On November 15, 2013, the House of Representatives voted 261 to 157 to approve H.R. 3350, the “Keep Your Health Plan Act,” which would allow health plans available on the individual market as of January 1, 2013 to continue in 2014 without meeting new ACA plan standards. Continued enrollment in such a grandfathered policy would be considered to satisfy the ACA’s minimum essential coverage requirement, exempting the enrollee from the “shared responsibility” penalty under the ACA. . The Obama Administration has stated that the president would veto H.R. 3350 because it “rolls back the progress made by allowing insurers to continue to sell new plans that deploy practices such as not offering coverage for people with pre-existing conditions, charging women more than men, and continuing yearly caps on the amount of care that enrollees receive.” As previously reported, the Obama Administration has announced an alternative transition policy that would allow insurance issuers, subject to state insurance commissioners’ approval, to continue coverage that would otherwise be terminated or cancelled, and affected individuals and small businesses may choose to re-enroll in such coverage if the coverage was in effect on October 1, 2013 and the insurer meets certain conditions.
Congressional Panels Continue Focus on ACA Insurance Enrollment, Security, and Cost Issues, and Other Health Policy Topics
Congress continues to examine issues associated with enrollment in qualified health plans under Healthcare.gov. For instance:
- The House Science, Space, and Technology Committee held a hearing entitled “Is My Data on Healthcare.gov Secure?” (see).
- The Senate Small Business and Entrepreneurship Committee focused on “Affordable Care Act Implementation: Examining How to Achieve a Successful Rollout of the Small Business Exchanges”; and
- The House Oversight and Government Reform Committee has held hearings entitled “ObamaCare Implementation: Sticker Shock of Increased Premiums for Healthcare Coverage,” and “ObamaCare Implementation: High Costs, Few Choices for Rural America,” while on December 6 the panel has scheduled a hearing entitled “ObamaCare Implementation, The Broken Promise: If You Like Your Current Plan You Can Keep It.”
In other policy areas, the Senate Special Committee on Aging has scheduled a December 11 hearing on “Protecting Seniors From Medication Labeling Mistakes,” along with a December 18 hearing entitled “The Future of Long-Term Care Policy: Continuing the Conversation.” In addition, on November 20, the House Energy and Commerce Subcommittee on Health held a hearing on public health legislation. Specifically, the Subcommittee is considering the following bills: H.R.610, to provide for the establishment of the Tick-Borne Diseases Advisory Committee; H.R.669, to enhance awareness about unexpected sudden death in early life; H.R. 1098, to reauthorize certain traumatic brain injury and trauma research programs; H.R.2703, to provide liability protections for volunteer practitioners at community health centers; H.R.1281, to reauthorize newborn screening programs; draft legislation to reauthorize the poison center national toll-free number, national media campaign, and grant program; and draft legislation to reauthorize a controlled substance monitoring program.
On November 19, 2013, CMS published a notice seeking comments on its proposed Quality Rating System (QRS) framework for rating Qualified Health Plans (QHPs) offered through an ACA Affordable Insurance Exchange. Specifically, CMS lists proposed QRS quality measures that QHP issuers would be required to collect and report, and describes the hierarchical structure of the measure sets and elements of the QRS rating methodology. In addition, the notice solicits comments on how to ensure the integrity of QRS ratings, along with priority areas for future QRS measure enhancement and development. CMS will accept comments on the QRS framework until January 21, 2014.
President Obama announced on November 14, 2013 that HHS has adopted an administrative policy to allow insurers to continue to offer certain health insurance policies scheduled to be cancelled effective January 1, 2014 because of more stringent coverage requirements under the ACA. In short, under the“transitional” policy outlined in a letter to state insurance commissioners, health insurance issuers may choose to continue coverage that would otherwise be terminated or cancelled, and affected individuals and small businesses may choose to re-enroll in such coverage if the coverage was in effect on October 1, 2013 and the insurer meets certain conditions, including notification to the affected insureds regarding: (1) any changes in the options that are available to them; (2) which of the specified market reforms would not be reflected in any coverage that continues; (3) their potential right to enroll in a qualified health plan offered through a Health Insurance Marketplace and possibly qualify for financial assistance; (4) how to access such coverage through a Marketplace; and (5) their right to enroll in health insurance coverage outside of a Marketplace that complies with the specified market reforms. State agencies responsible for enforcing the specific market reforms are “encouraged to adopt the same transitional policy.” The letter notes the risk corridor program should help ameliorate unanticipated changes in premium revenue for health insurers, although the Administration will consider additional regulatory changes to provide additional assistance. The policy applies to health insurance coverage that is renewed for a policy year starting between January 1, 2014, and October 1, 2014, but the Administration has left open the possibility of extending the transition policy. Despite this announcement, House Speaker John Boehner has indicated that the House will proceed with its scheduled vote tomorrow on H.R. 3350, the “Keep Your Health Plan Act.”
