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January 26, 2015

Washington Health Policy Week in Review Archive feb31e74-0eed-4a4a-bf4c-20cdcd23920e

Newsletter Article


Affordable Care Act Enrollment Surges as Deadline Looms

By Rebecca Adams, CQ Roll Call

January 21, 2015 -- The number of people who signed up for a Affordable Care Act marketplace plan ticked back up after three slow weeks during the week ending Jan. 16, with 400,253 people in 37 states choosing a plan through as a deadline loomed.

The total number of sign-ups since the start of the enrollment period is now almost 7.2 million, with less than a month left in the season.

During the previous week, only 163,050 people chose a plan through the federal exchange, and that was a three-week high point. The deadline for coverage that starts Feb. 1 came on Jan. 15.

The data released by Health and Human Services (HHS) officials last week does not include statistics from marketplaces in states that operate their own enrollment websites.

The Congressional Budget Office had estimated that 13 million people would enroll this year through both the federal marketplace and separate state-run marketplaces. HHS Secretary Sylvia Mathews Burwell chose to set the bar lower, at 9.1 million people.

With the holidays over and the end of the open enrollment period ending on Feb. 15, interest picked up on most measures, although the metrics for Spanish-only speakers remained low despite a push by Burwell and advocacy groups to reach out to Latinos and encourage them to enroll. More than 1.3 million people called in during the week to call centers to ask questions about coverage, leading to a wait time to speak to a representative of more than 11 minutes. HHS officials said that 128,189 callers needed a Spanish translator.

More than 3.7 million people visited last week, compared to 152,385 people who visited the Spanish language website.

Florida continued to outpace other states in signing up people, with nearly 1.3 million residents choosing a plan. In Texas, 918,890 people enrolled.

Health policy experts have predicted that Americans would respond as they did last year, with an influx of sign-ups around important deadlines. If people wait past Feb. 15 to enroll for coverage that takes effect on March 1, they may have to wait until the fall to get health insurance if they want coverage that isn't offered through employers.  However, HHS officials also allow people to sign up if they have any of a long list of changes in their circumstances, such as if the number of people in their family changes, they move or they lose their jobs.

HHS officials also released data showing the total number of health plan selections by zip code for the 37 states that rely on for enrollment. The information is up-to-date for new or reenrolled customers as of Jan. 16. The dataset will be updated after open enrollment ends on Feb. 15.

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Health Law Challenge 'Strains Credulity,' Administration Says

By Todd Ruger, CQ Roll Call

January 22, 2015 -- President Barack Obama's administration has submitted a full-throated defense of the health care overhaul law to the Supreme Court, arguing that challengers have a theory that at times is baseless, implausible, "strains credulity," and "does not respect the rule of law."

The brief, filed by Solicitor General Donald Verrilli Jr., and other administration lawyers, argues that the challenge "rests on an a contextual misreading of a single phrase in two subclauses" of the president's signature law, and "an implausible account of the act's design and history."

The case—King v. Burwell—questions whether the law should provide subsidies to low- and middle-income residents who buy health insurance in the 37 states that did not establish a state-run marketplace, called an exchange. The Supreme Court will hear oral arguments on the case March 4.

The central debate is about what Congress intended when crafting the health care overhaul law ( PL 111-148 , PL 111-152). The challengers focus on one key statutory phrase—"Exchange established by the State"—to argue that the law precludes an IRS rule providing tax subsidies to residents of states that rely on federally facilitated marketplaces.

"Petitioners largely ignore the contradictions, anomalies, and absurdities their reading would create in other provisions of the act," the administration states in the brief.

"It strains credulity to insist, as petitioners must, that Congress limited tax credits to states that establish exchanges for themselves . . . yet omitted that purportedly crucial limiting language from all of the act's myriad other references to the credits and subsidies available on exchanges," the administration wrote.

The administration states that the law was passed to provide "Quality, Affordable Health Care for All Americans." But the Obama administration argues the petitioners reverse-engineer a description of the law's design and history to fit their misreading of the phrase about exchanges.

Petitioners insist that Congress intentionally threatened to impose a dysfunctional regime on the states in order to pressure them to establish exchanges for themselves, and that Congress assumed that every state would comply," the brief states. "That notion is baseless."

