By John Reichard, CQ HealthBeat Editor

October 8, 2013 -- A constant thread through analysts' comments about the early interest in health insurance exchanges is that there are many more shoppers than anyone expected. Does that mean many young and healthy people are shopping? Insurance industry sources aren't embracing that theory yet. And a definitive answer probably won't come before January, they add.

Some in the industry are skeptical that the figures on visits to insurance exchange websites are a true reflection of the level of interest. For example, when the administration estimated last week that there have been 7 million unique visits to healthcare.gov, consultant Robert Laszewski said any claim that seven million people have visited "is not taken seriously" in the industry.

And there is "no way to know how many are healthy." Laszewski added.

"I think that those who are claiming that the number indicates an early success of the program are fully of sound and fury indicating nothing," added a managed care industry executive who requested anonymity in order to speak more freely.

The figure "is not a number that indicates anything reliable because it includes duplicate log-ins, people who lost connectivity, curiosity seekers, and the media," the executive said. "Regarding the ages of those who eventually enroll, it will probably take until January of 2014 until anyone gets a sense of the demographics."

Laszewski likewise advanced the view that the totals are heavily inflated by multiple visits by the same people. But that's strongly disputed by Health and Human Services officials who suggest that the actual number of different people coming to healthcare.gov is close to the number of unique visits—and certainly not something far less.

However, consultant John Gorman of the Gorman Health Group said last week that there likely are many young and healthy Americans looking over the new marketplaces.

"I'm sure there's plenty of them among those eight million unique visitors," he said. "The question is how many of them are among the completed and effective applications. We're not going to know that for weeks, possibly months."

Gorman points to surveys showing that as many two-thirds of the so-called young invincibles "are going to really look at it. Interestingly, a huge impact on that segment is going to come between Thanksgiving and Christmas literally from their parents nagging them when they go home for the holidays."

Gorman added that "I'm not as pessimistic as many others are out there that these folks will get frustrated and won't come back. These are not people shopping for a plane ticket or a big screen TV. This is health insurance. They will come back."

By John Reichard, CQ HealthBeat Editor

October 11, 2013 -- A debt ceiling deal may be in the works but it isn't done yet, and any agreement may not last long. What would happen to Medicare and Medicaid if lawmakers don't increase the nation's borrowing power?

Judging from a Senate Finance Committee hearing this week, the answer is likely a big interruption in cash flow and sharply lower rates of payment.

The federal government "has numerous large payments that are due shortly after Oct. 17, when we will have exhausted our borrowing authority and will only have cash on hand to meet our obligations," Treasury Secretary Jacob J. Lew recently testified. In the last two weeks of October, "we have large payments to Medicare providers, Social Security beneficiaries, and veterans, as well as salaries for active duty members of the military." These could be delayed, he said.

"Doctors receiving reimbursements under Medicare would likely continue to provide services on a timely basis, but they would be operating with significant uncertainty about when they would be paid by the government for their services," he said.

"For millions of low-income Americans who rely on Medicaid for their health care, the federal government's payments to states for the federal contribution would likely also be impacted. These providers still have to pay their doctors, nurses, and staff. But absent timely federal payments, many could face real liquidity challenges."

Medicare beneficiaries could be hard hit in other ways, through delayed payments of Social Security checks and shrinking 401(k)s leaving them less able to pay for basic needs.

"For those waiting on benefits who need those funds to in order to refill their refrigerator, if that money doesn't flow, they won't go to that grocery store to shop."

Lew noted that during the 2008 financial crisis retirements assets shrank. "Now if you create a crisis that causes assets to shrink in value, for retirees, they don't have a lot of time to catch up."

Lew did not dispute an assessment by the panel's chairman Sen. Max Baucus, D-Mont., that payments by Medicare and other federal programs could fall to 70 to 80 percent of their current rates.

Lew rejected the idea advanced by some GOP lawmakers that the impact of failing to raise the debt ceiling could be reduced by paying some creditors and delaying payments to others.

"How can the United States choose whether to send Social Security checks to seniors or pay benefits to our veterans? How can the United States choose whether to provide children with food assistance or meet our obligations to Medicare providers?" he asked. "Prioritization is just default by another name," he declared.

Republicans didn't dispute Lew's assessment of the impact of failing to lift the debt ceiling. But they bridled at his description of the current crisis as "manufactured," saying Democrats have repeatedly failed to curb spending and that entitlement spending is on an unsustainable path.

"I think this is a manufactured crisis because we didn't work on it yesterday," said Sen. Michael B. Enzi, R-Wyo.

By John Reichard, CQ HealthBeat Editor

October 9, 2013 - Perhaps more than any other insurance exchange in the country, DC HealthLink brings society's haves and have-nots to a single marketplace. While much has been made of the fact that the district's exchange will serve members of Congress and their staffs, there's another potential large customer base: Washington's Hispanic immigrant community.