On November 13, 2013, HHS issued its first report on ACA Health Insurance Marketplace/Exchange enrollment statistics. According to the Administration, 106,185 individuals have selected health plans during the first 33 days of the open enrollment period (October 1 through November 2, 2013), although this figure also includes individuals who have not yet purchased a policy and who are technically not yet enrolled in a plan. Note that the majority of the individuals who have selected a plan – almost 75% -- have gone through a state-based marketplace, with fewer than 27,000 individuals selecting a plan through the federally-facilitated marketplace (where HHS is running the marketplace alone or in partnership with the state). State numbers vary significantly, with 35,364 individuals in California selecting a plan through the state-run marketplace (about a third of all insurance selections nationwide for the period), compared to only 42 North Dakota residents selecting a plan through the federal marketplace. An additional 396,261 individuals nationwide have been assessed to be eligible for Medicaid or CHIP, representing 26% of the total applicants for coverage through the marketplaces. HHS also reports high volumes of traffic on marketplace websites and call centers, with almost 25 million unique visitors on marketplace websites and more than 3.1 million calls to state and federal marketplace call centers.
The House of Representatives is scheduled to take up legislation on November 15, 2013 that responds to growing attention to policy cancellations in the individual health insurance market linked to more stringent coverage requirements going into effect in 2014 under the ACA. Specifically, the House will consider H.R. 3350, the “Keep Your Health Plan Act,” which would allow health plans available on the individual market as of January 1, 2013 to continue in 2014 without meeting new plan standards. Continued enrollment in such a grandfathered policy would be considered to satisfy the ACA’s minimum essential coverage requirement, exempting the enrollee from the “shared responsibility” penalty under the ACA.
11/15 update: The House has approved H.R. 3350 by a vote of 261 to 157.
Congressional committees continue to focus on the experience of consumers and insurers since the HealthCare.gov insurance portal launched on October 1, along with potential issues related to the security of personal data transmitted through the site. For instance, House hearings this week include an Oversight and Government Reform Committee hearing on “ObamaCare Implementation: The Rollout of HealthCare.gov”; a Homeland Security Committee on “Cyber Side-Effects: How Secure is the Personal Information Entered into the Flawed Healthcare.gov?"; and an Energy and Commerce Committee hearing titled “Obamacare Implementation Problems: More than Just a Broken Website.” Next week, the Energy and Commerce Committee also will examine the security of the HealthCare.gov site.
In other policy areas, on November 14, the House Small Business Committee is holding a hearing on “Self-Insurance and Health Benefits: An Affordable Option for Small Business.” On November 15, the Energy and Commerce Subcommittee on Health will review the FDA’s implementation of the Food and Drug Administration Safety and Innovation Act, and on November 19 the panel will focus on federal regulation of mobile medical apps and other health software.
HHS has corrected technical and typographical errors in the March 11, 2013 HHS final rule establishing ACA health insurance benefit and payment parameters for 2014. The correcting amendment is effective November 6, 2013.
Under the “Sunshine Act” provisions of the Affordable Care Act, certain manufacturers of drugs, devices, biologicals, and medical supplies covered by Medicare, Medicaid and CHIP must report annually to the Department of Health and Human Services (HHS) certain payments or transfers of value they have made to physicians and teaching hospitals. CMS has announced that Sunshine Act reporting thresholds are being adjusted slightly for 2014 to reflect changes in the consumer price index. Specifically, a payment or other transfer of value is excluded from reporting requirements for 2014 if it is less than $10.18 (compared to $10.00 for 2013), unless the aggregate amount transferred to, requested by, or designated on behalf of a covered recipient exceeds $101.75 in a calendar year (up slightly from $100.00 for 2013).
