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Monday, January 31, 2011

Health reform poll: don't cut off funding

Conservatives sometimes argue that the best way to combat what they see as intrusive government regulation is to "starve the beast": use the Congressional power over spending to cut off funding for the government programs they find objectionable. Critics of health reform have advocated (loudly) for that strategy.

But what's America's reaction to that approach? "Not so fast," according to one poll. The majority of Americans (62%) oppose the idea of Congress using defunding efforts to slow down the implementation of the Patient Protection and Affordable Care Act (ACA), according to a new poll from the Kaiser Family Foundation and the Harvard School of Public Health.

The poll, The Public's Health Care Agenda for the 112th Congress, found that 57% of Republicans favor defunding health reform in the absence of repeal, but most independents are opposed (62%) along with the great majority of Democrats (84%). And, even among those who do not like the law and want to see it repealed, almost four in ten say they disapprove of cutting off funding.

Opinions remain divided. The poll reported that 50% of Americans hold an unfavorable opinion of the ACA, while 41% hold a favorable view. However, the public is divided on what should happen next.



Nearly as many people want to expand the law (28%) or keep it as it is (19%), as want to repeal and replace the law with a Republican-sponsored alternative (23%) or simply repeal it (20%). Kaiser noted that opinions about what should happen next remain highly partisan: 77% of Republicans back some form of repeal, while 51% of Democrats said they want the law expanded.

According to Kaiser, though the public is divided on what should happen next with the ACA, this does not mean that they want Congress to stop working on health care. When asked about the top two issues they would like addressed by the President and Congress in 2011, health care (46%) and the economy (40%) were the top two issues cited by survey respondents. The third most cited issue, the deficit, was cited by only 13% of respondents.

The survey was conducted January 4 through 14 and includes responses from 1,502 individuals ages 18 and older.

For a comprehensive analysis of the Patient Protection and Affordable Care Act, and additional information on health reform and other developments in employee benefits, just click here.

Friday, January 28, 2011

Arizona's Brewer has thrown down the gauntlet - will Sebelius pick it up?

There’s apparently at least one way to circumvent some provisions of the healthcare reform act while, at the same time, making the new law seem detrimental to those seeking Medicaid coverage and putting the current administration on the spot - simply ask the government’s permission to cut Medicaid spending in your state. Instructions for doing so are built right into the ACA. Arizona is now trying to do just that, and other states may follow.

To qualify for federal reimbursement for their Medicaid programs, state Medicaid plans may not have any eligibility standards or restrictive determinations of eligibility that were not in effect on the date of enactment of the ACA. There is an exception until January 1, 2014, however, for this “maintenance of effort” standard for states with budget deficits that certify to HHS that they have a deficit for the current fiscal year or are projected to have one for the following year. For those states, the maintenance of effort requirement will not apply to determinations of eligibility for non-pregnant and/or non-disabled adults with incomes above 133% of the federal poverty level.

Now, Arizona governor Jan Brewer wants to be the first to obtain the exception.
 On January 21, 2011, she signed state legislation authorizing her to make a two-year waiver request from the ACA’s maintenance of effort eligibility requirements. Subsequently, on January 25th, she sent a letter to HHS Secretary Kathleen Sebelius requesting the waiver. It’s hard to believe that this doesn’t put Sebelius in a difficult position, since she will probably be criticized regardless of her decision. In her letter, Brewer painted a dire picture of her state’s finances, claiming that Arizona’s Medicaid program represents approximately 30% of the state’s General Fund spending. On the other hand, by granting the waiver, Sebelius will make it possible for Brewer to eliminate or drastically reduce coverage to approximately 280,000 people.

For a comprehensive analysis of the Patient Protection and Affordable Care Act, and additional information on health reform and other developments in employee benefits, just click here.

Wednesday, January 26, 2011

Health care reform is subject to never-ending Congressional games

The so-called repeal of the healthcare reform act is turning into a game of chess in Congress.
To begin with, Republicans may have an even tougher time repealing the ACA than they thought they would. Democrats have made clear that there will have to be a separate vote on individual portions of the healthcare reform law each time a bill to repeal it is introduced.