To make their reading of "Exchange established by the State" fit with the rest of the law, the administration argues that "petitioners must rewrite so many of the act's provisions, and explain away or ignore so many textual incongruities and contradictions, that their argument collapses under its own weight—wholly apart from the havoc it would wreak on the act's structure and design."

Under the challengers' theory, insurance coverage for millions of residents of states with federal exchanges would be extinguished, the government said.

Enrollment for 2015 is still in progress, but already nearly 7 million customers have selected or been reenrolled in a plan through a federally facilitated exchange, and coverage through the exchanges is expected to continue to increase substantially in the coming years.

The case comes out of Virginia. In it, four Virginia residents argue that an IRS rule on the health care law runs contrary to the plain language of the statute. The case challenges the IRS rule that authorizes the subsidies for those who enroll in the federally run insurance marketplace,

The case marks the third time the justices have considered the legality of the health care law. The justices upheld the heart of the law in a 5-4 decision in June 2012. The high court struck down the law's contraception mandate as it applies to family-owned businesses in a 5–4 ruling in June.

The decision to accept the King case out of the U.S. Court of Appeals for the 4th Circuit comes as similar challenges are still moving through the lower courts. Those challenges are now on hold.

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Democrats Defend Health Law's 30-Hour Work Week

By Kerry Young, CQ Roll Call

January 22, 2015 -- Senate Democrats on the panel that oversees health policy recently sought to hold the line on a health law rule that compels employers to provide medical insurance for workers who put in at least 30 hours a week.

The stance puts more pressure on the chamber's Republicans to pick up enough crossover votes to gain a filibuster-proof majority for a bill (S 30) that would reset the threshold to 40 hours.

Two Democrats, Joe Manchin III of West Virginia and Joe Donnelly of Indiana, are among the 34 backers of the bill sponsored by Susan Collins, R-Maine. Twelve Democrats helped House Republicans pass a similar bill (HR 30) this month that the White House has threatened to veto.

Senate Health, Education, Labor and Pensions (HELP) Committee Democrats were unified and adamant in their opposition during a hearing last week.

Tammy Baldwin, D–Wis., said she wants to cooperate with Republicans to make "common sense fixes" to the 2010 health law (PL 111-148, PL 111-152), but termed the 40-hour bill "another politically driven attack on the health care law that is going to undermine the economic security of our families."

Patty Murray of Washington, the top Democrat on HELP, said changing the law would disadvantage responsible employers, those who would provide insurance without being compelled to.

Tutta Bella Neopolitan Pizzeria, a five-location chain in greater Seattle, for example, has offered medical, dental and vision benefits to salaried managers since 2005, and to all hourly employees since 2008. The company's minimum threshold for health care is 24 hours of work a week, reflecting the fact that part-time work is "inherent in the fabric of restaurants," the chain's founder and owner, Joe Fugere, told the committee.

"If this bill passes, it would allow Mr. Fugere's competitors to cut benefits," Murray said. "What would happen is that Tutta Bella would be subsidizing irresponsible behavior of those employers who don't cover their employees and push them onto public programs."

HELP Republicans maintained that the 30-hour standard is causing employers to limit hourly worker's schedules. And school districts and other employers now struggle to arrange some staffing schedules to avoid tripping the 30-hour threshold, they said.

Betsy Webb, superintendent of the Bangor School Department in Maine, told the panel she is concerned about the effects on students' education, citing substitute teachers as an example. If a teacher is out for a week, Webb's preference would be to have one substitute for the entire absence, reducing the disruption for students. Due to the 30-hour work week rule, there now may be a decision in some cases to use a different substitute teacher at the end of the week, she said.

HELP Chairman Lamar Alexander, R–Tenn., questioned why the 2010 law set the threshold at 30 hours. The average American between the ages of 25 and 49 years of age works 8.8 hours a day, or 44 hours a week, he said, citing the Bureau of Labor Statistics.

The 30-hour standard "is a strange definition—one that sounds more like France than the United States," Alexander said.

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Childless Adults Face Hurdles Qualifying for Medicaid, Survey Shows

By Rebecca Adams, CQ Roll Call

January 20, 2015 -- States have broadened Medicaid coverage dramatically in the past decade, particularly as 27 states and the District of Columbia expanded coverage to adults last year under the health care law, according to a new report by the Georgetown Center for Children and Families and the Kaiser Family Foundation. But in almost all of the 23 states that did not broaden coverage as the health care law allows, adults who don't have children rarely qualify for Medicaid, no matter how low their income is.

