King v Burwell Ruling

Today the Supreme Court ruled (6-3) that the federal health insurance subsidies shall remain available to individuals in the 37 states using www.healthcare.gov. This decision means that the major coverage provisions of the Affordable Care Act will proceed as planned. 

Here are links to recent headlines and resources on the topic:

• CommonWealth Fund Blog: Coverage and Financial Security Preserved for Millions of Americans in the Supreme Court Ruling for the Government
• Wall Street Journal Blog by Drew Altmann: After King v Burwell Ruling, Health Law Issues Involve Implementation
• Modern Healthcare: Guide to King v. Burwell
• Reuters: Supreme Court upholds key Obamacare insurance subsidies

WSJ: More Health-Care Insurers Seek Big Premium Increases

On Monday the Obama administration published more information about hefty premium increases for 2016 sought by large insurers selling plans under the health law.

An article in the Wall Street Journal by Louise Radnofsky and Stephanie Armour reported major carriers from around the country are proposing big increases in the premium rates paid by consumers who buy insurance policies on their own.

Noted in the article which can be found here: 

Blue Cross and Blue Shield of Illinois is looking to raise rates by averages of 29% or more. In Pennsylvania, Highmark Health Insurance Co. is asking for 30%, according to proposals submitted by insurers for the year ahead. Around the country, some of the main market leaders are looking for double digit increases.

The new requests for premiums come at a time when the political and legal future of the law hangs in the balance. The Supreme Court is set to issue a decision later this month on the validity of the law’s tax credits to offset the cost of premiums for lower-income consumers in most states in the country. 

Kaiser Family Foundation: A Guide to the Supreme Court Argument in King v. Burwell

The Kaiser Family Foundation has released new materials examining the policy implication and legal arguments in the U.S. Supreme Court’s King v. Burwell case.

The Supreme Court is set to hear oral arguments on March 4. A new Policy Insight from the Kaiser Family Foundation's Larry Levitt and Gary Claxton explores the policy implications for consumers and insurance markets if the Court were to side with the plaintiffs in the challenge to the Affordable Care Act’s consumer subsidies. 

A second issue brief by KFF’s MaryBeth Musumeci, a policy analyst and an attorney, explains the legal arguments underlying the case.

At issue in the case is whether the federal government can provide premium and cost-sharing subsidies to consumers who buy insurance in states that do not establish their own ACA Marketplace and instead rely on a Federally-facilitated or Partnership Marketplace. In 2015, roughly 7.5 million people who have signed up for coverage in the 34 states that use the federal Marketplace qualify for subsidies, or 87 percent of all people who picked a plan in such states.

The new Policy Insight, Insurance Markets in a Post-King World, explains that a Court decision to cut off such subsidies would cause millions to go without coverage, make the vast majority of consumers who were receiving subsidies exempt from the ACA’s individual mandate, and disrupt insurance markets by leaving insurers with a sicker pool of people to cover and limited ability to generate enough premium revenue to cover health costs. In some cases, insurers may choose to exit the individual market in affected states rather than face significant losses, according to the analysis. Governors, state legislatures and Congress would face pressure to take steps to preserve subsidies, but there are political and logistical challenges to doing so quickly.

The issue brief, Are Premium Subsidies Available in States with a Federally-run Marketplace? A Guide to the Supreme Court Argument in King v. Burwell, walks through legal aspects of the case, from who the plaintiffs are to what each side is seeking from the Court and how this legal challenge differs from other ACA cases already decided by the Court. It also explains the legal test that the justices are likely to apply in the case and the potential actions the Court could take.

For more on health reform and the King v. Burwell case, visit kff.org.

Is The Affordable Care Act Working?

Brian Klepper

The New York Times has published a major, multi-article piece, on different aspects of the Affordable Care Act's (ACA) performance. Here's the overview:

"After a year fully in place, the Affordable Care Act has largely succeeded in delivering on President Obama’s main promises, an analysis by a team of reporters and data researchers shows. But it has also fallen short in some ways and given rise to a powerful conservative backlash."

House Committee Approves Bill Defining ‘Full Time’ as 40 Hours under PPACA

NBCH thanks the American Benefits Council for the information provided in this post.

The U.S. House of Representatives Ways and Means Committee reported out the Save American Workers Act (H.R. 2575) which changes the Patient Protection and Affordable Care Act (PPACA) definition of a “full-time employee” from 30 to 40 hours, in a February 4 “mark-up” meeting. The committee approved the measure on a party-line vote of 23-14 (with two Democrats absent).

