By Dena Bunis, CQ HealthBeat Managing Editor

September 27, 2013 -- If the federal government shuts down, the Department of Health and Human Services’ contingency plan calls for furloughing more than half of its 78,198 employees.

Services such as the Centers for Disease Control and Prevention’s (CDC) flu program and the majority of the Food and Drug Administration’s food safety activities would be suspended, according to a plan the agency posted on its website late Friday.

According to the memo, the Centers for Medicare and Medicaid Services (CMS) "would continue large portions of Affordable Care Act (ACA) activities, including coordination between Medicaid and the Marketplace, as well as insurance rate reviews, and assessment of a portion of insurance premiums that are used on medical services."

The contingency plan "for agency operations in the absence of appropriations would lead to furloughing 40,512 staff and retaining 37,686 staff as of day two of a near-term funding hiatus," the document says.

"As in previous periods without enacted annual appropriations, the number of excepted staff would vary daily," the plan says, "depending on the amount of excepted work that needs to be done."

Some employees would be exempt from furlough because their jobs are funded through mandatory, carryover or user fee funds which wouldn’t be affected by a shutdown, the memo explained. Also exempted are staff whose activities are needed for the "safety of human life." The vast majority of those are employees in the Indian Health Service and the National Institutes of Health’s (NIH) Clinic Center that provide direct medical services. A number of presidential appointees also would be exempted from the furlough.

Here’s a look at some of the agency’s key divisions and what would and wouldn’t continue:

• Centers for Medicare and Medicaid Services. The memo says that "in the short term, the Medicare program will continue largely without disruption." Because of the way appropriations are made to the Medicaid and Children’s Health Insurance Program, states would continue to get their federal shares of those programs.

CMS would have to suspend its health care fraud and abuse strike force team operations. In addition, fewer recertifications and initial surveys for Medicare and Medicaid providers would be completed, "putting beneficiaries at risk of quality of care deficiencies," the memo says.

• National Institutes of Health. NIH would continue patient care for Clinical Center patients but would not admit new ones, "unless deemed medically necessary by the NIH Director," the plan says. Some veterinary services would be halted and NIH would not process any new grant applications or awards.

Employees would be available at NIH to protect the health of its animals.

• Centers for Disease Control and Prevention. Beyond suspending the seasonal influenza program, CDC would not be able to support outbreak detection and would not be able to assist states with infectious disease surveillance. The CDC would, the memo says, "continue minimal support to protect the health and well-being of U.S. citizens here and abroad through a significantly reduced capacity to respond to outbreak investigations, processing of laboratory samples and maintaining the agency’s 24/7 emergency operations center."

Because such programs as PEPFAR, CDC’s Global AIDS program and other similar programs are supported through mandatory funding, including from the World Health Organization, those efforts would continue.

• Food and Drug Administration. Because some of this agency’s funding comes through user fees, this agency would be able to continue some limited activities, the memo says, including in the Center for Tobacco Products. It would continue to handle "emergencies, high-risk recalls, civil and criminal investigations” and other similar activities." But the agency would have to "cease safety activities such as routine inspections, some compliance and enforcement activities, monitoring of imports" and the majority of laboratory research necessary to inform public health decision-making, the memo says.

By John Reichard, CQ HealthBeat Editor

September 26, 2013 -- Thirteen states with almost half of the nation's uninsured population have passed laws or regulations blocking health care law navigators from helping to guide those without coverage through the enrollment process, the left-leaning organization Health Care for America Now said in a study released last week.

Some of the state laws involved are unprecedented in that they "go after community-based groups that are working to provide consumer assistance," Georgetown University research professor Sabrina Corlette said during a telephone press briefing on the report.

"Which isn't to say that there aren't legitimate concerns about fraud or con artists taking advantage of Obamacare," she added. "It's just that these state laws are barking up the wrong tree. There's just no credible evidence whatsoever that navigators will be a source of fraud. In fact, just the opposite."

The states include 17 million uninsured people, or 41 percent of the uninsured population eligible for expanded coverage under the health care law (PL 111-148, PL 111-152), according to the report. The 13 states are Arkansas, Florida, Georgia, Iowa, Illinois, Indiana, Maine, Missouri, Montana, Ohio, Tennessee, Texas and Wisconsin.