"If the Republicans offer an amendment on the floor, then we will require them to vote on the individual protections in the bill that are very popular and that even some of the new Republican House members have said they support," Senator Chuck Schumer (D-NY) said this week on CBS’ Face the Nation.

"Mitch McConnell has the right to offer an amendment," said Schumer, adding that, “If he does, if the Republicans offer an amendment on the floor, then we will require them to vote on the individual protections in the bill that are very popular, and that even some of the new Republican House Members have said they support.”

Some have accused Republicans of merely posing in their attempt to repeal the ACA, knowing that repeal will not really work, especially since President Obama has said that he would veto a repeal. Along those lines, Schumer told CBS that, "I think, at the end of the day, their effort to repeal is not going to work at all . . . . So we should work together to improve the bill, but this idea of repeal is not going to work."

Now, according to Greg Sargent of the Washington Post, Senate aides say Republicans may, in return, demand a vote by Democrats on certain portions of the PPACA that Republicans have termed "job killers," since Republicans have consistently sent the message that the PPACA is detrimental to the American job market. One such provision imposes an excise tax on medical device manufacturers, the cost of which the manufacturers warn could result in worker layoffs. A number of public comments on Sargent’s article complained that Congress was wasting time playing games, instead of spending time on other issues, such as the war in Afghanistan, global warming, the national deficit, and job creation.

For a comprehensive analysis of the Patient Protection and Affordable Care Act, and additional information on health reform and other developments in employee benefits, just click here.

Monday, January 24, 2011

Under Act for the Relief of Sick and Disabled Seaman, health care purchase has been mandated before

Much was made last week of the post by Rick Ungar over at Forbes.com, pointing out that John Adams proposed in 1798, and Congress passed, a law mandating that merchant marine sailors pay a tax to support a system of government-operated marine hospitals, which Ungar likened to the ACA’s individual mandate that everyone purchase health insurance.

Fans of the health reform act have happily pointed out that this should negate the main argument of those who are against the individual mandate – that the government does not have the right to force anyone to purchase anything. Previously, comparisons had been made by those on the left to the purchase of car insurance, which you must buy in order to be in legal compliance, but, as conservatives have argued, only if you drive. By comparison, the individual mandate of the ACA requires every citizen, merely because they are citizens, to purchase health insurance. Now, it appears that Congress, with the approval of both Thomas Jefferson and John Adams had previously passed a similar mandate, making it hard to argue that the ACA is unconstitutional. But, should liberals be rubbing their hands with glee yet?

Conservatives have already tried to punch holes in Ungar’s argument, pointing out that the "Act for the Relief of Sick and Disabled Seaman" was different from the ACA because it was merely a payroll tax. In response, those on the left have responded that the seamen were paying taxes in exchange for government-run health care. As Ezra Klein, of the Washington Post, notes, “. . . it was, in essence, a regulation against a form of inactivity: You were not allowed to not do something, in this case, pay for sailor's health insurance.”

Additional responses from the right have included the point that the tax only targeted one segment of society, and that it shouldn’t be compared to the ACA, which covers every citizen. Ungar has countered that argument by asking “. . . how many classifications of the population do you believe can be mandated to do something and remain within Constitutional limits?” It would be hard to argue that it would be constitutional for only certain segments of the population, or those in certain professions, to be mandated to do something, Ungar adds.

It could also be pointed out that the sailors made the decision to become sailors, and that they always had the option to do so, making what was, effectively, a payroll tax to fund their healthcare optional, not mandatory. On the other hand, I suppose it could be argued that one could always have the option of giving up citizenship.

It is perhaps worthy of note that the purpose for instituting the Act for the Relief of Sick and Disabled Seaman was similar to the reasoning behind an October 2010 ruling by the Eastern District of Michigan in Thomas More Law Center v. President of the United States (No. 2:10-cv-11156). The Seaman’s Act was passed because, since sailors were in a dangerous profession, there was no way to know when, or to what degree, they would be badly injured and in need of health care. In Thomas More, the court pointed out that the health care market is different from other markets, in that no one can ever ensure that he or she will never need drastic medical care.

