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November 25, 2013

Washington Health Policy Week in Review Archive 57d71564-ccae-44f7-8a66-7cd65cc1d39b

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California Officials Encouraged by 'Young Invincible' Sign-Up Rate

By Rebecca Adams, CQ HealthBeat Associate Editor

November 22, 2013 -- California, which is pushing hard to successfully implement the health care law, is seeing a strong turnout for its state-run marketplace, including among young and healthy applicants, state officials said last week.

At the same time, however, older Californians are enrolling in greater proportions than their share of the state's population.

As of Nov. 19, 360,464 Californians had completed applications for themselves and in some cases, their families. Filling out the application is the first step in enrolling.

Of the 30,830 people who enrolled during the first month of October, about 22.5 percent, or about 6,900 people, were between 18 and 34 years old. That age group makes up about 21 percent of the state's population.

"Not only are we seeing strong enrollment numbers overall, but enrollment in key demographics like the so-called young invincibles is very encouraging," said Peter Lee, the executive director of Covered California, the state marketplace.

However, about 34 percent of people who enrolled in October were between the ages of 55 and 64, even though that age group makes up only 11 percent of the state population. But Lee had said previously that he expects that to change over time, because older and sicker people were motivated more during the first month of enrollment to make sure they signed up.

The number of people enrolling each day has increased dramatically, with about 10,000 people per day taking the first step of filling out an application. During the first week of October, about 700 people per day took the next step of selecting a plan. By the second week of November, that number had grown to about 2,700 people per day.

About 39 percent of people who applied through Oct. 31 are eligible for Medi-Cal, the state Medicaid program. Another 30 percent of applicants were eligible for subsidized coverage, and 31 percent qualify for nonsubsidized coverage. It's not altogether clear yet to what degree the state is reducing the size of its uninsured population, because a number of those coming to the state's exchange are thought to be people who have received cancellation notices in the individual market. California is not permitting insurers to extend those canceled policies.

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HHS—Not GOP—Points to Better 2015 Exchange Rates as Reason for Deadline Shift

By John Reichard, CQ HealthBeat

November 22, 2013 -- The Obama administration is signaling that it plans to move back the deadline for insurers to file 2015 rates on insurance exchanges by one month in hopes of keeping premiums down in the second year of the new marketplaces.

But Republicans protested late last week that the shift, which also delays the start of next fall's open enrollment period from Oct. 15 until Nov. 15, is a blatantly political move by the White House. They said the intent is to keep consumers from finding out about zooming exchange premiums in 2015 until after they have voted in the November 2014 elections.

A leading insurance industry consultant backed the Republican charge. The change "has an insignificant actuarial value but a huge political value," said Robert Laszewski of Health Policy and Strategy Associates in Alexandria, Va.

A Department of Health and Human Services (HHS) official who declined to be identified said that instead of filing rates by the end of April 2014, insurers will have until the end of May 2014. The change "will give issuers the benefit of more time to evaluate their experiences during the 2014 plan year and allow them to take into account those who may enroll late, including young adults, before setting 2015 rates," the official added.

Insurers praised the move.

"Giving health plans more time to submit premium rates for next year will enable them to better assess who is covered in their plans and help ensure those rates more accurately reflect the population covered," America's Health Insurance Plans, the nation's largest health insurance lobby, said in a statement.

No one knows what the 2015 rates will be. But current signs point to the possibility—if not the likelihood—of sharp increases. Enrollment snafus may keep the young and healthy from signing up any time soon on the federal insurance exchange, And the deadline for filing 2015 rates comes hard on the heels of the March 31 close of the open enrollment deadline.

The April 30 deadline for filing 2015 rates would have given insurers little time to accumulate claims experience and other data on which to base their premiums. Now they will have another month.

But Laszewski said "another month of early claims data will hardly matter. However, with the Obamacare enrollment off to such a poor start, it is looking more and more likely that 2015 health insurance rates will suffer. Pushing things to the end of May also pushes the 2015 open enrollment until November 15—11 days after the 2014 elections."

That means "if premiums go through the roof in the first year of Obamacare, no one will know about it until after the election," Sen. Charles E. Grassley said in a statement.

"This is clearly a cynical political move by the Obama administration to use extra-regulatory, by-any-means-necessary tools to keep this program afloat and hide key information from voters," the Iowa Republican charged. "The administration is welcome to prove me wrong by committing to put out 2015 plan year premium rates by Nov. 1, 2014."