"These excessive requirements include such things as residency rules, fingerprinting, extra fees, superfluous certification exams and background checks, even though previous experience with Medicare counselors suggests that no such protections are needed," the report said.

It said that in Texas, for example, navigators must have 40 hours of state training in addition to the 20 hours the health care law requires. Republican Gov. Rick Perry "is even trying to limit the hours of navigator operations from 8 a.m. to 5 p.m., which is an extraordinary restriction for ordinary folks who are working for a living who want to buy insurance and get benefits," said an HCAN official.

In Georgia, navigators must pass an exam that is required for insurance agents even though navigators are not permitted to provide the same level of assistance to the uninsured as brokers are, the report said.

House Energy and Commerce Committee Republicans say criminal background checks are needed for navigators to protect against identity theft. They say that practices such as door-to-door visits to enroll the uninsured could make people vulnerable to fraudsters posing as navigators, among other concerns. A federal official told a congressional panel last week that navigators would not be going door-to-door to counsel consumers.

"In the case of the navigators, these groups have already been vetted through the grant-making process," Corlette said. "They've had to meet tough federal standards for training, conflict of interest. So these state laws are not only unnecessary, but they are clearly designed not protect consumers but to undermine implementation of the Affordable Care Act."

HCAN Executive Director Ethan Rome said that "some of the Obamacare opponents may think they're attacking the president or the law, but mostly they're hurting real people with real health care needs. This isn't just an abstract political debate. For people without health insurance, this is about whether they can get medical care and whether they can get it without going bankrupt."

• Report (PDF)

By Dena Bunis and Rebecca Adams, CQ HealthBeat

September 26, 2013 -- With the opening of the health exchanges still five days away, there's been a steady trickle of glitches in the system, the latest one that the Spanish-language version of the enrollment website for the federal exchanges is being delayed, as is the ability of some small businesses to go online to enroll in their exchanges.

President Barack Obama himself forecast such problems during a recent pep rally-style speech on the health care law in Largo, Md.

The inability of Latinos to begin signing up could be pivotal, given that Hispanics are a key target group for the health care law (PL 111-148, PL 111-152), with an estimated 10 million Latinos not having health coverage.

When it comes to the business sign-up, Health and Human Services (HHS) officials recently issued a news release highlighting the SHOP exchanges. Toward the end of the release they explained the delay.

"Unlike individuals purchasing through the Marketplace, small employers can enroll in insurance plans through the SHOP on a monthly basis throughout the year," the release said. "As such, some states are phasing in SHOP application and enrollment periods. The SHOP Marketplace for Federally-facilitated Marketplace states opens Oct. 1, 2013, when small employers can start the application process and get an overview of available plans and premiums in their area. All functions for SHOP will be available in November and if employers and employees enroll by Dec. 15, 2013, coverage will begin Jan. 1, 2014."

Insurance industry experts have been predicting such problems, pointing to the enormity of the task of standing up these new marketplaces, particularly in getting the systems to interface with the federal data hub that will hold the information exchange officials need to determine eligibility for the federal subsidies and Medicaid.

"I'm expecting more announcements," Robert Laszewski, an industry consultant, told HealthBeat. "I don't mean to be the guy with the dark cloud but there will be many more. I continue to hear from my health insurance clients who are working on this that there are loads of testing problems, lots of bugs" on the federal and state exchanges.

The problems, he said, range from getting the health insurance plans rates correct to concerns that the federal exchange may not be able to transmit who will be in which plan until November. "So people will sign up but insurance companies won't know for weeks," Laszewski said, suggesting that exchanges managers may be waiting to reveal some of the problems "because they so much don't want to put out bad news."

Apparently not all of the business exchanges will be affected by a delay.

"Our SHOP exchange will be fully functional on October 1,'' said Richard Sorian, spokesman for the D.C. marketplace. "Employers will be able to do everything including. Plus we have a secure portal for brokers that will be up soon too."

Some sources said that the technical problems are widespread, with at least a few states said to be waiting to send enrollment information to insurance companies until early November because of systems errors.

A Centers for Medicare and Medicaid Services official declined to comment.

GOP lawmakers and a small business group said the SHOP exchange delay points to bigger problems.

In his speech, Obama predicted that health law naysayers would seize on any glitch in their effort to denounce the law.