It will be interesting to see if Ungar’s column will have any effect on upcoming rulings challenging the ACA. Back in December, in Commonwealth of Virginia v. Sebelius, Judge Henry E. Hudson held that the ACA’s individual mandate is unconstitutional, stating in his opinion that “Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market. In doing so, enactment of the Minimum Essential Coverage Provision exceeds the Commerce Clause powers vested in Congress under Article 1, ” adding that, “. . . an individual’s personal decision to purchase — or decline to purchase — health insurance from a private provider is beyond the historical reach of the Commerce Clause . . .” So, will the debate about the 1798 law show up in upcoming pleadings, one wonders?

For a comprehensive analysis of the Patient Protection and Affordable Care Act, and additional information on health reform and other developments in employee benefits, just click here.

Friday, January 21, 2011

House Repeals, But We Want Our Benefits

Well, as expected, House Republicans yesterday passed a largely symbolic bill to repeal the Patient Protection and Affordable Care Act. The “Repealing the Job-Killing Health Care Law Bill” (HR 2) passed the House by a vote of 245-to-189. The measure is not expected to pass the Senate or survive a veto by President Barack Obama.

GOP lawmakers dubbed the new law the "job-killing Obamacare" and a "government takeover of health care" that would destroy state budgets, raise premiums for small businesses and cut Medicare benefits for seniors. Republicans said that several House committees would begin drafting replacement legislation to ensure that popular patient benefits in the new law would still be available to Americans.

Senate Republicans are likely to stick to the House Republican plan to dismantle health care reform legislation piece by piece. One piece of reform that is considered likely to be repealed in the near future is the new Form 1099 reporting rules, which go into effect in 2012 and require businesses that spend more than $600 with a specific vendor to report the expenditure to the IRS. Lawmakers from both parties and the White House agree the paperwork burden is too onerous. The White House supports repealing the 1099 reporting requirement for small businesses, noted an administration source.

Past efforts to repeal the Form 1099 provision failed over disagreements on how to make up the $17 billion the measure was expected to raise to help pay for health care reform. Once both chambers reach accord on a suitable revenue offset, it is likely to pass quickly and smoothly. House Republicans have already introduced the bill repealing the tax requirement (Small Business Paperwork Mandate Elimination Bill of 2011 (HR 4)), indicating that it will be one of their first pieces of business. Sen. Mike Johanns, R-Neb., and Joe Manchin, D-W.Va., have said they would introduce 1099 repeal legislation on January 25.

I’ll Take My ACA Benefits, Thank You

Meanwhile, the Department of Health and Human Services has announced that three million Medicare beneficiaries who reached the drug coverage gap, or “donut hole”, during 2010 have received a one-time, tax-free $250 rebate check, courtesy of the ACA.

And countless young adults between ages 19 and 26 who are not currently attending school, including my son and the children of other colleagues and friends, are now covered under their parents’ work-related health insurance policies. These are healthy young people, but accidents and illness can strike at any time and they, like older adults and younger children, need the medical and financial protection, too.

Furthermore, as of the end of October 2010, nearly 3,600 employers and unions had been approved to participate in the ACA’s Early Retiree Reinsurance Program, including many states among those fighting implementation of the ACA. The program reimburses employers for a portion of the cost of health benefits for early retirees’ and their families.

In addition, states have been receiving grants from HHS to establish health insurance exchanges, which when the ACA is fully implemented in 2014, will provide individuals and small businesses with a “one-stop shop” to find and compare affordable, high-quality health insurance options.

And, how many people do we all know, including us, who have even minor preexisting medical conditions that, without the ACA, would limit or totally exclude us from individual health insurance coverage?

For a comprehensive analysis of the Patient Protection and Affordable Care Act, and additional information on health reform and other developments in employee benefits, just click here.

Wednesday, January 19, 2011

Repeal Of Health Reform Would Take Us Back

As House Republicans today push for repeal of the Patient Protection and Affordable Care Act (ACA), a new Department of Health and Human Services (HHS) study shows that without the ACA’s protections up to 129 million non-elderly Americans with pre-existing health conditions would lose their health insurance or be denied coverage altogether.

