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November 2, 2015

Washington Health Policy Week in Review Archive a5819dd7-39bb-4148-b66b-92f4f599abe3

Newsletter Article


Number of Insurers in Health Marketplace May Be Little Changed

By Kerry Young, CQ Roll Call

October 30, 2015 -- A snapshot of plans to be offered on the federal health insurance marketplace next year indicates that the number of participating companies and organizations has remained fairly stable, according to a new analysis by the Department of Health and Human Services (HHS).

The report showed that the number of organizations that plan to offer insurance in many states through the federal marketplace would be little changed.

On average, consumers will be able to choose plans offered by five different insurance companies, the same as last year. Consumers will have 47 different health insurance marketplace plan options on average in 2016, down from 55 in 2015, according to the new analysis. Those plans include a variety of different coverage levels. 

One of the states with the biggest gains was Ohio, where two new issuers would boost the total number of marketplace plans to 17 for 2016. In Arizona, there may be nine issuers of insurance in the marketplace next year, down from 12 this year, HHS said in the report. Five insurance issuers opted not to sell in Arizona through the marketplace next year, but two new ones are entering the market.

In roughly a third of states using the federal site, no net change was predicted.

The cost of the average monthly premium for the second-lowest cost silver plan, one of the most widely used options, is rising by 7.5 percent next year.

The premium for a silver plan available to people who already are in a silver plan will cost $359 per month on average before any tax credit subsidies are applied.

HHS evaluated plan information for 37 states using the platform, including data from files dating to October 19 for the 2016 coverage year.

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Newsletter Article


Burwell Lauds Marketplace Competition Despite Co-Op Failures

By Rebecca Adams, CQ Roll Call

October 29, 2015 -- Health and Human Services Secretary Sylvia Mathews Burwell downplayed concerns about the rising number of failures of co-ops, plans that were created by the health care law to increase competition.

So far, at least 10 co-ops have announced that they will cease operating. Another co-op in Vermont never began enrolling consumers.

"Across the country, the marketplace is stable and that there are choices in most counties," Burwell told reporters at a briefing on the next health law open enrollment period, which begins Sunday and runs through Jan. 31.

Many of the nonprofit co-op plans blame the administration for failing to provide all the funds that the Centers for Medicare and Medicaid Services promised to plans as part of the risk corridor program, a temporary initiative in the health law (PL 111-148, PL 111-152). The program is designed to limit insurers' losses and profits by shifting money from those plans with gains above a certain limit to some that lost money.

The program faced a $2.5 billion shortfall this year because Republicans added a provision to the fiscal 2015 spending package (PL 113-235) that blocked the Obama administration from tapping other federal funds to fund the risk corridor program. Without access to other funds, CMS had to apply the $362 million collected from insurers against $2.87 billion in claims.

"We are exploring our options. We believe it is a commitment of the ACA," said Burwell, using the acronym for the health law. She said federal officials are "continuing to examine" potential legislative and administrative fixes.

"Overall, I think the picture is a stable marketplace," said Burwell, despite the co-op failures and anecdotes of places where consumers have few choices for coverage. She said that before the health law was enacted, consumers often had limited options for buying health insurance on their own.

"In a number of places that's improved," Burwell said. "In a number of places, that's still a challenge."

HHS officials hope to highlight the entrance of some insurance companies into the market during the third open enrollment period. The administration will encourage consumers to buy coverage through a national advertising campaign featuring examples of people who are able to buy subsidized coverage. Burwell said that eight in 10 consumers are eligible for subsidies and seven in 10 of the remaining uninsured population could buy a plan for a monthly cost of $75 or less.

The administration is expected to release information about premium rates around the country on Friday.

Burwell will tout the launch of the enrollment season on Sunday at an event before joining her team to monitor activity on the website, which handles enrollment for 38 states. In the past two weeks, she held a meeting at the White House with consumer advocates and a conference call with hundreds of small business owners. She traveled to Texas, which has one of the nation's largest uninsured rates, and her home state of West Virginia. She held a call with religious leaders led by Rev. Al Sharpton to get out the word about marketplace coverage.

Burwell acknowledged that some consumers are reluctant to get covered because the out-of-pocket costs, which tend to be higher than in employer-sponsored coverage, can seem prohibitively expensive.

"Certainly it is challenging," she said. "Affordability is an issue."

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Steep Hikes, Sharp Drops Seen in Rates for Marketplace Plans

By Kerry Young, CQ Roll Call

October 26, 2015 -- Consumers in some states will see significant declines in the cost for health insurance through the subsidized federal marketplace, while others could see prices leap by more than a third, according to a federal analysis released Monday.

Enrollment opens Nov. 1 for the coverage next year through the health insurance marketplace, which was created through the Affordable Care Act. Across the markets in the 37 states that use the federal marketplace, the cost of a benchmark plan—the cost of the second-lowest silver-level offerings—will rise by 7.5 percent, HHS said. Thirteen states and the District of Columbia run their own plans.