"There are going to be some glitches as this thing unfolds," Obama said. "Somewhere around the country, there's going to be a computer glitch and the website's not working quite the way it's supposed to or something happens where there's some error made somewhere.

That will happen. That happens whenever you roll out a new program. And I guarantee you, the opponents of the law, they'll have their cameras ready to document anything that doesn't go completely right, and they'll send it to the news folks, and they'll say, "Look at this, this thing's not working."

"At the exact same time the President was again promising Americans that the health care exchanges were ready to launch, his Administration was announcing another delay," Sen. John Barrasso, R-Wyo., said in an emailed statement. "This is just the latest example of his rhetoric about the law not matching reality. It's clear that the exchanges aren't ready for prime time—and the law isn't working to deliver affordable, high quality care. We need to repeal it and replace it."

At the National Federation of Independent Business, Kevin Kuhlman, head of legislative affairs, said in a statement that, "Every step in the implementation process has seen delays and setbacks; we are certainly not surprised by this one. But with this latest glitch in the small-business exchanges, the case for a delay of the individual mandate alongside the employer mandate only grows stronger. Small-business owners should not be forced to comply with a law that is clearly not ready for prime-time. This is starting to seem like a parody; unfortunately, it is extremely serious."

And Sen. Orrin G. Hatch, R-Utah, said in a statement that, "This law is a disaster, but the exchanges—the heart of the law—are supposed to go live in just five days? Give me a break. This law will never be ready for primetime, because this is what happens when Washington takes over health care. It's time for a permanent delay of this disaster for families, for businesses, for students and for seniors—and I commend House Republicans for including it in their debt ceiling package."

By Rebecca Adams, CQ HealthBeat Associate Editor

September 27, 2013 -- Arkansas recently became the first state to get federal permission to require adults on Medicaid to get their medical care through the health care law's marketplaces. It's a move that could reinvigorate conversations in some other states that have considered asking the Obama administration for a similar waiver.

A number of other states, such as Ohio, are weighing whether to adopt the same type of approach as Arkansas. Others, including Florida and Tennessee, have expressed some interest in the past and could explore the idea further in the future. States such as Iowa and Pennsylvania have already said they want to use similar approaches for at least some of the adults who will qualify for Medicaid under the expansion called for in the health law.

A public comment period on a proposal in Iowa that mirrors the one in Arkansas closed last week. Centers for Medicare & Medicaid Services (CMS) officials are currently in the final stages of reviewing the Iowa plan.

The Arkansas waiver will apply to roughly 225,000 adults with incomes up to 138 percent of the federal poverty line—$15,280 for an individual—who will be eligible to sign up for Medicaid under the health law expansion. These adults will get their insurance coverage through the new marketplaces and their benefits will be paid for with federal Medicaid dollars.

Medicaid recipients in Arkansas are not now enrolled in managed care plans. That means this change will be a more abrupt departure for consumers in that state than it would be in the many other states where Medicaid beneficiaries are already enrolled in managed care plans. The program will require most beneficiaries to be in managed care, although people who are considered medically frail will still be allowed to use fee-for-service Medicaid services without a network.

Emphasis on Flexibility

Federal officials said the approval is an example of how they are trying to encourage states to expand Medicaid through non-traditional ways if that's what it takes.

"We encourage states to come to us with their delivery system ideas, and look forward to continuing to work with states on these," said Cindy Mann, CMS director of the Center for Medicaid and CHIP Services.

"Arkansas and CMS worked together to find flexibilities that gave the state the tools to build a program that worked for them and their residents," said a CMS spokeswoman.

Health and Human Services Secretary Kathleen Sebelius called Democratic Gov. Mike Beebe late last week to tell him his waiver had been approved.

"Arkansas came up with its own plan to expand Medicaid using the private-insurance market, and Secretary Sebelius and her team worked to ensure that we had the flexibility to make that plan a reality," Beebe said in a statement. "Our actions have drawn positive attention from across the country, and now we will focus on getting this insurance to the Arkansans who need it to lead healthier, more productive lives. Hopefully, this bipartisan, intergovernmental achievement can be an example for Congress as the government shutdown looms."

Under the three-year demonstration program that the waiver approves, depending on where in the state they live, Medicaid beneficiaries will be able to choose from three to 11 plans at the silver tier of coverage in the marketplaces.