The HHS report “At Risk: Pre-Existing Conditions Could Affect 1 in 2 Americans” warns that “Repealing the law would once again leave millions of Americans worrying about whether coverage will be there when they need it.”

The HHS analysis found the following:

• Between 50 and 129 million (19% to 50%) of Americans under age 65 have some type of pre-existing condition such as heart disease, high blood pressure, arthritis, asthma, and cancer. The highest rates of those with preexisting conditions, ranging from 21% to 54%, are among those with employer-sponsored insurance. However, 32 to 82 million people with both health problems and job-based coverage would be vulnerable without the ACA, which lifts limits on annual and lifetime benefits.
• Older Americans between the ages of 55 and 64 are at particular risk of preexisting conditions; 48% to 86% of people in that age bracket have a pre-existing condition.
• 15% to 30% of people under age 65 currently in good health, reporting very good or excellent health with no chronic conditions, are likely to develop a pre-existing condition over the next eight years.
• Up to one in five Americans under age 65 with a pre-existing condition – 25 million individuals – is uninsured.

Prior to the ACA, in the vast majority of states, insurance companies in the individual market could deny coverage, charge higher premiums, and/or limit benefits based on pre-existing conditions. Surveys have found that, due to preexisting conditions, 36% of Americans who tried to purchase health insurance directly from an insurance company in the individual insurance market encountered challenges purchasing health insurance.

A number of ACA protections already are in place. For example, insurers can no longer limit lifetime coverage to a fixed dollar amount or take away coverage because of a mistake on an application. Young adults have the option of staying on their parents’ coverage up to the age of 26 if they lack access to job-based insurance of their own, and insurers cannot deny coverage to children because of a pre-existing condition.

Many uninsured Americans with pre-existing conditions have already enrolled in the temporary high-risk pool program called the Pre-existing Condition Insurance Plan (PCIP), which provides private insurance to those previously excluded from the insurance market because of a pre-existing condition. The PCIP program is an interim measure until 2014, when insurance companies can no longer deny or limit coverage or charge higher premiums because of a pre-existing condition.

In addition to the ban on discrimination against people with preexisting conditions, in 2014, individuals and small businesses will have access to new, high-quality insurance choices through health insurance exchanges.

We can only hope that those bent on "repeal" of health reform will recognize the good aspects of the law and focus instead on improving it.

More information about provisions of the Patient Protection and Affordable Care Act is available here.

Monday, January 17, 2011

States Begin Applying Health Reform Insurance Provisions

Some states have already started applying certain rights and responsibilities assigned them by the Patient Protection and Afordable Care Act (ACA). States’ focus largely has been on monitoring and restraining insurers’ premium rate increases and in establishing health insurance exchanges.

In California, the state’s insurance commissioner, has asked Blue Shield of California to delay by 60 days a rate increase for nearly 200,000 policyholders. For some, the rate increase could be as high as 59%. It would be the third hike since last fall. Currently, the state does not have the authority to stop health insurers from increasing premiums, but a bill in the state legislature would require health insurers to receive approval from the state before raising premiums.

The Connecticut department of insurance rejected as “excessive” a 20% rate increase requested by Anthem Blue Cross and Blue Shield, the state’s largest health insurer. The premium increase would have affected 48,000 consumers. This is the first time that the state has flatly rejected a rate increase.

The Iowa Health Care Coverage Commission has voted 10-1 in favor of having the state form a health insurance exchange. The initial version of Iowa’s insurance exchange will offer basic information about prices and coverage of health insurance policies to help individuals and small businesses purchase insurance. Under the ACA, if states decline to set up their own exchanges, the federal government will do it for them.

The Health Reform Coordinating Council in Maryland, created through an executive order, issued a report recommending the creation of a Governor’s Office of Health Reform to guide the state’s implementation of the ACA and oversee the state’s new health insurance exchange. The Council also recommended that the health insurance exchange be established as an independent public entity, rather than as a private nonprofit entity.

South Dakota residents have access to a state-developed website with information about the ACA. The site is a resource for consumers, employers, and stakeholders in health care and outlines the initial steps the state government is taking to implement the federal law.