News of the delayed start of the open enrollment was first reported by Bloomberg News. It was not widely publicized by HHS. A previous controversial move by the administration—delaying the employer mandate—was handled in similar fashion.

The open enrollment dates already were scheduled to change after this fall's open enrollment period, which is unusually long and runs from Oct. 1 to March 31. HHS had said it would start open enrollment next fall on Oct. 15 and run it until Dec. 7. The new dates are Nov. 15 through Jan. 15.

In addition to coming later, that means it's a slightly longer open enrollment period than had been set for next fall.

It's not altogether clear how successfully the date change will shield the public from 2015 rates. States with their own exchanges have the power to release rates early.

This year, HHS said it would release federal exchange rates in September, before the Oct. 1 start of that marketplace. But its rates didn't come out until shortly before the open enrollment period began. A similar pattern next year would keep people from knowing for sure what 2015 rates are until after the elections. But insurance commissioners in some states served by the federal exchange, such as Georgia and Ohio, said earlier this year—well before open enrollment began—that rates would be high.

It's not altogether clear how set in stone the new plan is. The HHS official described the new policy in conditional terms, saying for example that HHS "will soon be signaling its intent" to change next fall's open enrollment period. The official also said in describing the policy that "we would begin open enrollment on Nov. 15"—not saying HHS will actually do so.

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CMS Moves Back Exchange Enrollment Deadline Until Dec. 23

By John Reichard, CQ HealthBeat Editor

November 22, 2013 A federal official told reporters last week that the deadline for signing up for coverage on insurance exchanges that begins Jan. 1 has been moved back eight days from Dec. 15 to Dec. 23.

Applicants who enroll by then and pay their first premium by Dec. 31 will be covered as of the first of the year, said Centers for Medicare and Medicaid Services (CMS) spokeswoman Julie Bataille during a telephone briefing.

An industry official said that insurers were aware of that decision to change the enrollment deadline to Dec. 23 and the payment deadline to Dec. 31 but did not agree with it.

Separately, Department of Health and Human Services (HHS) officials signaled their intention to move back other deadlines for rate filings and the open enrollment period for 2015.

Joining Bataille on the call was's fix-it man, Jeff Zients, who painted a picture of steady progress in debugging the marketplace, consistent with the vision he first outlined when the administration announced an emergency repair effort.

Zients once again insisted as he did at the outset that by Nov. 30 the site would work for the vast majority of users.

He also said in response to a reporter's question that its capacity should be sufficient to prevent a break in coverage for an estimated several million Americans who are facing a loss in coverage starting Jan. 1 because of policy cancellations on the individual market and the shuttering of federal and state risk pool programs covering hard to insure Americans.

Zients forecast improvements between now and the end of the month but warned against viewing Nov. 30 as a "magic moment."

The capacity of the site to handle simultaneous visitors will double between now and then, reaching 50,000, he said. The site on Nov. 30 will also have the capacity to handle more than 800,000 visits a day from "consumers who are seeking information, filling out applications, shopping and enrolling," he said.

"The system will not work perfectly, but it will work smoothly for the vast majority of users. While there will not be a magic moment at the end of the month when our work will be complete, users coming to the site today are already having a greatly improved experience and the site will be better at the end of the month than it is today and it will continue to improve thereafter."

Zients added that "it's important to keep in mind here that this is not a simple website but rather a complex system doing complicated work. The system needs to process the millions upon millions of unique circumstances that consumers present. It needs to determine eligibility for hundreds of state and county level programs in all their permutations and it needs to factor in subsidy levels based on family size, income, and plan selection. This is much more than a website for browsing or conducting routine transactions."

The officials noted that as further fixes are made to improve speed and capacity, there will be maintenance periods. Thus the site will be down between Saturday 9 p.m. and Sunday 9 a.m. as far as its application system goes and the federal hub will be down during part of that period as well.

Robert Zirkelbach, a spokesman for America's Health Insurance Plans, said the new Dec. 23 deadline "makes it more challenging to process enrollments in time for coverage to begin on Jan. 1."

He added: "Ultimately it will depend on how many people enroll in those last few days. It is also important to keep in mind that consumers need to pay their first month's premium before their coverage can begin."

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'Doc Fix' Markup Scheduled by Senate Finance for December

By Emily Ethridge, CQ Roll Call

November 21, 2013 -- The Senate Finance Committee will mark up its bill to replace how Medicare pays physicians on Dec. 12, less than three weeks before physicians would experience a 24 percent cut in payments.