In Arkansas, people in Medicaid will not pay a monthly premium, but those with incomes that are at least at the federal poverty level ($11,490 for an individual) will be responsible for such cost sharing as copays and deductibles. The cost sharing will be capped at 5 percent of a beneficiary's annual income in both Arkansas and in the proposal put forward in Iowa.

Some consumer advocates are concerned about the level of cost-sharing that people will pay. In future years in Arkansas, cost-sharing will be required for people who have income above 50 percent of the poverty level. In Iowa, state officials want to charge a monthly premium, which advocates worry could discourage people from enrolling.

The Iowa plan focuses on a smaller group of people—about 36,000 people. Its proposal would affect newly-eligible people with incomes between 101 percent and 138 percent of the federal poverty level who do not have affordable employer-sponsored insurance.

Joan Alker, the executive director of the Georgetown University Center for Children and Families, said that her organization is pleased that the Arkansas waiver was approved. But she is still waiting to see a few documents that are expected to be released in the next couple of months, such as a state plan to evaluate the demonstration and the details of the benefits package.

"There are some important details we don't have yet," said Alker.

Benefits for the newly eligible Medicaid population will begin on Jan. 1.

• CMS Blog post

By John Reichard, CQ HealthBeat Editor

September 27, 2013 -- For those who have complained that President Barack Obama has allowed his critics to dominate what the public hears about the health care law for months, if not years, his recent appearance at Prince George's Community College in Maryland was no doubt music to their ears.

Two days earlier, Obama began talking at length about the overhaul, perhaps addressing critics who accuse him of sitting on the sidelines for too long. But at the conversation with former President Bill Clinton in New York City, Obama was professorial and at times halting in long explanations of its policy basis of the law before an arguably odd target audience—international leaders.

But last week, Obama was the down-to-earth and impassioned politician, displaying the style that helped him win the White House twice. No longer was he keeping the health care law (PL 111-148, PL 111-152) at arm's length. Rather, he fully embraced it in remarks going right at the demographic—young adults, many of them of color—that will be crucial to whether the insurance exchanges opening this week will succeed in the long run.

But if Obama's spirited remarks suggest he is getting back in campaign mode and becoming re-energized in support of the law, Republicans also appear to be increasingly confident that in the coming week they will have they have a shot at derailing it.

Former Bush administration budget official James Capretta suggests in a column in the Weekly Standard that Republicans can build on the implementation delays the Obama administration has already announced and continue to push for a broader delay of the overhaul.

It's debatable whether, over time, having a polarizing figure like Obama pitching the exchanges is going to help or hurt turnout at marketplaces across the country, particularly in red states.

But without such an effort by top Democrats, it's unclear what else would begin bringing people to the exchanges in large enough numbers to assure the success of the marketplaces as the law's popularity slumps further amid withering Republican attacks.

In Prince George's County, Obama sought to redirect that negative energy back on his attackers by joking that they'll stop using the term "Obamacare" if the exchanges work. And he talked at length about the chance the marketplaces give millions of people for the first time to be part of big groups that get better, more affordable coverage.

Safety in Numbers

"If you're not part of a group, you're either uninsurable, or you need to spend a small fortune on insurance that oftentimes is not very good," he said. "That's what's happening right now. The Affordable Care Act was designed to solve that problem."

Maryland's exchange is drawing attractive bids from insurers because it is creating a big pool, he said. "Here in Maryland, [the] average 25-year-old making $25,000 a year could end up getting covered for as little as $80 a month, $80 a month." Insurers "proposed these prices because they want to get in with these big groups, with all these new customers.

"Think about that," he added. "Good health insurance for the price of your cell phone bill, or less."

"If you buy health care through the marketplace, your plan has to cover free checkups, flu shots, contraceptive care. So you might end up getting more health care each month than you're paying for the premiums," Obama said.

"We created a new market—basically a big group plan—for folks without health insurance so that they get a better deal, and then we're providing tax credits to help folks afford it," Obama said.

"You would think that would not be so controversial," Obama said, drawing laughter.

"Here is a prediction for you," Obama added. "A few years from now, when people are using this to get coverage and everybody is feeling pretty good about all the choices and competition that they've got, there are going to be a whole bunch of folks who say, yes, I always thought this provision was excellent. I voted for that thing. You watch. It will not be called Obamacare.

