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February 23, 2015

Washington Health Policy Week in Review Archive 7a057f98-80ca-4695-9589-375fdf63a520

Newsletter Article


Obama Says 11.4 Million Signed Up During Health Law Enrollment

By Rebecca Adams, CQ Roll Call

February 18, 2015 -- About 11.4 million people signed up for insurance through the marketplaces created under the health care law during the just-completed open enrollment period, according to a video that the White House released last week featuring President Barack Obama and Health and Human Services (HHS) Secretary Sylvia Mathews Burwell.

Some of the individuals still have to pay their first premium before coverage can kick in. The deadline to signup was Feb. 15, although HHS officials gave people who had not finished an application an extra week to complete their enrollment. The sign-up figure includes people who were automatically re-enrolled because they had not returned to the website to choose another plan.

More than 1 million people chose plans in the last nine days of the enrollment period, said HHS officials.

The health care law is "working a little bit better than we anticipated, certainly I think working a lot better than many of the critics talked about early on," Obama said in the video.

One question remaining is whether the administration will give people another chance to sign up if they discover they owe a penalty for not having coverage in 2014 when they pay their taxes. The health care law requires uninsured individuals to pay a penalty that rises over time, although the administration also has created a long list of exemptions. The penalty for forgoing coverage in 2014 is $95 or 1 percent of income, whichever is more. For 2015, the penalty climbs to $325 or 2 percent of income, whichever is more.

The Congressional Budget Office had estimated that 12 million people would get their coverage through health law marketplace plans in 2015.

Obama said in the video that interest in marketplace coverage "gives you some sense of how hungry people were out there for affordable, accessible health insurance."

The announcement comes two weeks before Supreme Court on March 4 will hear arguments in a case challenging the system for awarding subsidies to people buying insurance. At issue is whether Congress intended subsidies to only be available in states than run their own marketplaces or also in those that rely on the federal government to run them. 

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People Who Didn't Comply With Health Law Mandate to Get Grace Period

By Rebecca Adams, CQ Roll Call

February 20, 2015 --- The Obama administration will give as many as 6 million people who didn't comply with the health law's individual mandate in 2014 almost seven more weeks to buy health insurance this year before they face a tax penalty.

Department of Health and Human Services officials said late last week that they would create a special enrollment period, from March 15 to April 30, for people to comply with the law's requirement that most individuals have health coverage. A regular open enrollment period lapsed on Feb. 15, although people who did not finish applications have until Feb. 22 to complete them.

The fee for individuals who didn't have coverage in 2014 is the greater of 1 percent of the person's annual household income or $95 per person. Penalties increase every year: in 2015, it's the higher of 2 percent of annual household income or $325 per person.

It's unclear how many people who didn't comply with the mandate have since purchased coverage or claimed one of a series of hardship exemptions. The recently announced grace period gives those individuals another chance to enroll but does not lift the penalty for failing to obtain coverage in either 2014 or 2015. 

Administration officials also acknowledged that they sent 800,000 tax filers, which could mean more than 1 million individuals, incorrect information in January about the health insurance subsidies that they received last year, which would affect their tax refunds. HHS will send out corrected forms in early March.

Only about 5 percent of the people who got incorrect information have filed their taxes already. Those taxpayers will get new instructions from the Treasury Department about how to correct their returns and, in some cases, pay higher taxes or get additional refunds as a result. 

Andy Slavitt, the principal deputy administrator of the Centers for Medicare and Medicaid Services, told reporters that the administration doesn't know how the mistake occurred. The error affected about 20 percent of the people who got a new tax document, the 1095A form, showing that they received a federal subsidy in 2014 that discounted the cost of coverage purchased through marketplaces created under the health law.

Slavitt said that federal officials have begun calling and emailing consumers who are affected. The administration is asking people to wait to send in their taxes until after they get corrected forms. The problem is linked to a local premium rate that is used in the government's formula to calculate consumers' subsidies.

The new enrollment opportunity is a one-time-only additional chance for people who will have to pay a tax penalty this year. But it is only one of several ways that people can get covered now that the Feb. 15 deadline has passed. People can enroll in marketplace coverage if they move, switch jobs, have a change in their family size, or experience other changes.

Many of the 6 million people who face a penalty can also still select from a long list of hardship exemptions. Slavitt said that federal officials are adding a new tool on the federal enrollment website to help people figure out if they qualify.

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Debate over Expanding Medicaid Heats Up in Utah, Montana

By Rebecca Adams, CQ Roll Call

February 19, 2015 -- The debate over expanding Medicaid is moving forward in such states as Utah and Montana while stalling at least temporarily in North Carolina after the Republican governor there said he wants to wait until a Supreme Court ruling on federally subsidized private health insurance this summer.

Even in states that are not weighing Medicaid expansion, the health care program for the poor is under examination, in large part because it is one of the largest components of state budgets. In Illinois, GOP Gov. Bruce Rauner is proposing cuts of almost $1.5 billion to Medicaid.