An event this week at the Carlos Rosario International Public Charter School in the District's Columbia Heights neighborhood offered a look at the many questions immigrants must sort through as they face the health law requirement that they have health insurance in 2014.

Should they shop on the exchange? Would they get subsidies? Do they qualify for Medicaid? Will federal authorities identify them as illegal immigrants if they try to sign up for coverage? What should they do if—as is true in many cases—some family members are in the United States legally and some are not?

Urging the audience of several hundred to enroll in coverage were speakers including D.C. Delegate Eleanor Holmes Norton; Diane Lewis, chair of the board that oversees DC HealthLink; Alicia Wilson, director of La Clinica del Pueblo, a community health center; and Angela Franco, head of the Greater Washington Hispanic Chamber of Commerce.

Theirs was an enthusiastic audience. Carlos Rosario is the nation's first charter school for adult immigrants. It has about 2,000 students, typically working people in their 20s, 30s, and 40s who are taking time outside of their jobs to enroll in classes that enable them to learn English, study for their high school graduate equivalency, and get certain job skills.

It also appeared to be an audience driven by a spirit that's unfamiliar or at best a distant memory to Americans long since settled in the U.S. – the desire to build a better life than those they'd left behind in their native countries. Speakers said the health law offered them an important building block to do so.

But questions posed by the audience made it clear that they have yet to be sold on the new law (PL 111-148, PL 111-152). They share the same uncertainty as others who live here about whether it will help or hurt them. Maria Gomez, a nurse, a health law assister and the founder of Mary's Center, a D.C.-based provider of maternal and child care, sought to inspire the audience to take advantage of the new law and to support the exchange as they try to climb the economic ladder through education. "I'm you. You're me. We walk in the same lives," she said.

"That's what the immigration world is about, right? To give ourselves, and our children, and our grandchildren a different life than what we had back home. So to that I say, savor every moment, seize every word that comes out of the teacher's mouth, and just fly, fly high."

Beyond inspiration, the students wanted facts. One of their biggest questions was what would happen under the health law to the DC Healthcare Alliance, which provides free doctor, hospital, and other care to uninsured city residents with incomes below 200 percent of the federal poverty line. That includes undocumented residents.

"Will I have to get other insurance?" one questioner asked.

"The answer is more complicated than I'd like it to be," said Wilson, who noted that a large percentage of La Clinica del Pueblo's patients are covered by the Alliance program. "If you do not have legal status in the United States, meaning you don't have a valid Social Security number, we are suggesting that you stay on the DC Healthcare Alliance because you will not be able to enter the health exchange and get insurance.

"If you have a legal Social Security number but you are not eligible for Medicaid because you are not a U.S. citizen or a legal permanent resident for more than five years, you have a choice," she said. "You can enter the exchange, or you can stay on the Alliance.

"However, the Alliance so far is not named a qualified health plan. So when you pay your taxes every year, you would still be facing a penalty for not having qualified insurance. For most cases, it makes more sense for people to go into the marketplace and choose insurance provided by a private company, pay for that, versus stay on the Alliance." But Wilson cautioned that it's an individual financial decision.

Norton emphasized that "if you do not have legal status please stay in the Alliance." But she warned that funding for the Alliance is no sure thing. It is 100 percent funded by the residents of the District of Columbia with no assistance from the federal government. The District is facing ongoing cuts from sequester provisions of the budget control law (PL 112-25)—for up to nine years—and "may not be nearly in the position that the health exchange is."

And the exchange offers subsidies, she underscored. "I want to invite all who in fact can go on the DC health exchange to do so. The more people who are on DC HealthLink, the less expensive insurance will be. That is the whole theory" of the health law. "Get everybody in the same pool."

Other questioners wanted to know whether the website was available in Spanish and where they could go for help if they did not know how to use a computer. Wilson said that the site should be available in Spanish in December "and we hope very soon after other languages." In-person assisters can help. "At La Clinica del Pueblo we have nine people who are trained to facilitate enrollment in Spanish and in English and we have access to interpreters who can help as well."

Another question: "Will Obamacare take money out of my paycheck?" That brought titters from the students. Franco said if the employer offered coverage some part of the premium would come out of their paychecks. "If you don't get insurance and you can get insurance, that's when you get a penalty," she said. But "if you have your documents in place ... then we encourage you to look at the exchange because that's when you get a tax benefit"—subsidies to help buy coverage.

Norton cautioned that paying lower premiums would mean paying higher deductibles.

Wilson said "what we have calculated is the risk of not having insurance. It's so much more expensive than the cost of paying for insurance," she said. Coverage "can be as low as $90." She said "it's a lot less expensive to have insurance than to have an accident and spend thousands and thousands of dollars in the emergency room."