The PPACA "shared responsibility" employer mandate, which has been delayed until 2015, requires employers with 50 or more full-time (or equivalent) employees to offer health coverage that satisfies affordability and minimum value requirements to their full-time employees or pay a penalty if even one full-time employee receives a premium tax credit for health coverage obtained through an insurance exchange. Under PPACA and Internal Revenue Service Notice 2012-58, "full-time employee" is defined generally as a person who works, on average, at least 30 hours per week.

H.R. 2575, introduced by Representative Todd C. Young (R-IN), would replace the number 30 (hours per week) with the number 40 (hours per week) for purposes of identifying full-time employees, and modify the calculation of full-time equivalent workers by requiring employers to divide the aggregate number of hours of service of employees who are not full-time employees by 174 rather than 120. A similar bipartisan measure has been introduced in the Senate as the Forty Hours is Full Time Act (S. 1188).

The substitute amendment offered by Ways and Means Committee Chairman Dave Camp (R-MI) and approved by the committee makes the amendment effective for months beginning after December 31, 2013. In his opening statement, Camp emphasized that the current 30-hour limit for a full-time workweek puts workers at risk of having their hours reduced. “‘Obamacare’ is putting full-time work and the potential to earn more wages out of the reach of millions of Americans already struggling in these tough economic times,” Camp said.

Young also provided anecdotes of workers having their hours cut to below 30 hours so as to avoid fitting the definition of a full-time employee.

During debate, Democrats warned that an increase to 40 hours could put as many as five times more workers at risk to have their hours cut, and maintained that the 30-hour limit is necessary to achieve broader coverage. Republicans argued that the law negatively impacts businesses by restricting economic growth and hurts already marginalized groups and populations who are most likely to have their hours cut. Thomas Barthold, chief of staff of the Joint Committee on Taxation, answered questions from the panel regarding the economic implications of the proposed legislation but said that the majority of data still needs to be processed and analyzed and promised more information in the coming weeks.

A number of lawmakers cited the February 4 Congressional Budget Office (CBO) report on the effects of PPACA on the labor market, which found that full implementation of the law could result in the loss of 2.3 million full-time jobs by 2021, which “includes some people choosing not to work at all and other people choosing to work fewer hours than they would have in the absence of the law.” This conclusion may stem from the possibility that some people, particularly those at the margins of eligibility for premium tax credits, might conclude that it is more advantageous to accept somewhat lower compensation in return for government subsidies that would enable them to purchase coverage through an exchange.

The bill is now clear for consideration by the full House of Representatives, where strong majority support is expected. The Senate bill has been referred to the Senate Finance Committee, which has not taken action on the measure.

Bill Introduced to Shield Health Providers From Lawsuits on Quality Measures

Sens. Pat Toomey and Tom Carper have introduced a bill that’s designed to protect physicians and other providers from new legal liability under federal health care metrics. The lawmakers are concerned that physicians could get sued if they rank low on national quality measures such as the second stage of meaningful use, the Physician Quality Reporting System or the Hospital Readmission Reduction Program under the ACA or other federal law. They hope to include the legislation as an amendment to the Sustainable Growth Rate repeal bill in the Senate Finance Committee.

The Standard of Care Protecting Act would prohibit lawsuits based solely on the metrics, but it would allow the measures to be used as supporting evidence in other litigation. A Toomey aide said physicians and hospitals are concerned about their liability exposure without such protection. A similar bill has been introduced in the House by Reps. Phil Gingrey and Henry Cuellar, with bipartisan support from 14 other cosponsors. It was included in the House Energy and Commerce SGR bill.

NIHCM Data Brief on Trends in Employer-Sponsored Insurance

Recent accounts of employers dropping health coverage, restricting eligibility for spouses, turning to plans with narrower networks and greater cost sharing, and restructuring workforces are often framed as side effects of the ACA. But many of these cost-cutting trends began long before health reform. This data brief from the National Institute of Health Care Management offers a comprehensive look at how employer-sponsored insurance has been changing and how provisions of the ACA and other dynamics might affect this market. Topics include:

• the decline in rates of employers offering health insurance, particularly for smaller firms with lower-wage workers
• projections of the ACA’s impact on employer-sponsored coverage and part-time workers
• the ongoing movement to greater employee cost sharing and shift into high deductible plans
• growing employer reliance on workforce wellness programs and interest in defined contributions and private exchanges
• the emerging focus on promoting value through reference pricing, high performance networks and transparency
• the trend toward self-insurance among smaller firms