The discussion over expanding eligibility, as encouraged by the health care law, appears to be picking up the most momentum in Utah, where the state Senate is preparing for a floor vote as early as tomorrow. A top Senate Republican legislative aide said that the timing is unpredictable and a vote could come next week.

Supporters of GOP Gov. Gary Herbert's plan, which would expand Medicaid to anyone with income up to 138 percent of the federal poverty level, are vying with a much more limited option that would target assistance to people with income up to 100 percent of the poverty level and who are medically frail. The federal poverty level for 2015 is $11,770 for a single person.

The Utah state House, which is expected to take up the debate after the Senate acts, was scheduled to hold a closed-door meeting of Republicans last week to weigh options.

Herbert argues that his plan would cost the state $236 million and return $3.2 billion in federal matching grants. The narrower option for the medically frail would cost about $200 million and bring back an estimated $611 million in federal Medicaid dollars. One reason is that the health law commits the federal government to paying all of the costs of people who qualify under expanded eligibility rules through 2016. Support phases down after that until the federal government will pay 90 percent of costs for those people in 2020 and afterwards.

Backers of Herbert's plan, which is dubbed "Healthy Utah," feel confident that it would pass the Senate and are working to build support in the House.

In Montana, the expansion proposal by Democratic Gov. Steve Bullock is scheduled for a March 6 committee hearing. The state House is expected to be the first chamber to consider it on the floor after the hearing.

Bullock has failed in the past to convince legislators to approve expansion. 

As in Utah, some GOP legislators are arguing for coverage to a smaller group of people. The House Human Services Committee held a hearing last week on a bill that would cover about 10,000 Montana residents, compared to Bullock's plan to cover 70,000 people.

An aide to Bullock said that, assuming the bill gets a floor vote in each chamber, a majority of legislators in both chambers now support it and the governor believes it would pass.

"Montana has an opportunity to bring our tax dollars back to the state to expand coverage to 70,000 of our friends, family members and neighbors," Bullock said in a statement. "I've put forward a uniquely Montana plan that would take advantage of this opportunity, while throwing a lifeline to our small, rural hospitals. This is an issue that is too important to fall victim to partisan games."

In Montana—as in states such as Tennessee and Virginia, where Medicaid expansion failed in the legislature despite support from the governor—activists led by the Americans for Prosperity advocacy group have been pushing legislators to reject expansion.

Opposing the conservative group are health care providers such as hospital officials and physicians that want patients to have a way of paying their medical bills.

Americans for Prosperity (AFP) held three meetings recently in the state, although the reception from local residents was not enthusiastic in at least two of them. Video footage by the Great Falls Tribune at one of the meetings shows residents walking out after a Republican legislator who is weighing whether to support expansion was not allowed to speak. At another, a Republican legislator who is considering supporting expansion was permitted to talk and got cheers when he said he would not sign a pledge against expansion that AFP is asking legislators to endorse.

In North Carolina, Republican Gov. Pat McCrory, who told President Barack Obama in January that he is open to expanding Medicaid, said recently he would wait to endorse expansion until after the Supreme Court rules in a case this summer affecting federal subsidies for private insurance. The case involves the constitutionality of federal subsidies in some states for health insurance sold in the marketplace created by the health care law, not Medicaid.

"I will not make any recommendation as to whether or not we extend insurance for the uninsured until the court case because there are so many ramifications of the court case," McCrory said after a speech before the North Carolina Hospital Association, which supports expansion.

McCrory has been talking with Health and Human Services Secretary Sylvia Mathews Burwell about Medicaid expansion. North Carolina lawmakers had a front-row seat to the fast failure of an expansion in neighboring Tennessee, when Republican Gov. Bill Haslam was unable to convince the state legislature to approve an expansion plan.

"The court case has major ramifications on the entire health system–especially with the state exchange and federal exchange issue up in the air. I told Secretary Burwell that," said McCrory, according to his spokesman. "But at the same time, that doesn't mean I can't explore what is Indiana doing, what is Pennsylvania doing, what is Idaho doing, what's working, what's not working. I've always said I've got to fix the current Medicaid [and] help the women, children, disabled, and elderly that are currently served on Medicaid before we expanded."

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Administration Weighs Relief for Taxpayers Who Lacked Coverage in 2014

By Rebecca Adams, CQ Roll Call

February 18, 2015 -- The federal government and a number of states that enroll people for health insurance are under increasing pressure to give people facing a tax penalty for not buying plans last year another chance to get covered. Health and Human Services Secretary Sylvia Mathews Burwell reiterated at a recent press conference that federal officials will decide in the next two weeks whether to re-open enrollment for such individuals.

"We will be back quickly on it," Burwell said.