The markup shows that committee leaders are forging ahead with their plan to pass a replacement bill this year, although time is running short. The Finance Committee and House Ways and Means Committee released a joint draft framework Oct. 31 that would repeal the current payment formula, known as the sustainable growth rate (SGR).

The House Ways and Means Committee, which gives three days' notice for markups, has not yet scheduled a markup, according to a committee aide.

To avoid having physician payments cut on Jan. 1, lawmakers need to pass some kind of bill. With the tight deadline, a temporary reimbursement patch is likely. Such a patch would buy lawmakers more time to work on the larger replacement measures.

The joint committee draft is based on a bill (HR 2810) that the House Energy and Commerce Committee approved unanimously in July. The two committees hope their joint proposal will offer a less-expensive alternative to the Energy and Commerce bill, which the Congressional Budget Office (CBO) found would cost $175.5 billion over 10 years.

Committee aides said lawmakers hoped to move the joint proposal through the regular legislative process. But time is running short to pass a bill this year.

Lawmakers also have yet to publicly agree on a way to pay the cost of any replacement bill, and the Finance Committee plans to consider offsets for the bill separately. The CBO found that repealing the SGR for 10 years would cost $139.1 billion, significantly lower than previous estimates. But lawmakers have clashed before on how to offset that cost.

During the Dec. 12 markup, the committee also will consider a package of several health-related provisions that expire each year, commonly known as the "Medicare extenders."

So far, reaction from provider groups and other stakeholders has been mostly positive. Everyone agrees the SGR needs to be repealed, but groups differ on the details. Some groups also said they needed more information on the joint draft framework.

The American Medical Association (AMA) praised the committees for their work, but stopped short of endorsing the proposals.

"Now is the time to move past the annual SGR crisis and toward a Medicare program that ensures access to high-quality and efficient health care for patients and a stable practice environment for physicians," said AMA President Ardis Hoven in a statement. AMA leaders and physician representatives visited lawmakers this week and lobbied for Medicare changes.

The Alliance of Specialty Medicine, which represents several specialist groups, voiced several concerns with the draft proposal, including its provision to freeze physician payments for 10 years. The group also said in a letter to committee leaders that they were concerned the framework's alternative payment model proposal ignores that the most widely tested proposals present challenges for specialists.

The Federation of American Hospitals called the proposal "a significant step" toward fixing Medicare's physician payment system and said hospital cuts should not be used as an offset.

Reid Blackwelder, president of the American Academy of Family Physicians, praised the draft proposal for encouraging physicians to build on the patient-centered medical-home model and other alternative payment models. He also provided several recommendations, including increasing financial assistance for individual physicians and small practices to help them participate in the new models.

The joint draft proposal would allow physicians to either stay in Medicare's traditional fee-for-service system or move to alternative payment models. Those who stayed in fee-for-service would have their payment rates frozen for 10 years, although they would be able to get incentive payments for participation in a comprehensive, value-based quality program.

That draft proposal would consolidate Medicare's three existing quality programs into a single, budget-neutral program that would give higher payments to doctors who provide high-quality, high-value care.

Physicians who receive a significant portion of their revenue from alternative payment models in which they assumed some financial risk would also be eligible for bonus payments. The models could include patient-centered medical homes, accountable care organizations and bundled payment models.

In 2016 and 2017, providers would need to receive at least 25 percent of their Medicare revenue through the alternative payment model to receive a 5 percent bonus. That threshold would increase over time. Those physicians also would be exempt from having their performance judged under the value-based quality program.

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Don't Look for Health Law Changes Before 2017, Policy Experts Say

By Kerry Young CQ HealthBeat Associate Editor

November 22, 2013 -- Congress will eventually make some adjustments to the 2010 health law, but these won't happen until at least after the next presidential election, health experts recently said.

Some alterations to such sweeping legislation (PL 111-148, PL 111-152) are virtually inevitable, although its substance will be left intact, agreed members of an American Enterprise Institute (AEI) panel. They included Ron Pollack, executive director of the left-leaning advocacy group Families USA; Gail Wilensky of Project Hope, who ran the Medicare and Medicaid programs during the George H. W. Bush administration; and Joseph Antos, the AEI panel who chaired the panel.

"This legislation is not going away," Wilensky said. "It has problems that at some point we'll start to get refocused on, and deal with."

For the immediate future, though, there is little chance of Congress clearing any major tweaks to the law, said Wilensky, now a senior fellow at Project HOPE.