ACA-Related Issues in the Fiscal Cliff/Debt Deal

The bill to avoid the fiscal cliff and keep the government funded for a few more months ended up not including several ACA-related provisions that had been under consideration during discussions. Lawmakers had been considering a number of benefits provisions as part of the legislation, either as modest policy concessions or as federal revenue offsets. It appears that most of those provisions are not included in the final package. The measure DOES NOT include the following provisions that had been discussed:

• A delay in the collection of the Transitional Reinsurance Fee – the per-enrollee fee on health insurance issuers and plan administrators (on behalf of self-insured group health plans) which will finance the transitional reinsurance program in 2014 through 2016;
• Delay or repeal of the medical device tax;
• A prohibition on providing members of Congress and their staff subsidies for health coverage that they are required to obtain through insurance exchanges.

The measure DOES include a requirement that HHS certify its ability to verify the incomes of those receiving tax subsidies for the purchase of health insurance on the ACA exchanges.

Also included is an agreement to convene a Senate-House conference on a budget resolution, with a December 13 deadline to reach a final compromise. It is possible that health reform-related provisions could arise in these negotiations, especially if revenue offsets become necessary. NBCH will continue to monitor the situation as it develops and provide information to members as necessary.

Alliance for Health Reform Employer Toolkit

The Alliance for Health Reform has published a new employer toolkit explaining all of the implications of the ACA on employers. The toolkit - a collection of published news stories and other documents - also includes information about the delay in the mandate to 2015, and analysis about its impact on employer-based coverage.

The toolkit includes: 

• Key facts about the employer mandate 
• Data about trends in employment-based health coverage 
• Links to news articles and reports explaining and analyzing the issue 
• Health care experts who understand the issue and its implications, along with contact info 

In 2011, more than 170 million individuals had employment-based health benefits (55.1 percent of the population), but that is down 11.8 million from 2000, when employers covered 65.1 percent of the population. The ACA contains an incentive for employers to offer affordable health benefits. Starting in 2015, employers with more than 50 full-time employees are required to offer health coverage or pay a $2,000 fee per full-time employee, if any employee receives a subsidy through the state insurance exchange. Critics of the employer mandate say that, rather than being an incentive to keep coverage, the policy will instead drive employers to drop coverage and demote full-time workers to part-time. Proponents of the ACA disagree.  

Employers Preparing Now for Cadillac Tax in 2018

The Commonwealth Fund reports on recent trends among employers to start trimming back benefits now in preparation for the Cadillac Tax hitting "high cost plans" in 2018. As employees at many private companies prepare for the open enrollment season, some will find out soon about decisions their employers have made about benefits in order to escape a tax on expensive health care coverage that hits in 2018.

The tax imposes a 40 percent excise tax beginning in 2018 on the cost of coverage for health plans that goes above limits of $10,200 for individual coverage and $27,500 for self and spouse or family coverage that year.  Nearly a third of all big employers say they are taking steps in 2014 to avoid the tax in 2018, according to a survey released earlier this week by the Mercer consulting firm.

Mercer estimates that about 40 percent of companies would have to pay the tax on at least one plan if they did not change the current benefit design. Mercer's figures are the partial findings of a survey of 2,800 large employers across the nation, with about 2,000 responses so far. The full survey will be released later.

NBCH member coalition, The Alliance in Madison, Wisconsin, has developed a Cadillac tax estimate calculator for employers.  You can find the calculator on the newly-launched NBCH ACA Calculators and Resources webpage.

Three Critical Measures of Exchanges' Impact Could Take Several Years to Assess

Amid all of the sound bite media coverage surrounding the opening of exchanges on October 1, Kaiser Health News urges stakeholders not to jump to conclusions based on the first few days, or even months, of the new health insurance exchanges created by the Affordable Care Act. While people can enroll for insurance until the end of March, real assessments of these exchanges will most likely take years. Three issues - enrollment, "benefit shock," and future premiums - are what will determine whether the exchanges are working as intended. And we won't know the impact of how these three issues are addressed until 2016 or even later.

OPM Confirms Blue Cross Blue Shield Will Offer Multi-State Plans

The Office of Personnel Management (OPM) has released details about the multi-state plans that will be offered on the exchanges of 30 states and the District of Columbia. The Blue Cross Blue Shield Association, a non-profit confederation of regional Blues plans, signed a contract this month with OPM to offer the plans, which are supposed to expand to all 50 states in the next four years under the health care law. Blue Cross already operate plans in all 50 states.