"But we need you to spread the word," Obama exhorted. "Tell your friends, tell your classmates, tell your family members about the new health care choices. Talk to folks at your church, in your classroom. You're going to a football game, basketball game -- talk to them. Tell them what the law means. "

No Sale

But Republicans have leverage of their own in the current budget battles. And they see growing support within the party for a strategy that focuses not on a government shutdown to stop the health law, but a delay. That could prevent Obama's vision of a vibrant health care law marketplace from ever coming to pass.

Obama will soon weary of funding government through small stopgap measures, Capretta predicted in his Weekly Standard column.

"At some point, therefore, the president will want to cut a deal with House and Senate Republican leaders to take budget uncertainty off the table for at least one year," Capretta wrote.

"So the question is, when that time comes—probably in the days leading up to the holiday season in December—what should be the top priority of the GOP? Both for substantive and political reasons, Republicans should make it clear that their main objective is to delay as much of Obamacare as possible."

Capretta said the strategy is an attractive one because of delays that already have occurred, such as the employer mandate and the limits related to out of pocket spending. The idea of delaying other aspects of the law, given what he says is a growing sense that the overhaul is not ready for prime time, will not be seen as "politicized" but reasonable, he argues.

"If all or crucial parts of Obamacare are delayed, then the signature legislation of Obama's presidency will look anything but inevitable—and if it can be delayed once, it can be delayed again and again, and then repealed," Capretta said.

Early stumbles in the start of exchanges "could be more than just glitches," says Scott Gottlieb, a scholar with the American Enterprise Institute. "We could have the specter of some really significant data security issues," he said in an AEI-sponsored telephone press briefing last week.

If there are a lot of revelations that people have lost private data in trying to shop on exchanges, people "are going to start pulling away" from the marketplaces, he said. Other aspects of exchanges could prove unpopular, he suggested. Gottlieb also said that many of the plans offered on exchanges are narrow network plans, and predicted that this limited network model could migrate out into the broader marketplace.

But Gottlieb and AEI analysts Tom Miller and Joseph Antos downplayed the chances that exchanges won't ultimately get up and running, at least for a while, or that major parts of the law will be delayed. Absent big data security problems, Gottlieb said he expects the exchanges "will be self-sustaining."

Gottlieb suggested that with gains in future elections Republicans could focus on changes, such as having a broader array of plans on exchanges, eliminating the individual mandate, and scaling back subsidies.

Miller said that if exchanges are still around in 2105 and 2016 there will be a push to liberalize rules on what benefits plans can offer in exchanges.

Antos said exchanges can be expected "to limp along. The fact is that insurance companies have a lot at stake. They want something to work." But over time subsidies will not keep up with rising premiums, he said. And he forecast that those rates will rise sharply in 2015 and that companies will drop out of exchanges.

By Rebecca Adams, CQ HealthBeat Associate Editor

September 27, 2013 -- The first look at health insurance landscape in the federally run marketplaces reveals a system where premiums are lower-than-projected and the choice of plans for consumers varies widely by state.

Health and Human Services officials say that premiums in the 36 exchanges that federal officials will operate or will run in partnership with some states are about 16 percent lower than originally projected.

In those marketplaces, the number of health insurance companies selling coverage will range from one to a high of 13, according to a report federal officials recently released. About 95 percent of the people under the age of 65 in the 36 states live in areas with two or more insurance plan choices, said the report. Each insurer will offer more than one type of health plan, and people will have anywhere from six to 169 choices as they sift through different plans that are classified like metals, with platinum covering about 90 percent of health care costs at the high end and bronze plans covering about 60 percent of costs.

The report did not include an average premium rate for the federal exchanges, but did include a weighted average of the rates for people of all ages in all the state-run and federal exchanges in 47 states and the District of Columbia. Their calculations show that the average monthly premium for a bronze plan is expected to be $249. The average for second-cheapest silver plan—the option that federal subsidies are based upon—is $328 per month. Three states—Hawaii, Massachusetts and Kentucky—did not report their data to HHS in time to be included.

Although the report did not compare rates in the federal marketplaces to those in exchanges run by the states, it said that state-run marketplaces "tend to have greater issuer participation," which drives down rates, than federal exchanges.