Within that figure, though, is substantial variation in the year-to-year change for second-lowest cost silver plans. HHS shows a decline of 12.6 percent for Indiana and one of 8.2 percent for Mississippi. Prices are expected to rise by 31.5 percent in Alaska, 34.5 percent in Montana, and 35.7 percent in Oklahoma.

About eight of 10 people returning as customers to this market will be able to buy a plan with monthly premiums of less than $100 after tax credits, according to an analysis by the Department of Health and Human Services.

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Study: Ranks of Uninsured Kids Declined Under Health Law

By Marissa Evans, CQ Roll Call

October 28, 2015 -- The number of children without health insurance in the United States took a sharp drop in 2014 as key provisions of the Affordable Care Act took effect, according to a report issued Wednesday by the Georgetown University Center for Children and Families.

The population of uninsured children fell to 6.1 percent of the total from 7.1 percent in 2013, the study found, using data from the 2013 and 2014 American Community Survey. It was the biggest decline since at least 2008, when 9.3 percent of children lacked insurance, according to the center. 

"We expected we would see a decline but we were pleased to see such a significant one this year," said Joan Alker, the center's executive director. 

Researchers attributed the decline to the availability of government subsidies to help pay for coverage, the ease of enrollment through federal and state health insurance exchanges online and outreach efforts, especially to parents of children eligible for Medicaid.

"The Affordable Care Act contributed to a historic decline in the number of America's uninsured children," researchers wrote in the report. "States that took full advantage of the ACA's coverage options for parents and other adults saw sharper declines in the number of uninsured children."

The District of Columbia, Hawaii, Massachusetts, Vermont, and West Virginia had the lowest uninsured rates among children, according to the report; Alaska, Arizona, Nevada, Texas, and Utah had the largest. The study found that uninsured rates in 13 states were greater than the national average.

Just six states—Arizona, California, Florida, Georgia, Pennsylvania and Texas–were home to nearly half of the nation's uninsured kids, according to the report. And more than half of the children added to the rolls of the insured in 2014 lived in just five states—California, Texas, Florida, Georgia, and Nevada.

Colorado, Mississippi, Nevada, Rhode Island and West Virginia had the largest percentage point declines in their rate of uninsured children, according to the report. Nevada had the largest decline at 5.3 percentage points.

States that expanded Medicaid under the health care law added twice as many children to the ranks of the insured, the study found. In those states, the rate of uninsured children fell by 21.7 percent in 2014 while in states that declined to expand the health program for the poor only saw an 11.6 percent decrease.

The report notes that even though the Medicaid expansion states had lower rates of uninsured children before extending coverage, they still saw a larger decline in uninsured children compared to non-expansion states.

So far, 30 states and the District of Columbia have expanded Medicaid.

Alker said that while these gains are important there's still much room for improvement. She said there's still work to do to persuade the remaining states to expand Medicaid and getting states to have an easier renewal process so kids don't become uninsured again. 

"Streamlining enrollment and renewals practices is every bit of important as outreach," Alker said. "We tend to lose a lot of kids at renewals time and that's something we remain very concerned about and alert to."

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Newsletter Article


Medicare Premium Spike Would Be Softened By Budget Deal

By Melissa Attias, CQ Roll Call

October 27, 2015 -- Millions of Medicare beneficiaries facing a $54 spike in their monthly premiums next year would only see an estimated $18 increase under the sweeping budget agreement.

About 30 percent of enrollees in Medicare Part B, which covers doctor visits and outpatient services, were expected to see their monthly premiums rise from the current $104.90 to $159.30 in 2016, according to projections in the Medicare trustees report. The other 70 percent of Part B enrollees are protected from an increase by a "hold harmless" provision that prevents their premiums from rising more than their Social Security payments.

The budget agreement would set the 2016 monthly premium rate for the recipients that face the spike at $120, according to a summary circulated on Capitol Hill, with an additional $3 surcharge.

The deal also would alleviate an increase in the Part B deductible for all beneficiaries, lowering it from a projected $223 to $167.

The money would come from a loan to the supplemental medical insurance trust fund that would be repaid starting in 2016, by imposing the $3 monthly surcharge on beneficiaries who aren't protected by the hold harmless. The $3 fee could taper off in later years if the loan is close to being repaid and would be imposed on all beneficiaries in years that the hold harmless isn't in play.

Medicare beneficiaries who currently pay higher premiums because of higher incomes would have to pay more than $3, with the amount increasing according to the proportion of premiums they pay under current law. In addition to higher-income beneficiaries, the cohort not protected by the hold harmless clause includes new Medicare enrollees, those who do not receive Social Security checks, and low-income seniors enrolled in both Medicare and Medicaid who have their premiums paid by the states.

