By Rebecca Adams, CQ HealthBeat Associate Editor

November 15, 2013 -- State officials and insurers continued to react cautiously last week to the Obama administration’s plan to let health insurance companies extend policies that were slated for cancellation under the health care law.

Meanwhile, administration officials said they are still trying to finish fixing technical problems with the transmittal of enrollment data to insurers from healthcare.gov, the federal exchange website that handles health marketplace applications for 36 states.

And President Barack Obama met behind closed doors with top insurance company executives in what he said was a “collaborative” discussion about his proposed fix.

Most state insurance commissioners have said they are still assessing what would be involved in implementing President Barack Obama‘s recent invitation to continue insurance policies that otherwise would have to be cancelled when they are up for renewal in 2014 because the policies do not comply with the benefit requirements of the 2010 health care law (PL 111-148, PL 111-152). Insurers would not be required to continue the plans and insurance commissioners would not be able to force them to do so, under the fix.

Obama’s proposal threw a sharp focus onto state insurance commissioners, governors and legislators, as well as insurance companies. Some states may have to pass new laws to allow the change.

That is probably the case in Maryland, for example, where Democratic Gov. Martin O’Malley is considering pushing for a bill to allow insurers to keep in place policies that don’t comply with the law’s benefit rules. O’Malley would also make the effective date retroactive to the president’s announcement.

In Virginia, though, insurance bureau officials tweeted that they are “reviewing whether to allow insurers to renew existing health plans per Obama idea. No decision today.”

A few insurance commissioners, led by Washington state, have said they would not allow plans that don’t meet the benefit requirements to operate next year. Others, such as regulators in large states like California and Florida, said they found the idea acceptable.

In yet other states, such as Texas, insurance regulators said they are not closely tracking insurers’ decisions because the companies do not need state approval to continue the plans.

And in some states, such as Georgia, regulators who have criticized the law are encouraging insurers to extend the policies but say they have been doing so for months. They’ve done that by asking insurers to renew policies that would expire next year early, before Dec. 31.

Whether insurers will actually decide to keep the policies in effect is another matter and one that led to the meeting including Obama and top insurance industry officials.

Obama administration officials had announced last week that they are exploring ways to provide more money to insurers through the risk corridor program, which limits insurance companies’ losses and profits. The president also recently said that insurers would have to tell customers whose policies are extended that the insurance plans do not include all of the benefits required by the law and that more comprehensive, subsidized alternatives might be available for some people in the new marketplaces.

“What we’re going to be doing is brainstorming on how do we make sure that everybody understands what their options are,” said Obama before the meeting on Friday. “Because of choice and competition, a whole lot of Americans who’ve always seen health insurance out of reach are going to be in a position to purchase it. And because of the law, we’re also going to be able to provide them help even if they are still having trouble purchasing that insurance. But they’ve got to know what those options are in order to be successful.”

Obama said that the White House is “going to be soliciting ideas from” insurers.

Gary Claxton, co-director of the Program for the Study of Health Reform and Private Insurance at the nonpartisan Kaiser Family Foundation, said that he believes that insurers will try to gauge what their competitors in different states will decide to do and take similar action. He predicted that many will continue the policies, “because you have a problem for your customers who are really in a situation where they can’t adequately consider a replacement for what they had” because of technical problems with healthcare.gov.

Centers for Medicare and Medicaid Services officials said on a call with reporters late last week that they are making progress with the troubled federal exchange website. The administration has further driven down the website’s error rate to 1 percent, down from 2 percent last week and 6 percent much of the time soon after the Oct. 1 launch.

Jeff Zients, the management expert who is overseeing the website repair effort, celebrated the fact that the system had not been shut down this week except for routine maintenance at night, unlike last week, when the administration was faced with unexpected outages.

Zients said that this week, technicians have made 60 improvements to the website and that since the launch, the administration has crossed off more than 200 high-priority problems on a list of fixes that were needed. The administration plans to tackle 50 more issues next week and will add capacity to the site this weekend.

As those fixes are made, however, more problems could crop up, Zients acknowledged. “It’s likely that we will find additional glitches and experience intermittent periods of sub-optimal performance,” he said.

By Anne L. Kim, CQ Roll Call

November 15, 2013 -- A day after President Barack Obama announced an administrative fix to health insurance policies being canceled, the House advanced legislation that would let individuals keep their policies in 2014.

The chamber passed the GOP bill (HR 3350) by a vote of 261-157. The measure drew 39 Democrats to break from their party and vote in favor, and four Republicans broke from their party and voted in opposition. The Senate is unlikely to take up the bill.