The plans were meant to drive competition on the exchanges, but many experts have been skeptical that they will be much more than a rebranded clone of plans already offered in the same markets. The reason is that it’s difficult for insurers to build provider networks and market themselves in areas where they aren’t already offering coverage.

Alissa Fox, vice president of policy at BCBSA, said that 2014 will be a “phase-in year” for multi-state plans, but that already they “are offering a wider range of networks” than other plans on the exchanges. In a fact sheet posted today, OPM said that multi-state plans are increasing consumer options. Without those plans, consumers would have access to just one type of plan in Alaska, New Hampshire, and West Virginia.

Study: Employer Mandate Will Have Little Effect on Overall ACA Implementation

According to a new RAND Corporation study, the one-year delay to the health law’s employer mandate will have little effect on the ultimate results of the Affordable Care Act. Less than one percent of large firms will not offer health insurance in 2014 as a result of the delay. But the delay will set the federal government back $11 billion — missed revenue from penalties and fines large employers would have had to pay next year. The study shows the delay will have a minimal impact largely because over 95 percent of firms with more than 50 employees already offer employer-sponsored health insurance plans.

Helpful Health Reform Implementation Timeline for Employers

Entrepreneur Magazine has published a useful, yet brief article outlining the specific steps employers should take leading up to 2015 when the employer shared responsibility provisions take place.  Several recommended steps from Fall 2013 through Summer 2014 are described, including surveying employees and devising a strategy for part-timers.  The article also mentions when and how to consider private exchanges in an overall benefits strategy.  Coalitions and their employer members may find this an helpful resource to guide decision making as the full implementation of the ACA rolls out over the next year.

The Affordable Care Act 101 with SBA & Small Business Majority

As part of a robust education and outreach effort, the Small Business Administration and Small Business Majority are launching the Affordable Care Act 101 weekly webinar series. Small business owners can learn the basics of the Affordable Care Act and what it means for their company and employees, including insurance reforms, the small business health care tax credit, the new health insurance marketplaces, and employer shared responsibility provisions. Each week, SBA representatives will walk through the key pieces of the law so that small business owners can understand the facts and make the best, informed decisions they can about providing health insurance for their employees.

The Affordable Care Act 101 will take place every Thursday from now through the opening of the marketplaces in October. Below are the registration links for the next four presentations. Registration for later webinars will be available shortly.

• Thursday, July 25 at 12:00 PM ET: Click to Register
• Thursday, August 1 at 2:00 PM ET: Click to Register
• Thursday, August 8 at 2:00 PM ET: Click to Register
• Thursday, August 15 at 2:00 PM ET: Click to Register

New Actuaries' Report: Financial Reporting Implications Under the Affordable Care Act

The American Academy of Actuaries has released a new White Paper on the Financial Reporting Implications Under the Affordable Care Act. The paper was developed to provide information to companies on how various reporting provisions in the Affordable Care Act (ACA) may create volatility with regard to future financial statements.

The paper addresses the following topics:

• The impact of the ACA’s premium stabilization programs (risk adjustment, reinsurance, and risk corridors) on financial statements;

• The effect of new taxes and fees established by the ACA, with an emphasis on the Health Insurance Providers Fee and the per-capita reinsurance contributions used to procure funding for the transitional reinsurance program;

• The possible issues related to the new ACA programs in which the government makes advanced payments to issuers that may require subsequent adjustment; and

• The potential ways in which the 2014 market reforms may affect the existing categories of actuarial estimates found on issuers’ balance sheets.

Final wellness programs rule published

Yesterday HHS and the Department of Labor and the Department of Treasury published the long awaited final rule of requirements for workplace wellness programs, allowing employers to require healthy efforts from employees to qualify for lower premiums.

The final regulations, consistent with the Affordable Care Act, focus on nondiscriminatory wellness programs in group health coverage. Specifically, these final regulations increase the maximum permissible reward under a health-contingent wellness program offered in connection with a group health plan (and any related health insurance coverage) from 20 percent to 30 percent of the cost of coverage. The final regulations further increase the maximum permissible reward to 50 percent for wellness programs designed to prevent or reduce tobacco use. These regulations also include other clarifications regarding the reasonable design of health-contingent wellness programs and the reasonable alternatives they must offer in order to avoid prohibited discrimination.