The Washington state insurance commissioner plans to ask state legislators to preserve the commissioner’s authority to approve health insurance rates, boost transparency, and to allow the insurance department to consider some insurers’ surpluses when reviewing rates. Currently, the state insurance department is not allowed to consider an insurer’s surplus, including investment income, when reviewing a rate request. The surplus proposal would apply only to nonprofit insurers, which account for most of the health insurance market in Washington. Specifically, the commissioner proposes denying rate hikes when a company amasses a surplus equal to three months of claims expenses. However, exceptions to that rule may be granted if limiting a rate increase threatens an insurer’s financial health. The state insurance department also would like to add more transparency to the rate-review process, insurers’ finances, and medical trends.

Wyoming has begun working on a plan to provide health insurance to the 86,000 uninsured individuals in the state. A 17-member task force has started work on the job of recommending a plan for the state’s health insurance exchange, which will go into effect in 2014 as a part of the ACA. Health insurance exchanges will lead to lower costs and increased competition, according to supporters.

More information about provisions of the Patient Protection and Affordable Care Act is available here.

Friday, January 14, 2011

Biggest health reform fears of employees, employers revealed

What part of 2010’s health reform legislation worries you the most? According to a recent survey by HighRoads, a benefits consulting/compliance firm, the answer depends on whether you’re an employee or an employer.

Employees worry most about rising costs, cancelled coverage or new taxes on medical benefits, the survey found, while employers are most concerned about the lack of federal guidance on what requirements must be communicated to employees.



 “There appears to be a healthy skepticism on the employer’s part about the content and timing of guidance from the federal government on how to administer and communicate future plan changes,” said Kim Buckey, practice lead, SPD Services, HighRoads. “While most employers increased their communications efforts during the fall open enrollment period to communicate changes required by health care reform, there are still doubts about how effective those communications were. There is clearly an opportunity to do some follow up communications—based on the actual employee elections during open enrollment—or employee sensing (surveys or focus groups) mid-year to determine whether employees truly understood the impact of the year’s plan changes.”
What employees fear. The biggest concerns human resources professionals and benefits managers are hearing from employees about how health care reform affects them include: 
  • Increased cost of coverage: 50%
  • Cancellation of benefits: 13%
  • Government taxation of medical benefits: 13%
  • Ability to add adult dependents: 12%
  • No real concerns: 12%
While 88% of employers reported that they had increased their employee communications to address health care reform, many were still worried that the communications might not have been enough. The biggest communications concerns employers have around health care reform for the coming year include:
  • Lack of federal guidance on what the requirements are or how any changes in guidance during the year might change what has been communicated to employees: 25%
  • The disconnect on cost and existing plans, since the bill was sold on being cost neutral to tax payers and the assurance that employee would not lose the coverage they currently have: 13%
  • Making sure employees are told everything that is changing under their plans: 13%and
  • Employee understanding of changes and how the changes affect them: 12%

For a comprehensive analysis of the Patient Protection and Affordable Care Act, including the full text of the law and additional information on health reform and other recent developments in employee benefits, just click here.


                                                                                                                                                                                              

 



 

Wednesday, January 12, 2011

Baby Boomers most likely to benefit from health reform provisions, survey finds

Effective 2014, when most of the provisions of the Patient Protection and Affordable Care Act (ACA) take effect, nearly one-fifth of the uninsured gaining health coverage will be adults between the ages 50 and 64, according to a new analysis from the Commonwealth Fund, Realizing Health Reform's Potential: Adults Ages 50-64 and the Affordable Care Act of 2010.

Up to 6.8 million of the 8.6 million adults in the age group of 50 to 64 were uninsured in 2009, and they may gain subsidized insurance through Medicaid (3.3 million in families earning less than 133% of the federal poverty level (FPL)) and through the new health insurance exchanges (3.5 million earning less than 400% of FPL). An additional 1.4 million individuals with higher incomes will have access to comprehensive health plans with new consumer protections. Another estimated 9.7 million adults in this age group with health insurance having such high out-of-pocket costs that they are considered underinsured would have access to more comprehensive benefit packages and more cost protection, the Commonwealth Fund noted.