The vote came during a time of scrutiny on the Obama administration’s rollout of the health care law (PL 111-148, PL 111-152) and reports of individuals facing cancellations of policies by insurance companies because they don’t meet minimum requirements under the health care law.

The measure, sponsored by Fred Upton, R-Mich., would allow health insurance companies to continue selling in 2014 policies already existing on the individual market on Jan. 1, 2013, even though such plans might not meet the minimum requirements under the overhaul including emergency coverage, hospitalization, maternity and newborn care and mental health coverage.

Upton, whose top campaign contributor is insurer Blue Cross Blue Shield, said families receiving cancellation notices are confused and upset. “Today we stand with those families with the Keep Your Health Plan Act,” Upton said.

Republicans accused Obama of breaking a promise that people could keep their health plans if they liked them, and some said he knew that promise would not be met.

Majority Leader Eric Cantor, R-Va., said people are “counting on us to ease some of the pain that his health care law has brought on them.”
Michael C. Burgess, R-Texas, called the measure an effort at triage to stop “hemorrhaging” that has resulted from what he called an “ill-conceived” government takeover of the health care industry.

“It is a lifeline that we’re extending to our constituents that have lost the coverage that they were told that they could keep,” Burgess said.
On Thursday, Obama announced a narrower administrative fix to the canceled plans. The president’s fix would permit insurers to continue to offer through the end of 2014 millions of individual policies for people currently enrolled that are set to be canceled as early as Jan. 1 because they do not meet the health care law’s standards of offering comprehensive benefits. Insurers would not be required to continue the plans, and insurance commissioners would not be required to force them to do so.

Insurers would have to give notice of benefits that consumers forgo by not signing up with plans that meet the essential-benefits standard of the overhaul.

Unlike the Upton proposal, it would not allow enrollment of those not currently covered.

Cantor said the administrative fix didn’t go far enough.

The bill “aims to help Americans keep their health insurance and give their neighbors a chance to buy the same plans rather than forcing them onto a faulty website to buy new coverage they may not like or cannot afford,” Cantor said.

Democrats blasted the measure as a political move and an effort to undermine the health care law.

Robert E. Andrews, D-N.J., said that the bill would cause a spike in premiums. By allowing plans that he called “cars without an airbag” to be sold to anyone, rather than the administration’s plan of allowing people to keep their existing plans, there would be insufficient participation in the marketplaces and resulting premium increases.

“Let’s not in the guise of solving one problem, magnify another one,” Andrews said.

Andrews said the bill could be called “the insurance companies’ bill of rights.”

Frank Pallone Jr., D-N.J., said the bill would allow insurance companies to continue discriminatory practices, like excluding people due to pre-existing conditions, that the health care overhaul was designed to eliminate.

“This legislation is just another attempt by the GOP to undermine the Affordable Care Act,” Pallone said. “In fact I’ll call this the 46th attempt at repeal.”

“This bill will take us backwards,” said Henry A. Waxman, D-Calif.

The House rejected 187-230 a Democratic motion to recommit that would amend the bill with a proposal similar to the Obama administration’s administrative fix.

By Rebecca Adams, CQ HealthBeat

November 11, 2013 -- The number of people who chose a plan in the new federal health care marketplaces was 26,794 people in the first month of open enrollment in October, matching the expectations of an extremely low participation rate. The statistics underscore how difficult it will be for Obama administration officials to live up to the hopes that they and their allies in the health care industry had for broader coverage starting in January.

The combined enrollment for the federal and state-based marketplaces was 106,185 from Oct. 1 through Nov. 2, Health and Human Services (HHS) officials announced last week. Of those, three-fourths—or 79,391 people—signed up through the 14 states and the District of Columbia, which are running their own marketplaces. The 26,794 people who enrolled in the federal marketplace are from 36 states.

The enrollment numbers reflect the number of people who applied and chose a plan, but some of them may not have paid for the coverage yet. People must pay their premiums by Dec. 15 if they want coverage to start on Jan. 1, the first day possible.

The number of sign-ups is in sharp contrast to the tens of millions of people who showed interest in the coverage. HHS officials said that there have been an estimated 26,876,527 visitors on the state and federal websites. In addition, an estimated 3,158,436 people called into state and federal call centers to get information about how to enroll.

The total number of people who took the first step of completing an application in either a state or federal marketplace was 1.5 million people. Only 326,130 of them were eligible for a subsidy. That raises the question of whether the rest will go on to enroll or whether they will find the coverage unaffordable.