The rule will apply to large employer-sponsored coverage starting next year and most businesses should not have to make more than minor tweaks to existing wellness programs to comply with the new rules.

State Governments Mulling Options to Move Part-Time Employees to Exchanges

According to the Washington Post, Washington state may be among the first states in the country to explore a proposal that would shift some government workers out of their current health plans and onto the insurance exchange developed under President Barack Obama’s health care law. State lawmakers believe the change, which could affect thousands of part-time state employees and education workers, would save the state $120 million over the next two years. It would consequently push more health care costs onto the federal government because many of these lower-income workers would likely qualify for federal subsidies.

Washington state appears to be the first major government to seriously explore the possibility of pushing public employees into the exchange, but it probably won’t be the last. Virginia, for example, is requiring all part-time employees to work fewer than 30 hours, which will help the state avoid penalties for not providing health coverage. Florida is facing a potential $300 million penalty for not covering workers who are on duty 30 to 39 hours a week, so it’s moving to extend coverage to those employees.

Washington state is in a less common situation because it already provides coverage for part-timers down to 20 hours a week. The Washington state proposal has been advanced as a way to help deal with a $1.2 billion state budget shortfall. Under it, the state would make policy changes and secure agreements in which staffers who work between 20 and 30 hours a week would get extra compensation but lose their current health coverage. They would then be eligible to get health care in the federal plan, without any consequence for the state.

Health Care in President Obama's 2014 Budget Proposal

On April 10, President Obama released his proposed budget for Fiscal Year 2014. The release of the President's Budget (usually occurring in early February) is mostly a symbolic measure. Congress is not required to act on any of the proposals, and most observers agree that the partisan deadlock between the Republican-controlled House and Democratic-controlled Senate will continue, and little, if anything, is likely to be enacted out of the President's proposal.

However, the Budget does represent the Administration's policy priorities, and with major provisions of Affordable Care Act set to be implemented in 2014, there are a lot of health care-related proposals. Among the highlights are:

• An additional $800 million for CMS’s insurance exchange operations, along with an additional 280 employees to work on exchange implementation.
• Cuts to Medicare — more than $300 billion in provider payments and $50 billion from seniors, mostly in the form of increased cost sharing for higher-income beneficiaries.
• A proposal to close the Medicare prescription drug doughnut hole by 2015 — a full five years ahead of the ACA’s target date of 2020.
• Expanding and simplifying the tax credits provided to small businesses for their non-elective contributions to employee health insurance. The expansion would cost $720 million in 2014. 
• $18.4 million for CMS to ensure compliance with MLR and rate-review processes.
• Instead of the SGR formula or a specific SGR "fix," the budget calls for a “period of payment stability lasting several years” to allow the development of “accountable payment models.”
• A one-year delay of the ACA’s scheduled reductions in Disproportionate Share Hospital (DSH) payments to safety-net hospitals; the reductions are scheduled to go into effect in 2014, but the White House wants to wait a year to get a better sense of how much the law reduces the number of uninsured now that Medicaid expansion is optional for states.
• Inclusion of a MedPAC recommendation to cut Graduate Medical Education payments to hospitals by $11 billion over 10 years.
• Elimination of the Preventive Health and Health Services Block Grant program, administered by the CDC. The program funds a variety of state efforts, including emergency medical services, home health services, and fluoridation. It is not the same thing as the Prevention and Public Health Fund in the ACA.

Again, this is the President's proposed budget for Fiscal Year 2014; none of these changes or funding levels are in place, and likely may never happen. NBCH continues to monitor the federal budget process and proposals from Congress, and will keep members informed if any significant health-related budget changes are enacted.

The Affordable Care Act Turns Three

Saturday,  March 23, 2013 marks the passage of three years since President Obama signed the Affordable Care Act (ACA) into law.  Much work has been done to implement the various provisions of the law, and progress is being made toward achieving the overall goal of increasing access to coverage for many Americans.  But much work is yet to be done, especially during this year as we ramp up to January 1, 2014 when the ACA insurance exchanges are due to go live.

As you may have seen in recent weeks, there have been a few new surveys showing that Americans still are not familiar with the various aspects of the law.  All health care stakeholders have a role to play in educating and raising awareness about what the law will (and will not) do.  As you celebrate the ACA's birthday, take some time out of your busy day to take the Kaiser Family Foundation's health reform quiz - 10 questions to test your own  knowledge about the myths and facts of the ACA!