The health care law (PL 111-148, PL 111-152) allows states to expand coverage to people with income up to 138 percent of the federal poverty level under Medicaid, the federal and state partnership for the poor. The poverty level is $11,670 for an individual or $19,790 for a family of three.

States that do not expand Medicaid typically set different eligibility criteria for parents and childless adults. The report found that in January 2015, Wisconsin was the only state that didn't expand eligibility for childless adults. The 29 states covering childless adults is up from seven states in 2011 and 25 states in January 2013.

Over the past two years, the number of states covering parents with income at or below the poverty line rose from 18 states in January 2013 to 31 states in January 2015.

Even before the health care law's Medicaid expansion was implemented last year, many states had widened coverage for children over the past couple of decades as the Children's Health Insurance Program was implemented. In 1997, only six states covered children in households with income that is twice the federal poverty level. That number rose to 41 in 2005 and 48 in 2015. The number of states covering children in families earning three times the poverty level rose from two in 1997 to six in 2005 and 19 in 2015.

Despite those coverage gains, in most of the states that haven't expanded Medicaid under the health care law, adults without kids remain out of luck, and parents only qualify if they are very poor. The report found that 14 states set eligibility levels for non-parents at less than one-half of the poverty level.

Parents can only get Medicaid in Alabama if their household income is 18 percent of the poverty level or less, the report said. That's just under $3562.20 per year for a family of three. In Texas, parents qualify if their income is 19 percent of poverty or $3760.10, or less.

And people who earn too much for Medicaid may not make enough to qualify for new federal subsidies available to buy insurance through new health insurance marketplaces. People can only get the subsidies if their income is between the poverty level and four times the poverty level. That leaves almost four million uninsured people without any way to get federal help in getting coverage either through Medicaid or the marketplace plans, according to other Kaiser Family Foundation reports.

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Bid to Force Higher Medicaid Payments Reaches Supreme Court

By Melanie Zanona, CQ Roll Call

January 20, 2015 -- The Supreme Court will hear oral arguments this week on whether states can be forced to raise Medicaid reimbursement rates in an effort to keep pace with rising costs.

The case comes several years after a group of private health care providers serving disabled adults and children in Idaho filed a lawsuit against the state's Health and Welfare Department for freezing Medicaid reimbursement rates at 2006 levels, despite a study showing costs had risen.

A U.S. district judge ordered Idaho to raise Medicaid payments in 2011—a decision that was upheld by the 9th U.S. Circuit Court of Appeals in 2013. The high court will now hear an appeal of that outcome, with a decision on the case expected in June. Idaho officials estimate that it cost an extra $12 million in 2013 to increase reimbursement rates in the state.

At the core of the debate is whether providers have the right to sue a state for not adequately reimbursing them for services provided under Medicaid, the federal-state health insurance program for the poor. The state's primary argument is that providers have no legal standing to sue and shouldn't be able to use the court system to receive higher rates.

But providers and health groups maintain that there needs to be a judicial process to ensure that Medicaid beneficiaries receive equal access to care, as mandated by law (PL 89-97).

"The nation's most vulnerable patients deserve the same access to high-quality medical care as patients with private insurance," said American Medical Association (AMA) President Robert M. Wah in a press release. "The sad fact is that Medicaid's guarantee of equal access has become an illusion in many states that have cut Medicaid funding and driven physicians and other health professionals from the program."

Frozen payment rates in some states have fallen below the average cost of care and thus make it unreasonable for physicians to take on Medicaid patients, according to the AMA.

The American Hospital Association echoed those arguments in the amicus brief it filed along with the Federation of American Hospitals, saying it is both unfair and illegal to suppress reimbursement rates in ways that ultimately inhibit Medicaid patients from receiving care.

The "promise of equal access is central to Medicaid's purpose—yet states have repeatedly cut reimbursement rates to levels far below providers' actual costs without taking into account how that harms providers or constrains the availability of health care for the neediest Americans," the brief stated. "Without recourse to the courts to enforce the conditions Congress set in place, hospitals and other providers will continue to bear losses that, for some, are unsustainable."