The 1.5 million applications include 396,261 people who were believed to be eligible for Medicaid or the Children’s Health Insurance Program.

The Congressional Budget office predicted 7 million people would enroll in the first year of coverage and 9 million people would enroll in Medicaid during that time. This first year’s open enrollment period extends until March 31.

A Legacy Issue

President Barack Obama staked his reputation on a successful launch of his top domestic priority. The administration has lost a tremendous amount of political capital from the embarrassing rollout. Health care industry executives representing hospitals, insurers and others had accepted billions of dollars in lower payments because they believed millions more Americans would be able to pay for health care services under the law (PL 111-148, PL 111-152).

Administration officials say they have time to catch up, but the challenges are becoming increasingly difficult. The technical problems with healthcare.gov, the federal website responsible for enrolling people in 36 states, persist.

Administration IT officials said at a House oversight hearing last week that the website will “not be perfect,” as the administration’s chief U.S. technology officer Todd Park put it, after the administration’s self-imposed Nov. 30 for having the website’s biggest problems fixed.

But administration officials said that they are not yet worried that they will not meet their enrollment goals. HHS Secretary Kathleen Sebelius repeated the administration’s point that there are several ways for people to enroll besides the exchanges, either through the national call center or in person at an assistance center. She also emphasized that people who do not expect to be eligible for a subsidy can go directly to an insurer to enroll.

Sebelius also reminded reporters during a conference call last week that enrollment in other coverage programs, such as the one in Massachusetts that is the model for the health care law, began slowly and ramped up near the end.

On Capitol Hill, lawmakers had predictable reactions, with Republicans sharply criticizing the federal effort and Democrats either remaining quiet or defending the implementation as an exercise in steady progress.

Details on the Numbers

The 29-page HHS report includes a state-by-state breakdown of the data supplied to HHS from states and the federal marketplace.

In only two states were the majority of applicants found to be eligible for Medicaid rather than marketplace insurance coverage. Those states were Maryland and Washington, two states that are expanding the Medicaid program and had their own technical problems with enrollment in October.

That jibes with reports from several states where officials said that they did not see noticeable increases in applications for Medicaid in October.

But the HHS statistics may be limited and trends could change over time.

Separately, the state of California also released its own enrollment statistics on Wednesday. Those showed that nearly 60,000 Californians through Nov. 12 had selected a marketplace plan. Another 72,007 were determined likely to be eligible for Medi-Cal, the state Medicaid program.

On Tuesday, the state of New York said 48,162 people had signed up since Oct. 1 for marketplace insurance plans. The HHS data, which was compiled from earlier statistics, said 16,404 have enrolled in marketplace insurance and 23,902 had qualified for Medicaid.

By Rebecca Adams, CQ HealthBeat Associate Editor

November 12, 2013 -- Some state officials across the nation are exploring the idea of extending coverage programs for the chronically ill beyond Dec. 31 because they worry that patients will not be able to enroll in the new marketplace benefits in time to have insurance on Jan. 1.

States have run high-risk pools for decades for ill patients who did not have other coverage options. Fifteen of the 35 state programs were slated to cancel coverage by Jan. 1 because state officials assumed people would transfer to the new marketplaces where insurers will be unable to deny coverage for people with pre-existing conditions, according to the National Association of State Comprehensive Health Insurance Plans. Another two states, Colorado and Florida, planned to end coverage in April and June 2014 respectively.

But the troubled launch and technical problems with the health law (PL 111-148, PL 111-152) marketplaces are making some states to rethink whether to cancel the risk-pool coverage. The people who are in the programs are typically quite ill and do not want to disrupt their medical treatments.

“State pools that are closing are going to more seriously consider extending them,” said Oklahoma Temporary High Risk Pool Executive Director, who also chairs the National Association of State Comprehensive Health Insurance Plans. “However, I think there are some state pools that are in states that have taken legislative action that will be difficult to amend at this time” to allow the programs can continue.

Nationwide, about 200,000 people are in the state risk pools. It’s not clear how many are in states that are terminating the programs.

A separate high-risk pool program that was funded by the federal government, known as the Pre-Existing Condition Insurance Plan, is also scheduled to stop at the end of the year. A Centers for Medicare and Medicaid Services (CMS) spokeswoman recently confirmed that there is no way for that program to continue into 2014 without congressional action. About 100,000 people get their coverage through that program.