Sixteen states with uninsured rates higher than the national average of 14.2% for adults in the studied age group in 2008 and 2009 will see particularly large gains in insured rates. The states are: Florida, New Mexico, and Texas, where at least one-fifth of the population in this age group were uninsured; Alaska, Arizona, California, Georgia, Nevada, and Wyoming, where 16.5% to 18.2% were uninsured; Louisiana, Mississippi, Montana, Oklahoma, and Tennessee, where approximately 15% were uninsured; and North Carolina and South Carolina where approximately 14% were uninsured.

The age 50 through 64 year group, which is more prone to chronic health conditions (64% were reported to have at least one chronic condition in 2007), is most vulnerable to unemployment and to lack of employment-related health insurance in the current economic climate. The Commonwealth Fund Biennial Health Insurance Survey found that of the adults ages 50 to 64 who purchased or tried to buy a health plan on the individual insurance market, 45% and 61%, respectively, found it difficult or impossible to find a plan that met their needs or that they could afford, and 39% were declined, charged a higher premium, or had a preexisting condition exclusion. Nearly 70% of older adults never bought a plan, the Commonwealth Fund reported. These uninsured older adults will avoid or delay getting needed health care (75% reported this in the Commonwealth Fund survey) and preventive screenings (46%).

For a comprehensive analysis of the Patient Protection and Affordable Care Act, including the full text of the law and additional information on health reform and other recent developments in employee benefits, just click here.

Monday, January 10, 2011

IRS clarifies use of FSA debit cards on OTC drugs

The IRS has issued new guidance allowing the continued use of health flexible spending arrangement (FSA) and health reimbursement arrangement (HRA) debit cards for the purchase of prescribed over-the-counter medicines and drugs.

The new guidance, IRS Notice 2011-5, modifies previous guidance to permit taxpayers to continue using FSA and HRA debit cards to purchase over-the-counter medications for which the taxpayer has a prescription. Effective after January 15, 2011, in accordance with the new guidance, this use of debit cards must comply with procedures reflecting those that pharmacies currently follow when selling prescribed medicines or drugs.






The procedures include requirements that a prescription for the medication must be presented to the pharmacy or the mail-order or web-based vendor that dispenses the medication and that proper records must be retained.

In accordance with the Patient Protection and Affordable Care Act (PPACA), the cost of over-the-counter medicines or drugs can be reimbursed from a health FSA or HRA if a prescription has been obtained. The requirement to obtain a prescription does not apply to insulin.

The prescription requirement applies to purchases made on or after January 1, 2011, and not to purchases made in 2010 even if reimbursed after December 31, 2010. Because the requirement applies only to over-the-counter medications, it does not apply to other health care expenses such as medical devices, eye glasses or contact lenses.

The new guidance, IRS Notice 2011-5, also contains further details on health FSA and HRA debit card purchases, including purchases from health care providers other than pharmacies and mail order and web-based vendors.

For a comprehensive analysis of the Patient Protection and Affordable Care Act, including the full text of the law and additional information on health reform and other recent developments in employee benefits, just click here.

Friday, January 7, 2011

Health Reform Repeal, Defund Efforts Begin; CBO Says Repeal Will Increase Deficit By $145 Billion


On Jan. 5, the first day of the 112th Congress, Representatives introduced ten bills to repeal or defund the Patient Protection and Affordable Care Act (ACA). The House is expected to vote on one of the repeal bills next week week, H.R. 2, Repealing the Job-Killing Health Care Law Act, sponsored by Rep. Eric Cantor (Va.).

Senate Majority Leader Harry Reid (Nev.) already has noted that the health reform law will not be repealed, given the Democratic majority in the Senate.

Nonetheless, the philosophical battle regarding health reform has begun.  As noted in the title of H.R. 2, Republicans are attacking the potential job losses among small employers once the individual mandate takes effect in 2014. The Democrats are likely to use, at least in part, the argument that repeal would increase the deficit and do nothing to reduce the uninsured.