HHS also acknowledged that the rates still could change slightly before the new marketplaces open in one week, on Oct. 1. And averages don't tell the whole story in a nation where coverage will vary significantly—even within a state.

Even before the data were revealed, lawmakers on both sides of the aisle put out statements about rates in the exchanges.

"The closer we get to the health law's launch next week, the more reports that confirm the sad and expensive reality of the looming rate shock set to strike millions of folks, young and old," said House Energy and Commerce Chairman Fred Upton, R-Mich. "Such rate shocks threaten to devastate the budgets of families who are still struggling to get back on their feet."

House Minority Leader Nancy J. Pelosi, D-Calif., issued a statement on the rate report. "As health insurance marketplaces come online, we must act to ensure that the protections of the law strengthen all the health and health care of all Americans—and that partisan distractions are not allowed to undermine the health and economic security of the American people," Pelosi said.

The numbers in the report underscored the wide variability in premiums, which have been evident in previous projections.

HHS officials said the report summarizing rates is the only information that consumers will have before Oct. 1. At that point, consumers can go online to find out rates specific to them, said Director of the Center for Consumer Information and Insurance Oversight Gary Cohen. Some of those rates may differ significantly from the information the administration provided in the report.

People will be able to search for plans only offered by a specific insurance company if they want, Cohen said.

"Consumers can do side-by-side comparisons and can select traits they want to see" in plans, he said.

Federal officials also said they are not concerned about reports that some insurers are keeping rates low by creating narrow networks of doctors and hospitals. Insurers don't have as much leeway as they have in the past to structure benefits because they have to comply with the law's requirement to offer 10 categories of essential health benefits, so many companies are creating tight networks of providers as a way to try to lower costs.

The trend of restrictive networks began before the passage of the health care law (PL 111-148, PL 111-152), Cohen told reporters, and he said he trusts state insurance regulators to meet the federal law's requirement that they make sure that the networks are adequate. Networks are supposed to be "sufficient in number and types of providers, including providers that specialize in mental health and substance abuse services, to assure that all services will be accessible without unreasonable delay."

Regulators "don't want to get a bunch of phone calls from people who have health coverage but can't get health care," he said.

The report did not spell out which insurers will participate in each state. Federal officials have already acknowledged that the nation's largest insurance companies, including United HealthGroup, Cigna, and Aetna—which currently are big players in large group markets but not the individual market—will only offer coverage in a relatively small number of exchanges. That compares with Blue Cross Blue Shield plans, which are likely to be offered in most of the exchanges in the individual market.

Roughly 95 percent of uninsured people who might qualify for marketplace coverage live in states with lower-than-expected premiums, said federal officials.

Federal officials said they are pleased with the results.

"We are excited to see that rates in the marketplace are even lower than originally projected," said HHS Secretary Kathleen Sebelius. "In the past, consumers were too often denied or priced-out of quality health insurance options, but thanks to the Affordable Care Act consumers will be able to choose from a number of new coverage options at a price that is affordable."

The numbers provided by the administration show relatively low costs for single people choosing the bronze plans, but those may not ultimately be the best deal for consumers, depending on their medical costs and income. People who choose silver plans will have lower cost-sharing, such as co-pays and deductibles. And people whose income is up to 250 percent of the federal poverty limit can get additional subsidies to help with those out-of-pocket costs if they choose a silver plan.

Before subsidies are considered, a family of four would pay monthly premiums for the second-cheapest silver plan ranging from $584 in Tennessee and $600 in Arizona on the low end to $1,131 per month in Alaska and $1,237 in Wyoming on the high end, according to the report. While subsidies will bring down those costs, some families whose income is just above the level that would get a subsidy could find the costs high if they have recently lost employer-provided insurance. An annual survey by the nonpartisan Kaiser Family Foundation found that in 2013, the average cost of family coverage through employers was $16,351 per year, but workers only saw $4,565 in annual costs deducted from their paychecks because the companies picked up the rest of the tab. The Congressional Budget Office has estimated that about seven million people will sign up for coverage in the first year. It is unclear whether the lower-than-projected premiums will attract more people to buy coverage on the exchanges than estimated, or whether negative publicity from critics, early potential technical snafus and a lack of awareness among the uninsured about how to enroll might lead to lower enrollment than expected.