The patients who have received treatment for serious conditions such as cancer through these programs would be among the most motivated Americans to try to sign up for new marketplace benefits. But technical problems with healthcare.gov, the federal marketplace website that handles enrollment for people in 36 states, have prevented many from making it all the way through the enrollment process.

The Obama administration says the healthcare.gov exchange website will run smoothly for the “vast majority” of people by Nov. 30. People must sign up and pay premiums by Dec. 15 if they want coverage to begin in January.

Obama administration officials say patients have time. They note that people can call a toll-free number to enroll or get help through in-person assistance so that they can enroll now.

But patients’ groups say they fear people who are extremely ill may have tried unsuccessfully to use the website and may not know of other options. The worry is that patients may be distracted or incapacitated by their treatment and not make the deadline.

“The big issue is: Will people really be able to be signed up?” said Kansas Insurance Commissioner Sandy Praeger, who supports the intent of the health care law and holds the job once held by Health and Human Services Secretary Kathleen Sebelius. “I wasn’t comforted when I heard the website would be functioning by the end of November. That gives people two weeks. We’re gonna have another crash of the system if everyone who wants to get on tries to do it then.”

Praeger said that in Kansas, officials stopped accepting new enrollees into the high-risk program this summer. She plans to try to keep paying for the services of people who are enrolled until they can switch to new coverage, even if that is past the end of the year, when the benefits are supposed to stop.

“We’ll pay those services until there’s a viable option,” said Praeger, calling it a “humanitarian issue.” But she added, “We’ll see whether the legislature will let us. They would the authority to tell us to stop doing that.”

States Beginning to Act

Indiana was the first state to announce on Oct. 31 that it would keep its state-run benefit program going for an additional month through Jan. 31, 2014, because of the uncertainty about enrollment in the marketplaces. State officials are currently trying to decide by Thanksgiving whether they should keep it going longer, said Indiana Department of Insurance chief deputy commissioner Logan Harrison in a phone interview.

“We’ll continue to monitor the status of the federal web portal and determine if the program needs to be continued and continue to make adjustments so people have continuity of coverage,” said Harrison. “They’re very, very ill—these are people with HIV and cancer and other conditions. It could mean a matter of life and death if they don’t have a smooth transition to the marketplace that the federal government has failed to deliver.” The cost of caring for the 6,800 Indiana residents who are still in the program is $6.3 million per month.

In nearby Wisconsin, it is clear that state officials have been repeatedly asked by patients about whether the high-risk pool program—known as the Health Insurance Risk-Sharing Plan, or HIRSP—could continue beyond the end of the year. The first thing that a caller hears when dialing the program is an automated message: “Although the Wisconsin health insurance marketplace is experiencing technical difficulties, there are no current plans to extend HIRSP coverage beyond Dec. 31 2013. Extending HIRSP coverage beyond this date would require a law change. If anything changes regard the final date of coverage for HIRSP members, HIRSP will notify all members as soon as possible.”

By Kerry Young CQ HealthBeat Associate Editor

November 12, 2013 -- The frail elderly too often are treated with expensive drugs and medical treatments while they lack the basic services that would do more to keep them healthier, an elder care expert recently said.

Doctors pay too little attention to the community support services that their patients may need, viewing these as something that someone else in the community knows about and will take care of, Joanne Lynn, director of the Center for Elder Care and Advanced Illness at the nonprofit Altarum Institute in Washington, said at a recent press conference sponsored by the Journal of the American Medical Association (JAMA). Yet, she said, services such as the Supplemental Nutrition Assistance Program and Meals on Wheels aid many of the frail elderly, who often suffer from multiple medical conditions that can be made worse by inadequate nutrition,

“There’s no bigger threat that has happened in the past year to the well being of the elderly than the cuts in SNAP and food support,” Lynn said, adding that an estimated 12 million meals were lost due to the budget sequester. “Where are the doctors rallying to yell about their patient not having enough food?”

JAMA included a Viewpoint article by Lynn in its Nov. 13 issue, dedicated to examining critical issues in the United States health care system. The aging of the baby boomers is making the question of better coordination of care for the frail elderly more urgent, as there will be fewer family members available to fill in any gaps in the health system, she said. The ratio of working people to dependent and disabled older adults, which was five-to-one in 2011, will drop to three-to-one in 2029, Lynn said in her paper.

In her talk last week at the National Press Club, Lynn said she was optimistic that more community services could be put in place and expanded to aid frail elderly people.

“This is one we could solve if we could actually do it right, if we could only forge the will to do it,” she said.