Under the budget agreement, the fix would occur again if there is no Social Security cost-of-living adjustment increase for 2017, which is what spurred the expected spike for next year.

"Millions of beneficiaries and state governments with already limited budgets will now not have to bear the brunt of a policy anomaly," said Energy and Commerce Committee top Democrat Frank Pallone Jr. of New Jersey.  "I am pleased we were able to come together, in a bipartisan way, to protect beneficiaries from this drastic hike."

Seniors' groups largely accepted the change. The AARP expressed strong support for the deal.

"We would have preferred no increase to Medicare Part B premiums; however, limiting the increases of those who are not 'held harmless' is a step in the right direction," said Richard Fiesta, Executive Director of the Alliance for Retired Americans.

The budget deal also draws a handful of savings from government health care programs, including a one-year extension of the sequester cuts for Medicare that's projected to save around $11 billion over a decade.

Another provision would prevent off-campus physicians' offices that are purchased by hospitals after the measure's enactment from billing under the hospital outpatient system, which provides a higher reimbursement rate than what is paid to typical doctors' offices. That's expected to save around $9.3 billion.

Another change is designed to extend the existing requirement for brand-name drug manufacturers to pay a rebate to Medicaid if the price of medicines rises faster than inflation to generic drugs as well, which is projected to save about $1 billion over 10 years. 

Chip Davis, president and CEO of the Generic Pharmaceutical Association, slammed the language in a statement. "Policymakers who are serious about keeping prescription drugs affordable for Americans should reject the provisions in today's budget proposal dealing with Medicaid rebates that could eviscerate already strained state budgets and limit patient access to lower-cost generics," he said. 

In addition, the deal would repeal a yet-to-be enforced provision in the 2010 health care law that requires large employers to automatically enroll new full-time employees in coverage. The provision was also included in the budget reconciliation package (HR 3762) that the House passed last week and was estimated to save $7.9 billion over a decade.

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Budget Deal Would Equalize Medicare Rates for Physicians

By Kerry Young, CQ Roll Call

October 27, 2015 -- The pending budget deal would clamp down on a strategy that hospitals have used in recent years to expand their Medicare payments—physicians' practices newly acquired by hospitals would not quality for higher reimbursements than independent physicians.

Many lawmakers and Congress' advisers on the Medicare program have been concerned about the trend of hospitals acquiring doctors' practices with an aim of securing higher federal payments. The purchased practices can bill Medicare for routine services through the program's hospital outpatient system, which generally receives more generous rates than independent practices. A routine 15-minute office visit for an elderly person, for example, cost about $72.50 at an independent doctors' office in 2013, but $123.38 if billed through the hospital outpatient system, according to the Medicare Payment Advisory Commission.

Under the budget deal, newly acquired practices that are not integrated into hospitals' main campuses would be limited to billing under less lucrative Medicare payment systems—the physician fee schedule and the one used for services in certain specialty surgical clinics. This restriction would apply to satellite offices located more than 250 yards from main hospital campuses.

It would take effect in 2017 and would save an estimated $9.3 billion over a decade.

The American Hospital Association had no immediate comment on the provision. Quick to praise the proposed change in Medicare billing were AARP and an alliance of medical organizations and trade groups for insurers.

The proposed change is a "positive step forward in addressing unfair payment disparities for identical clinical services provided in different healthcare settings, which are shown to increase costs and encourage market consolidations that limit patient access," said the Alliance for Site Neutral Payment Reform, which includes the America's Health Insurance Plans and the American Academy of Family Physicians associations among its members. 

AARP, the influential seniors' organization, welcomed the provision as a trade-off to prevent an impending increase in the contribution that some people on Medicare would have had to make to the program, the so-called Part B premiums. The "more equitable payment levels for new off-campus outpatient departments" are a "reasonable" way to "reduce cost without harming beneficiaries," said the top lobbying group for older Americans.

Still, the bid to cut off a path to higher payments for off-campus units of hospitals through the budget deal seems a bold step on the part of Congress, said Carrie Williams Bullock, director in reimbursement and product commercialization services at the Avalere health consulting group.

"Congress would be making a move that implies that this is a policy problem that needs to be solved," a stance that the Centers for Medicare and Medicare Services has not yet taken, Bullock said.

The impact of this change would be tempered in that it would apply only to newly purchased offices, she said. But Congress and CMS have tended to move more slowly in addressing payment disparities in which Medicare spends more on a particular health service if it's delivered in a certain location. CMS and Congress, for example, are in the midst of extensive research on how well people fare when treated in different settings after hospital stays for serious illness or injury, a field of medicine known as post-acute care.

CMS has begun only in roughly the past year to gather hard data on how commonly hospitals are buying practices, yet Congress is poised to press ahead with a large shift in payment policies for the acquired practices through the budget deal, Bullock said.

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