At the wide-ranging news conference, Burwell said the health care law (PL 111-148, PL 111-152) "is changing lives" but declined to say whether she is worried about a forthcoming Supreme Court case that will decide the legality of giving subsidies to people in the 34 states that rely on the federal government to run their marketplaces. Burwell reiterated that the Obama administration's position is that Congress intended people in every state to get subsidies but declined to elaborate.

The deadline for signing up for health care coverage through was Feb. 15, although the federal government is allowing people who didn't finish applications an extra week. Burwell recently said that includes about 150,000 people who had phoned call centers but had not completed their applications. Another unknown number of people also have until Feb. 22 to enroll if they say they faced technical problems.

About 11.4 million people enrolled or were automatically renewed in coverage through Feb. 15, with more than 1 million signing up in the final week before Feb. 15. However, about 200,000 people will lose their coverage because they didn't send in enough documentation to prove they are legal residents or citizens.

Most states also extended the Feb. 15 deadline, with the majority allowing sign-ups through the end of February. Washington state is giving people who faced technical problems until April 17 to complete their applications or pay premiums, said Richard K. Onizuka, the CEO of the Washington Health Benefit Exchange, on a call with reporters last week.

Last week, Minnesota announced it would give people who have to pay a penalty for failing to get covered last year one more chance to enroll through a special enrollment period from March 1 through April 30.

The directors of several other insurance exchanges–including those in California, Kentucky, and New York–said they are considering a similar opportunity. Those directors said that many people who signed up for coverage recently did so because they heard that they would be fined if they don't have insurance. People who didn't get coverage last year will have to pay $95 or 1 percent of their income, whichever is more, when they file taxes by April 15. The penalty goes up to $325 per person or 2 percent of income if people aren't covered this year.   

Ron Pollack, the director of the advocacy group Families USA and an ally of the Obama administration, told reporters that the group is pushing federal officials to allow a special sign-up period for people who face fines. He said that although government officials and advocates have publicized the penalty, millions of uninsured people still are not aware of the fines or the subsidies that could help many of them afford coverage.

"It's in all our interests to get as many people enrolled as possible," Pollack said, adding that any special sign-up opportunity would be a "limited period" that would not motivate a large number of sick people to enroll, which could drive up premiums for people who buy private health insurance on their own through the marketplace.

New York  Health Benefit Exchange Director Donna Frescatore noted on a call with reporters that some people will still face penalties even if they take advantage of another chance to get covered. The penalties are triggered when people go three months or more without coverage. If an uninsured person signed up in early March, the person's insurance would take effect on April 1.

California state officials asked insurers whether allowing people facing penalties to enroll would disrupt the market or cause premiums to go up. Health plans "were not concerned," said Peter Lee, the director of the Covered California exchange. "That's a major factor going into our considerations . . . I think it's the right consumer-centric thing to do to give this very close consideration."

Lee also said that in future years, he expects the official open enrollment periods to be less important because a growing number of people will have insurance. After the open enrollment deadlines pass, people can also get covered if their personal circumstances change in a number of ways—such as if their family size changes, they lose their insurance, or they move. Those opportunities will take on increased significance in future years, Lee predicted.

"We're now moving into a new world in which health care coverage every month is something people have available" if their circumstances change, said Lee.

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IRS Offers Relief on Employer Coverage Reimbursement

By Paul Jenks, CQ Roll Call

February 19, 2015 -- The Obama administration has quietly bowed to pressure from small businesses on taxing employers who offer cash reimbursement to employees to purchase health insurance.

The IRS and Department of Labor reminded taxpayers last year that premium reimbursement through health reimbursement accounts does not absolve the employer from the requirement to offer health coverage. The employer will still be subject to an excise tax for failure to provide coverage.

Last week, the IRS announced transition relief from the tax until June 30, 2015. The agency justified the delay due to the slow development of small business insurance exchanges and the fact that some employers may need more time to obtain group health coverage.

Iowa Republican Sen. Charles E. Grassley quickly welcomed the tax enforcement delay and Louisiana Republican Rep. Charles Boustany, Jr. urged a permanent delay of the tax.

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Hospital Use of Electronic Health Records on the Rise

By Rebecca Adams, CQ Roll Call

February 19, 2015 -- The number of hospital emergency departments using an electronic health record rose from 46 percent in 2006 to 84 percent in 2011, according to a new analysis by the National Center on Health Statistics (NCHS).

The number of hospital outpatient departments using an electronic health system rose from 29 percent in 2006 to 73 percent in 2011, according to the NCHS, which is part of the Centers for Disease Control and Prevention.

The findings mirror previous information about the growing use of electronic health records, in large part because providers that participate in Medicare and Medicaid are financially incentivized for building an electronic health system that meets certain criteria—and penalized if they don't.

Electronic health records are beneficial in meeting the goals of the Department of Health and Human Services' move toward a more value-based system rather than one in which payments are based on volume. 

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