Under the Constitution's Supremacy Clause, which providers have used to say federal law preempts state law, Idaho officials argue that private parties are not allowed to enforce federal Medicaid laws unless Congress had created a private right to do so.

The state has said that it is up to federal agencies—not private parties—to determine whether states are in compliance with federal Medicaid statutes. They also contend that such lawsuits could subject states to obligations that were not anticipated when deciding to accept Medicaid and prevent them from staying within budgetary limits.

Twenty-seven states and the National Governors Association have backed Idaho in a brief on the case.

If the providers win, states could be forced to set higher reimbursement rates, but if Idaho wins, than private parties would likely be barred from bringing such suits against states in the future.

Some Medicaid reimbursement rates are already due for steep cuts this month after Congress' refusal at the end of 2014 to renew a fee bump in the health law (PL 111-148 , PL 111-152) designed to match the primary care payment rates for Medicare, the federal program for the elderly and disabled.

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Arkansas Governor Seeks Task Force for Medicaid Changes

By Rebecca Adams, CQ Roll Call

January 22, 2015 -- Arkansas Republican Gov. Asa Hutchinson called for continuing the state's current Medicaid system through the end of 2016 but creating a task force to recommend changes after that.

"I want us to have a health care system that is compassionate, affordable, fits Arkansas, and provides access to care," Hutchinson said in a speech last week.

Hutchinson said that continuing the current program through Dec. 31, 2016, would avoid harming the approximately 200,000 Arkansans who use the model and ensure hospitals and other providers financial stability.

"It is time to close this chapter and to start a new one," he emphasized.

The system that Hutchinson would like to revise in 2017 has become a template for other states around the country led by GOP governors. Under a waiver from the federal government because the Arkansas system does not adhere to traditional Medicaid rules, the state has used its Medicaid dollars to buy health insurance plans for its residents through new marketplaces created under the health care law (PL 111-148, PL 111-152). That so-called private option is available for people who are eligible under guidelines that expanded the program for adults with income up to 138 percent of the federal poverty level.

But the state legislature has to continue to sign off on the model with a supermajority vote every year. Some Republican legislators want to make changes to lower costs, connect Arkansans to state job programs or require beneficiaries to pay more for their care. Hutchinson said he wanted more reliability and predictability so that the program does not face a "cliff" every year that has to be renewed.

The year 2017 would be a natural point to make adjustments. Under the health care law, federal officials will pay for all of the costs of the newly eligible people who gained coverage because of expanded eligibility guidelines. But starting in 2017, states start to pick up more of the costs until the federal share phases down in 2020 to 90 percent of costs for people in the expansion population.

The health care law allows states to seek major changes starting in 2017 under a new type of waiver. The flexibility allows states to waive big parts of the health care law, including the marketplace plan requirements, if state officials create a different way of achieving similar results.

Hutchinson wants the task force to start its work later this year and outlined a series of policies the group may want to consider, including:

  • Minimizing or eliminating the need for the state additional general revenues for continued investment in the Medicaid expansion program. "Obviously, you have to keep up with inflation," but Hutchinson said he wants to minimize the need for more revenue than that.
  • More federal flexibility in managing Medicaid. "We fought for that; we want to continue to fight for that," said Hutchinson.
  • A block grant type waiver or "authority so we can have a maximum amount of flexibility in Arkansas."
  • Encouragement of low-wage workers to get coverage through their employers, with potential help from Medicaid.
  • Increasing accountability and personal responsibility for healthy behavior.
  • Improved access to services for people in rural areas of the state.

Hutchinson said he recently received a letter from Health and Human Services Secretary Sylvia Mathews Burwell, with whom he has met previously to talk about Medicaid expansion.

"We made the case we needed more flexibility in Arkansas to determine our own direction" in Medicaid, Hutchinson recounted of the meeting.  

Burwell wrote that she was pleased to learn of the state's commitment to an effective and affordable approach beyond the current three-year term of the waiver and to move forward on major delivery system reforms that would apply to the larger Medicaid population. She said that she understands the governor's desire to encourage employment and supports his desire to avoid a piecemeal approach to changes. Burwell said she looked forward to working with the state on a broad block of changes.

"I noticed that there was not resounding applause at any point during the speech," Hutchinson said at the conclusion of his speech, to laughter and applause. He said he thought that simply means that "whatever we do, we're going to get criticized, we're going to get applauded" by different sides of the debate.

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