In response to the expected vote next week, the Congressional Budget Office on Jan. 6 released a preliminary analysis of H.R. 2, which describes “the effects that repealing [ACA] and the relevant provisions of the Reconciliation Act would have on federal budget deficits, the federal government’s budgetary commitment to health care, the number of people with health insurance, and health insurance premiums in the private market.”

As a result of changes in direct spending and revenues, CBO expects that enacting H.R. 2 would probably increase federal budget deficits over the 2012–2019 period by a total of roughly $145 billion, plus or minus the effects of technical and economic changes that CBO will include in the forthcoming estimate. Adding two more years (through 2021) brings the projected increase in deficits to something in the vicinity of $230 billion, plus or minus the effects of technical and economic changes.

New House Speaker Rep. John Boehner (Ohio) has repudiated the forecast of the CBO, saying that its analysts had relied on flawed assumptions they had been provided by Democrats. "CBO is entitled to their opinion," said Mr. Boehner. In general, CBO final budgetary analyses of legislation are accepted by Congress as the official predictor of budgetary effects.

The CBO projections do not include any potential savings in discretionary spending, which is governed by annual appropriation acts. By CBO’s estimates, repeal of the health care legislation would probably reduce the appropriations needed by the Internal Revenue Service by between $5 billion and $10 billion over 10 years. Similar savings would accrue to the Department of Health and Human Services.

Under H.R. 2, about 32 million fewer nonelderly people would have health insurance in 2019, leaving a total of about 54 million nonelderly people uninsured, according to the CBO. The share of legal nonelderly residents with insurance coverage in 2019 would be about 83%, compared with a projected share of 94% under current law.

Effects On Health Insurance Premiums

According to the CBO analysis, if H.R. 2 was enacted, premiums for health insurance in the individual market would be somewhat lower than under current law, mostly because the average insurance policy in this market would cover a smaller share of enrollees’ costs for health care and a slightly narrower range of benefits. Although premiums in the individual market would be lower, on average, under H.R. 2 than under current law, “Many individuals would end up paying more for health insurance—because under current law, the majority of enrollees purchasing coverage in that market would receive subsidies via the insurance exchanges, and H.R. 2 would eliminate those subsidies,” writes the CBO.

Premiums for employment-based coverage obtained through large employers would be slightly higher under H.R. 2 than under current law. In addition, according to the CBO, “Premiums for employment-based coverage obtained through small employers might be slightly higher or slightly lower (reflecting uncertainty about the impact of the enacted legislation on premiums in that market).”

Repeal Or Defund Proposals

These are the repeal or defunding bills introduced on Jan. 5.

H.R.2: Repealing the Job-Killing Health Care Law Act. Sponsor: Eric Cantor (Va.). Referred to the Committee on Energy and Commerce, and the Committees on Education and the Workforce, Ways and Means, the Judiciary, Natural Resources, Rules, House Administration, and Appropriations.

H.R.21: To amend the Internal Revenue Code of 1986 to repeal the mandate that individuals purchase health insurance. Sponsor: Scott Garrett (N.J.). Referred to the House Committee on Ways and Means.

H.R.38: To rescind funds appropriated to the Health Insurance Reform Implementation Fund under the Health Care and Education Reconciliation Act of 2010.Sponsor: John Fleming, (La.). Referred to the House Committee on Energy and Commerce.


H.R.105: To repeal the Patient Protection and Affordable Care Act and related health-care provisions and to enact in its place incentives to encourage health insurance coverage, and for other purposes. Sponsor: Dan Burton (Ind.). Referred to the Committee on Energy and Commerce, and the Committees on the Budget, Education and the Workforce, Natural Resources, House Administration, Ways and Means, the Judiciary, Rules, Appropriations, and Oversight and Government Reform.

H.R.118: To amend the Patient Protection and Affordable Care Act to permit a State to elect not to establish an American Health Benefit Exchange. Sponsor: John Fleming (La.). Referred to the House Committee on Energy and Commerce.

H.R.119: To prohibit the hiring of additional employees by the Internal Revenue Service to implement, administer, or enforce health insurance reform. Sponsor: John Fleming, (La.). Referred to the House Committee on Ways and Means.