Obama Administration Aligns Health Exchange Enrollment Deadline and "Shared Responsibility" Penalty Trigger
CMS recently issued guidance to ensure that individuals who purchase insurance through the ACA Marketplace/Insurance Exchange near the end of the initial open enrollment period are not subject to a penalty for a break in insurance coverage. By way of background, beginning in 2014, the ACA requires every individual to maintain health coverage (known as minimum essential coverage), qualify for an exemption from the requirement to maintain minimum essential coverage (including an exemption for gaps in coverage of less than 3 months), or make a shared responsibility payment when filing a federal income tax return. For 2014, the shared responsibility payment/penalty equals the greater of 1% of annual income or $95 per person.
The initial open enrollment period in the Health Insurance Marketplace runs through March 31, 2014. Under the insurance enrollment rules, however, an individual who enrolls between February 16, 2014 and March 31, 2014 would have coverage effective as of April 1 or later – which could result in a break in coverage of 3 or more months and trigger the penalty if the individual does not qualify for another exemption. In guidance issued on October 28, 2013, CMS states that “HHS has determined that it would be unfair to require individuals in this situation to make a payment.” Consequently, HHS is establishing a “hardship exemption” from the shared responsibility payment if an individual enrolls in a plan through the Marketplace prior to the close of the initial open enrollment period. Additional detail will be provided in 2014 on how to claim this exemption.
Several House committees have held hearings to grill HHS officials and their contractors on various problems consumers and insurers have encountered during the first month of the HealthCare.gov insurance portal’s operation. On October 24, the House Energy and Commerce Committee held a hearing entitled on "PPACA (Patient Protection and Affordable Care Act) Implementation Failures: Didn't Know or Didn't Disclose?," followed by an October 30 hearing on “PPACA Implementation Failures: Answers from HHS” featuring HHS Secretary Kathleen Sebelius. In addition, on October 29, the House Ways and Means Committee held a hearing on the status of ACA implementation, at which CMS Administrator Marilyn Tavenner testified about steps the agency is taking to improve service. On the Senate side, the Health, Education, Labor and Pensions (HELP) Committee has announced that CMS Administrator Tavenner is scheduled to testify at a November 5 Committee hearing on “The Online Federal Health Insurance Marketplace: Enrollment Challenges and the Path Forward." Likewise, a November 6 Senate Finance Committee hearing on “Health Insurance Exchanges: An Update from the Administration” will include testimony from Secretary Sebelius.
Separately, the House Small Business Committee held a hearing earlier this month on the potential effects of the ACA’s definition of 30 hours a week as full-time employment on employment at small businesses.
On October 30, 2013, CMS published a final rule that sets forth financial integrity and oversight standards for participants in Affordable Care Act (ACA) Insurance Exchanges/Marketplaces. According to a CMS press release, these policies largely are unchanged from previous proposed rules and guidance documents. Among other things, the rule addresses: oversight of state-operated risk adjustment and reinsurance programs; oversight of advanced payments of the premium tax credit and cost-sharing reductions; monitoring standards related to various Marketplace activities; approval of vendors to administer enrollee satisfaction surveys; and amendments to definitions and standards related to market reform rules. The rule also amends and finalizes certain interim provisions set forth in a March 11, 2013 interim final rule regarding risk corridors and cost-sharing reduction reconciliation.
The Patient-Centered Outcomes Research Institute (PCORI) was established by the ACA to support federal comparative effectiveness research efforts. Due to the resignation of a physician representative on the board, letters of nomination to fill the vacancy will be accepted through November 15, 2013.
On October 1, 2013, the Affordable Care Act’s (ACA) long-awaited Health Insurance Marketplace was launched at www.healthcare.gov. As has been widely reported, many consumers experienced technical problems using the federal site to enroll in qualified health plans, which the Administration has largely chalked up to greater-than-expected demand and site capacity issues that are being addressed on an ongoing basis. On the other hand, critics including Republican lawmakers have argued that the Marketplace site’s glitches indicate the deeper problems with the enrollment system that should have been anticipated (and which they contend lend support to continued efforts to delay or repeal the ACA). The White House has confirmed that individuals are signing up through federal exchanges, but the Administration is not releasing enrollment statistics at this time, choosing instead to release enrollment data on a regular monthly basis starting in November. The Administration also has stressed that consumers have until December 15, 2013 to apply for coverage that starts January 1, 2014, and enrollment in the Marketplace is open until March 31, 2014. In a related development, the Centers for Medicare & Medicaid Services (CMS) has announced that while small businesses may view available plans being offered through the federally-facilitated Small Business Health Option Program (SHOP) Marketplace as of October 1, 2013, all functions (including enrollment) will not be available until November. Enrollment experiences at state Marketplaces reportedly vary, with some states such as California and New York announcing success in enrolling thousands of consumers, while other states reportedly are encountering technical problems that have hindered enrollment.