Others wanted to know if coverage was only for basic for primary care or also for specialists and surgery, the size of penalties, who qualifies for Medicaid, and whether to apply on exchanges if a child in the family is a citizen but others are undocumented.

People with more than five years as permanent legal residents can qualify for Medicaid if they have incomes up to 200 percent of the federal poverty level in Medicaid. Wilson said the 200 percent is the highest threshold it can be under the law.

Norton said the penalty starts as low as ninety dollars "but this penalty grows and is the worst option."

Wilson noted that "most of the immigrant families in the District are what we call mixed status families where one member has citizenship, one member has a work visa, somebody's on TPS [temporary protected status] and a child is a citizen. In these very complicated situations it's very important for the applicant to talk to an in-person assister."

When people enter their information it pings through to various sites, including Immigration and Customs Enforcement, she said in an interview afterwards. "People risk some exposure if they are going through and say: "I'm undocumented, look at me, hello, hello.'" That's why it's important to use an in-person assister, she said.

Wilson said during the event that people with TPS status do qualify to go to exchanges. But to a questioner who paid taxes using a taxpayer identification number, she said that does not qualify as a Social Security number to enter the exchange.

• National Immigration Law Center info (pdf)

By John Reichard, CQ HealthBeat Editor

October 11, 2013 -- Republicans and Democrats on the Senate Finance Committee agree: It's time to talk about changes to entitlement programs.

Based on a hearing held by the committee last week, those changes could involve savings of up to half a trillion dollars over the next decade. Seniors could see a slower increase in Social Security checks. They might have to put up with Medigap policies that cover less.

The well-to-do elderly might have to pay higher Part B and Part D premiums in Medicare. And hospitals could see reduced reimbursements for patients who don't pay their medical bills.

Those are among the changes that either Finance Committee Republicans or the White House have proposed to put entitlement programs on a sounder footing. And they may be more likely now than a few months ago.

Finance Committee Democrats haven't been as specific about changes they'd make, but they say they'd be willing to make cuts if Republicans would boost revenues.

"Working together, we must address the nation's long-term budget challenges, including entitlement and tax reform," Committee Chairman Max Baucus, D-Mont., said at the hearing. The panel heard from Treasury Secretary Jacob J. Lew, who warned of the perils of failing to raise the debt ceiling.

But the need to address entitlements was on the minds of senators, particularly Republicans.

What the committee and other lawmakers, such as House Budget Committee Chairman Paul D. Ryan, R-Wis., say about making those changes is taking on new relevance.

That's because the White House and Congress may be on course toward negotiations this fall over such entitlement programs as Medicare and Social Security. Republicans have leverage to force those talks because their votes are needed to keep funding the federal government and lift the debt limit.

Sen. Rob Portman wondered at a recent hearing whether President Barack Obama might be willing to cut up to $500 billion from such spending over the next decade.

Obama's fiscal 2014 budget proposal "includes a pretty long list of entitlement savings, mandatory savings, adding up to about $730 billion over 10 years," Portman said.

The Ohio Republican called that "a step in the right direction." And Portman wondered "couldn't we move forward" by taking some of Obama's proposals, maybe $400 billion or $500 billion worth, and adding them to legislation lifting the debt ceiling.

The committee's top Republican, Sen. Orrin G. Hatch of Utah, called attention to five entitlement changes he has proposed, calling them bipartisan. They include allowing private health plans to compete with traditional Medicare, gradually increasing the eligibility age to 67, limiting what out-of-pocket payments Medigap could cover, combining the Medicare Part A and Part B deductible and establishing per capita caps in the growth of Medicaid spending.

Hatch and Sen. Charles E. Grassley, R-Iowa, expressed frustration with Obama for not responding to these proposals.

When Lew said the president has been willing to negotiate, and offered serious entitlement proposals in his fiscal 2014 budget, Grassley said that restating Obama's budget proposal wasn't true negotiation.

Lew countered that Obama has "always been willing to negotiate, just not with the threat of destroying our economy" hanging over him, a reference to Republican objections to raising the debt ceiling without major spending cuts.

Like Baucus, Lew said there could be "a serious conversation" if discussion of entitlement changes and tax changes are paired. And Lew said repeatedly that such discussions could not occur until the government has been reopened and the debt ceiling lifted.

Clearly there is a long way to go in the negotiation process before any entitlement changes actually would be made. But for now at least, it appear those discussions will occur this fall.

By Rebecca Adams, CQ HealthBeat Associate Editor

October 11, 2013 -- Republican Gov. John R. Kasich, tired of waiting for GOP legislators to approve his plan to expand Medicaid, recently found a way to bypass lawmakers and asked a state board to vote at its Oct. 21 meeting to allow him to proceed.

