in grant funds will be available to support exchange “navigators” providing enrollment assistance to individuals in both the federal and state exchanges. Applications are due on July 10.
On June 2, CMS released a report that showed wide discrepancies in Medicare prices by type of provider. CMS found large variations in service cost, both across the nation and within the same geographic area. For example, a Newark, N.J., hospital charged about $33,000 for heart failure treatment, while another hospital in the city charged $142,000 for the same treatment. CMS is also making the data — which includes 2012 payment information for the 100 most common Medicare procedures provided at 3,000 hospitals and the 30 most common outpatient services — available to researchers.
CMS released Medicaid and Children’s Health Insurance Program (CHIP) numbers on June 4, which indicate that 1.1 million people signed up in April alone. The data release also illustrates that the states that opted for Medicaid expansion are seeing substantially higher coverage gains than those states that did not. Nine states reported that their Medicaid enrollment increased by 25 percent. Six million people have enrolled in Medicaid or the Children’s Health Insurance Program between the start of ACA enrollment and May 1.
Approximately 2 million individuals who signed up for health coverage on Healthcare.gov had issues with certain types of personal information that they included in their applications and have been asked by CMS to provide additional documentation to the agency. CMS said that for the most part, the discrepancies will not affect eligibility for coverage through the exchanges or amounts of premium subsidies received. However, some of these individuals may lose their coverage or be required to repay premium subsidies.
IN THE STATES
The showdown between Republicans and Democrats in Virginia regarding potential expansion of the state’s Medicaid program appears to be over. The June 9 resignation of one of the state’s Senate Democratic members resulted in Republicans gaining a majority in the chamber. As a result, the state Senate is expected to hold a vote on June 12 on a version of the state’s budget that does not provide funds for a Medicaid expansion.
A June 6 article by Capital New York reports that New York state’s approved $8 billion Medicaid waiver plan comes with some restrictions. According to the article, there is a burdensome aspect of the waiver “deal” that will require Medicaid providers and facilities, including public hospitals, to reduce their Medicaid in-patient hospitalizations by 25 percent over the next five years. It may also be difficult for New York state to come up with $8 billion in matching funds to receive the federal $8 billion grant, as required by the Medicaid waiver plan.
In Maryland, a handful of insurance companies announced significant rate changes for their individual market plans through the Maryland exchange for 2015. CareFirst BlueChoice said it would raise its rates by 22.8 percent and CareFirst of Maryland wants to raise its rate by 30.2 percent. Kaiser Foundation Plan and Evergreen Health plan are proposing to decrease their rates by 12.1 and 10.3 respectively. Maryland Insurance Commissioner, Therese Goldsmith, will have to approve of the rate changes.
In Pennsylvania, three Republican lawmakers have joined with Democrats in support of a bill that would expand Medicaid in the state in a plan that differs from the proposal of Governor Tom Corbett. Governor Corbett is currently negotiating with CMS over his own Medicaid expansion proposal, Healthy PA.
THIRD PARTIES
A report from Health Affairs reveals that “safety-net hospitals,” which provide services to a significant number of low-income patients, may see a shortfall of disproportionate-share payments (DSH) from Medicaid. The report by the UCLA Center for Health Policy Research and the Virginia Commonwealth University predicts that hospitals in California, for example, would have to cover $1.38 to $1.54 billion in DSH costs in 2019. Pending DSH payment cuts come from provisions in the Affordable Care Act (ACA), whose authors assumed that as more patients gained access to health care through the exchanges, the need for Medicaid DSH payments would decrease. This report found that the expected increase in revenue for public hospitals due to an increase in patients with new ACA-exchange health plans may not materialize.
The Health Data Consortium held its annual “Health Datapalooza” event last week. This event is a national conference that hosts various stakeholders involved in health data including government agencies, private companies and academics. Among others, outgoing Secretary of Health and Human Services Kathleen Sebelius, and Jeremy Hunt, Secretary of State for Health in the United Kingdom, were keynote speakers. The main focus of the event is a national competition for the most innovative health data applications and products. This year’s winners were the creators of the “Smart Health Hero” app that helps to track what a patient is being charged by his or her provider for services given.
A survey released by Deloitte last week shows that young ACA enrollees based their enrollment decision on affordability rather than the perceived value of the plans they purchased. The survey also indicated that many young people are still unaware of the variety of health coverage options available to them. Of the 70 percent of survey respondents who were unaware of the exchanges, 47 percent were unaware of Medicaid, and 45 percent did not know they could stay on their parents’ plans until the age of 26.
A study published in Health Affairs and conducted by researchers at the Dartmouth Institute for Health Policy & Clinical Practice found that 51 percent of accountable care organizations (ACOs) were led by physicians and 33 percent were jointly led by both physicians and hospitals. In nearly 80 percent of ACOs, physicians made up the majority of the ACOs’ governing boards.
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