On September 25, 2013, HHS published a proposed rule that would establish the Basic Health Program, as required by section 1331 of the ACA. The Basic Health Program would provide states with the flexibility to establish a health benefits coverage program for low-income individuals who would otherwise be eligible to purchase coverage through the state’s Affordable Insurance Exchange/Health Insurance Marketplace). According to HHS, the Basic Health Program would complement and coordinate with enrollment in a qualified health plan through the Exchange, as well as with enrollment in Medicaid and CHIP. The proposed rule establishes the framework for Basic Health Program eligibility and enrollment, benefits, delivery of health care services, transfer of funds to participating states, and federal oversight. Comments on the proposal will be accepted until November 25, 2013.
On September 23, 2013, CMS published a proposed rule that would establish the methodology and payment rates for the new Medicare Federally Qualified Health Center (FQHC) PPS, as mandated by the ACA. Under the proposed rule, FQHCs would be paid a single encounter-based per diem rate per Medicare beneficiary, which currently is estimated to be $155.90. This amount would be subject to a geographic adjustment factor GAF to reflect geographic differences in costs. In addition, the per diem rate would be increased by approximately 33% when an FQHC furnishes care to a patient that is new to the FQHC or to a beneficiary receiving a comprehensive initial Medicare visit. CMS seeks comments on other potential adjustment factors it considered but is not proposing, including adjustments for preventive care encounters. The FQHC PPS would be effective for cost reporting periods beginning on or after October 1, 2014. The rule also would allow rural health clinics (RHCs) to contract with nonphysician practitioners when statutory requirements for employment of nurse practitioners and physician assistants are met, and make other technical and conforming changes to the RHC and FQHC regulations. Finally, the rule would amend the Clinical Laboratory Improvement Amendments (CLIA) of 1988 with regarding to enforcement actions for proficiency testing referral, in conformance with the Taking Essential Steps for Testing (TEST) Act of 2012. CMS will accept comments on the proposed rule until November 18, 2013.
The OIG has issued a consumer alert warning consumers about potential fraud related to enrollment in ACA Health Insurance Marketplaces. Among other things, the OIG cautions individuals about people asking for money to enroll the individual in the Marketplace or “Obamacare”; high-pressure solicitations; or requests for personal information. Likewise, HHS, the Department of Justice, and the Federal Trade Commission have launched an interagency initiative to prevent and, as necessary, prosecute consumer fraud and privacy violations in the ACA Marketplace.
CMS has finalized its financial integrity and oversight standards for ACA Affordable Insurance Exchanges (also called “Health Insurance Marketplaces”). Among other things, the rule establishes standards for: verification of eligibility for minimum essential coverage; eligibility appeals; consumer protections with regard to privacy and security; the roles of agents and brokers; methods of premium payment; and standards for state Exchange and Small Business Health Options Program (SHOP) operations. CMS notes that the final rule, published on August 30, 2013, generally finalizes proposed policies set forth in the June 19, 2013 proposed rule without change. The rule is effective September 30, 2013. A fact sheet on the rule is available here.
On September 12, 2013, the House of Representatives approved H.R. 2775, the “No Subsidies Without Verification Act,” on a vote of 235 to 191. The bill would prevent ACA health insurance premium tax credits or cost-sharing reductions from being provided until the HHS OIG certifies that an effective program is in place to verify applicant income and coverage qualifications for these subsidies. While supporters maintain that the bill is needed because the Administration’s planned self-attestation and audit framework could allow fraudulent subsidy payments, the Administration strongly opposes the bill on grounds it would create unnecessary delays in obtaining affordable coverage and is unnecessary in light of the HHS verification system. The bill is unlikely to be considered by the Senate.