The seven-member state Controlling Board's backing, which is likely, is the only hurdle standing in the way of Medicaid expansion in Ohio, said state officials.

Ohio would be the 27th local government, including the District of Columbia, to expand Medicaid. Pennsylvania also recently announced its intention to expand the program.

Kasich got a letter last week from the Centers for Medicare and Medicaid Services (CMS) allowing him to amend the state Medicaid plan to allow the state to broaden the Medicaid population to include people with income of up to 138 percent of the federal poverty level. CMS officials said they would pay for all the costs of the newly-eligible population starting on Jan. 1 for three years, as allowed by the health care law (PL 111-148, PL 111-152).

Ohio state law allows Kasich to use that strategy to amend the Medicaid program. It also permits state agencies to spend federal funds that have been approved either by the Ohio General Assembly or the seven-member state Controlling Board.

The board oversees state spending and must approve certain state expenditures. It's comprised of six legislators—four Republican and two Democrats—and one representative of the Office of Budget and Management who was appointed by Kasich.

Kasich asked the board to allow the state Medicaid agency to spend federal funds for the expansion through June 30, 2015. The request does not commit Ohio to using state funds for the expansion. After the first three years, the state would have to provide some money if it wanted to continue the program because federal funding phases down, eventually declining to 90 percent of costs for the new population in 2020.

The governor had hoped to convince the full legislature to sign off on a Medicaid expansion. But the House has resisted. State officials concluded that the best way to ensure that they could get the expansion started in January was to bypass the full legislature and go through the board.

"Only the General Assembly can authorize Medicaid to spend funds in this way, either through a bill or the Controlling Board," said Kasich spokesman Rob Nichols. "The administration has been preparing to implement this change when the General Assembly gives its OK [through the board] and we'll be ready."

• Controlling board (PDF)

By Rebecca Adams, CQ HealthBeat Associate Editor

October 9, 2013 -- The Obama administration said last week that consumers need to enroll and pay their exchange coverage premiums by Feb. 15 in order to avoid an income tax penalty for not having insurance.

Health and Human Services (HHS) Secretary Kathleen Sebelius has repeatedly mentioned Dec. 15 as a key deadline for consumers who want their benefits to start Jan. 1. And she has stressed that the open enrollment period for the new marketplaces is March 31. But she has not emphasized that Feb. 15 is also a key date.

A short timeline on healthcare.gov does not mention February as a key month for implementation of the marketplaces under the law (PL 111-148, PL 111-152).

Since Sebelius has talked about March 31 as the end of open enrollment, many consumers may be under the impression that they would avoid a penalty if they enroll by then. But consumers need to sign up before Feb. 15 if they plan to send in a check by mail so the payment is processed by the deadline.

Even though open enrollment ends March 31, the law says anyone who goes without insurance for three consecutive months during 2014 is subject to a penalty. So someone who signs up for insurance after Feb. 15, wouldn't have a policy in effect until April 1. That means he or she would then be subject to the fine because they were without insurance in January, February and March.

This detail was first reported by the Associated Press.

The shorter-than-commonly-realized time frame could put pressure on HHS officials to delay enforcement of the penalty for people who do not have coverage in 2014. Already, House Republicans have called for a year delay in the individual mandate, saying that it is only fair since the administration decided this summer to hold off for a year on enforcing the penalties for employers who don't offer affordable coverage.

Even comedian Jon Stewart hammered Sebelius over the individual penalty when she appeared on The Daily Show this week. "If I'm an individual that doesn't want it, it would be hard for me to look at big business getting a waiver and not having to do it, and me having to," said Stewart, adding that opponents would think that individuals don't get a waiver because they aren't a strong lobbying force like employers are.

Sebelius never directly answered Stewart's question.

An administration spokeswoman, who was asked if the administration will start highlighting the Feb. 15 date, pointed out language on the healthcare.gov website. It says: "If you enroll between the 1st and 15th day of the month and pay your premium, your coverage begins the first day of the next month. So if you enroll on February 10, 2014, your coverage begins March 1, 2014. If you enroll between the 16th and the last day of the month and pay your premium, your effective date of coverage will be the first day of the second following month. So if you enroll on February 16, 2014, your coverage starts on April 1, 2014."

The website does not then clearly state that if someone's coverage starts on April 1 they will be liable for a penalty.

The penalty that starts in 2014 will be 1 percent of someone's income or $95, whichever is more. In 2016, the fine increases to 2.5 percent of income or $695 per person, whichever is higher.

The administration is providing a number of exemptions from the fine, including for religious reasons, if the coverage costs more than 8 percent of household income, or people are too poor to file a tax return. People who are illegal immigrants, in prison, or members of Native American Indian tribes also are exempt.

About 2 percent of Americans are expected to pay the penalty in the first year, administration officials have said.