The odds for a fix of any kind before 2016 were low even before Senate Majority Leader Harry Reid, D-Nev., has exercised what had long been called the nuclear option, but that decision pretty much took any quick fixes off the table, she said. The Senate voted to require only a simple majority, rather than 60 votes, to overcome filibusters on executive branch and judicial nominees, other than for the Supreme Court. This enraged Republicans, and thus will make it more difficult to pass complex legislation, such as any changes to the health law, she said.

"I am now more convinced than ever it will be not until after 2016," Wilensky said, saying that Reid's move "irreparably poisoned" the atmosphere on Capitol Hill. "There is now no chance of a coming together to try to make things better until there is another presidential election."

Among the health issues likely to confront the next president will be any fallout from an expected major shift in how people with moderate wages get their insurance. Many companies that don't have to compete heavily for employers and thus pay lower salaries will stop providing health coverage, and shift their workers to the exchanges, Wilensky said.

"Both the employee and the employer are better off because the subsidy is more" in cases where smaller companies have not been providing highly generous packages, Wilensky said. She was referring to subsidies people below certain income levels get to buy health coverage on exchanges.

"Big employers aren't likely to move. They are already set up to attract well skilled employees" through more generous benefit packages.

There could be big migration away from what's now the common model of health insurance being tightly linked to employment, but this will take time, she said.

"This isn't going to happen in the first year. This is a like a five-year phenomenon," she said.

Antos said it's difficult to predict what health issue the next administration will address first. But it could be revisions to the law stemming from wider-than-expected switching into new kinds of health exchanges as smaller companies drop coverage. "Suppose employers embrace private exchanges in a big, big way, which I think they will. This is what happened with pensions," Antos said, referring to the 1990s move toward broader use of 401(k) plans. "Then I could see some regulation to provide a little more protection, just like what happened with pension plans going to 401(k)s."

Those new regulations were not onerous enough to slow growth in 401(ks), just as new legal protections for customers in health-insurance exchanges likely wouldn't curb a trend toward to switching away from the current model, Antos said.

"We're not going back there," Antos said. "We're not going back to what in four years we are going to think of as old-style employer-sponsored plans."

Families USA's Pollack recalled how just before the passage of the health law, he ran into Raul Grijalva, D-Ariz., a leader of the Congressional Progress Caucus. Pollack said he asked Grijalva if he would back the law, and the congressman responded with a "diatribe" of its failings. Pollack said he then went through with Grijalva some of the failings of the original version of the Social Security Act of 1935, such as excluding many women from its protections. These shortcomings were addressed in later laws.

"Those things got fixed" in the Social Security Act, Pollack told the audience at AEI. "And, the Affordable Care Act is not the last word in how we're going to change America's health care system. It's a major change to be sure ... but it will be modified."

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Watch This Space: Medicaid Expansion Discussions Ongoing

By Rebecca Adams, CQ HealthBeat Associate Editor

November 22, 2013 -- Most states that so far have not expanded Medicaid are "looking for a way to get to yes," the leader of the National Association of Medicaid Directors (NAMD) said at a recent briefing held by the Alliance of Health Reform and cosponsored by The Commonwealth Fund.

NAMD Executive Director Matt Salo said that the "vast majority" of states in the "no" category would be interested in taking advantage of federal funding to expand Medicaid if they could get the Obama administration to allow them to tweak the program.

Some are interested in allowing newly eligible Medicaid enrollees to get coverage through the new marketplaces, as Arkansas is doing.

A few of the states to watch next year include New Hampshire, where expansion did not make it through the process in a special session that ended last week despite Democratic Gov. Maggie Hassan's support; Florida, where hospitals are lobbying hard for expansion in the state legislative session that starts in the spring; and Virginia, where newly elected Democratic Gov.-elect Terry McAuliffe supports broadening the program.

The wide-ranging Alliance briefing was centered on the new marketplaces, but people who apply are supposed to be evaluated for Medicaid coverage as well.

At the same briefing, D.C. Health Benefit Exchange Authority Executive Director Mila Kofman released a limited amount of basic demographic data. The data were for only the first 120 enrollments, but gave an indication of interest among D.C. residents. The highest number of enrollments were among those between the ages of 31 to 40, Kofman said, followed by those in the 20- to 30-year-old age bracket and then the 51- to 60-year-old category.

Most picked the platinum level of coverage, which surprised Kofman. She also said the exchange got several enrollments from people who were 65 years old or older. She was not sure whether they were ineligible for Medicare or trying to drop Medicare to enroll in a marketplace plan.

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