That will take a re-examination of how health dollars are directed. Now, doctors can fairly freely order treatments, including cancer drugs that may at best only buy patients a few months of added life for a cost of about $50,000. But they can’t line up substitute caregivers when one falls ill or make sure rugs are secured in homes to prevent falls, she said. Providing more of these services could save money, with people avoiding trips to the hospital and staying out of nursing homes longer. Thus, there are savings to be found elsewhere in the health system that could support providing more support services within the community, Lynn said.

Lynn cited the example of her then 90-year-old mother’s treatment after damaging a vertebrae to support for her argument against misplaced priorities. This injury triggered about $10,000 worth of care, but would have cost Medicare about $30,000 if Lynn had not persuaded her mother to ignore her doctor’s suggestion that she undergo a costly treatment. Lynn knew of two studies that showed that the recommended treatment wouldn’t benefit her mother, yet the services that would have helped her more, such as a home-care nurse to get her mobilized and manage her pain drugs, “was completely unavailable,” Lynn said. She said that these kinds of scenarios are repeated all too often in the United States’ health system, driving up costs.

“It’s the banal over expenditure that’s driving us into economic ruin,” Lynn said. “It’s the ordinary stuff. It’s not the dramatic thing that makes the front pages of the newspaper.”

By Emily Ethridge, CQ Roll Call

Editor’s Note: This is one in a series of reports on cuts in entitlements and other mandatory programs that budget negotiators might consider as potential common ground.

November 12, 2013 -- Post-acute care providers, including nursing homes, may find themselves a target of changed or reduced Medicare payments as lawmakers look to find savings and change their incentives to provide better-coordinated care.

Lawmakers of both parties have said the post-acute care system, which includes nursing homes and home health care, is in need of an overhaul. The Medicare Payment Advisory Commission (MedPAC) says the current system involves highly varied payment rates, high rates of fraud and incentives that discourage providers from taking the most medically complex patients.

During a House Ways and Means Health Subcommittee hearing in June, panel Chairman Kevin Brady, R-Texas, said the system “is in drastic need of reform.” Ranking Democrat Jim McDermott, R-Wash., agreed that it would be a good area in which to create savings through payment changes.

“Double-digit Medicare margins in several post-acute settings indicate that Medicare payments far exceed costs,” McDermott said.

Currently, Medicare payment rates vary for the care that beneficiaries can receive following a hospital stay in the four post-acute care settings: home health agencies; nursing homes, also known as skilled nursing facilities; inpatient rehabilitation facilities; and long-term care hospitals.

MedPAC, an independent body that advises Congress on Medicare policy, has recommended creating a unified assessment instrument for getting information on patients, regardless of what type of facility they are in. Currently, different facilities have different ways of determining patients’ conditions, so payments and outcomes can’t be compared across settings.

During budget negotiations in 2010 and 2011, lawmakers proposed reducing payments or increasing beneficiaries’ copayments for post-acute care services, to the tune of saving $50 billion over 10 years.

More recently, President Barack Obama in his fiscal 2014 budget proposal suggested five different payment policy changes for post-acute care services.

First, he called for reducing Medicare’s “market basket” payment updates for home health agencies, skilled nursing facilities, inpatient rehabilitation facilities and long-term care hospitals. The Congressional Budget Office (CBO) found his proposal to reduce annual updates by 1.1 percent beginning in 2014 through 2023 would save $43.6 billion over 10 years.

Obama’s budget also called for creating site-neutral payments between inpatient rehabilitation facilities and skilled nursing facilities for some procedures. Experts say many services provided in skilled nursing facilities could be provided at inpatient rehabilitation facilities at equal quality but for less cost. The CBO estimated that would save $1.3 billion over 10 years.

Third, Obama proposed modifying the criteria required for a facility to qualify as an inpatient rehabilitation facility, which the CBO found would save $1 billion over 10 years.

The president’s budget plan also proposed creating a penalty program for skilled nursing facilities if too many beneficiaries with certain conditions are readmitted to the hospital after receiving care at a skilled nursing facility. The CBO said it would save $1.3 billion over 10 years.

Finally, the president’s budget would create bundled payments for post-acute care services, saving $5.5 billion over 10 years, according to the CBO. MedPAC has suggested bundling the reimbursement for a number of services into one payment, so that providers have an incentive to coordinate care and provide only clinically necessary services.

The Centers for Medicare and Medicaid Services is currently implementing two bundled payment models that focus on changing payments for post-acute care services.