H.R.127: To deauthorize appropriation of funds to carry out the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010.Sponsor: Tom Graves (Ga.). Referred to the Committee on Energy and Commerce, and the Committees on Ways and Means, Education and the Workforce, the Judiciary, Natural Resources, and House Administration.

H.R.141: To repeal the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010.Sponsor: Steve King (Iowa). Referred to the Committee on Energy and Commerce, and the Committees on Ways and Means, Education and the Workforce, the Judiciary, Natural Resources, House Administration, Rules, and Appropriations.

H.R.145: To repeal the Patient Protection and Affordable Care Act (Public Law 111-148) and related health-care provisions. Sponsor: Connie Mack (Fla.). Referred to the Committee on Energy and Commerce, and the Committees on Ways and Means, Education and the Workforce, the Judiciary, Natural Resources, House Administration, Rules, and Appropriations.

H.R.154: To prohibit the use of funds for implementation or enforcement of any Federal mandate to purchase health insurance. Sponsor: Ted Poe (Texas).Referred to House committee. Status: Referred to the House Committee on Energy and Commerce.

H.R.191: To amend the Patient Protection and Affordable Care Act to establish a public health insurance option. Sponsor: Lynn C. Woolsey (Cal.). Referred to the House Committee on Energy and Commerce.

For a comprehensive analysis of the Patient Protection and Affordable Care Act, including the full text of the law and additional information on health reform and other recent developments in employee benefits, just click here.

Wednesday, January 5, 2011

In 2011, Implementation And Repeal Will Battle For The Fate Of Health Care Reform


Polar opposites, the effective implementation of health care reform and its wholesale repeal or funding blockade, will dominate the landscape of the Patient Protection and Affordable Care Act in 2011.

In other words, health reform will continue to expand its reach even as the courts and Congress debate the validity of the law.


Repeal, Defund

Several lower courts have begun the inevitable journey of health reform to the Supreme Court, which likely will not end until 2011 or 2012; and Republicans in the House of Representatives have scheduled a January 12 vote on repeal of the ACA, a certainty to pass in the Republican-led House and fail in the Democratic-controlled Senate.

Some analysts have predicted a difficult road in even a partial repeal or defunding efforts. Meanwhile, dozens of health reform provisions already have taken effect or will take effect this year, including those for the following (see also here, here, and here).

  • Grandfathered plans

  • Coverage for adult children

  • Nondiscrimination rules for insured health plans

  • Preventive care services

  • Lifetime and annual limits

  • Minimum loss ratios

  • Preexisting condition exclusions

  • Claims appeals processes

  • Early retiree reinsurance program

  • Benefits summary standards

  • Expanding patient selection of providers

  • Reviews of premium increases

  • Small employer health insurance credit 

  • Automatic health plan enrollment

  • Nursing mother breaks

  • Health care Internet portal

  • W-2 health coverage disclosure

  • Small employer “simple cafeteria plans”

  • Over-the-counter medicines not reimbursable through HSAs & HRAs

  • Increased excise tax on HSA & HRA non-medical distributions


More detailed information on the health reform provisions taking effect in 2010 and later are available to Wolters Kluwer Law and Business subscribers here.

Recent Guidance

And just in the two weeks since Health Reform Talk took a holiday break, the following implementing guidance has been issued

Health Reform Nondiscrimination Requirements Delayed. The application of the new nondiscrimination requirements in the Patient Protection and Affordable Care Act (ACA) have been delayed, according to IRS Notice 2011-1.

Under Public Health Service Act Sec. 2716 (as added by the ACA), new insured group health plans and plans that are not grandfathered must comply with the IRC Sec. 105(h) nondiscrimination requirements, including rules that the plan does not discriminate in favor of highly compensated individuals as to eligibility to participate. In addition, the benefits provided under the plan may not discriminate in favor of participants who are highly compensated. Notice 2011-1 notes that “because regulatory guidance is essential to the operation of the statutory provisions,” the Treasury Department and the IRS, as well as the Departments of Labor and Health and Human Services have determined that compliance with Sec. 2716 “should not be required (and thus, any sanctions for failure to comply do not apply) until after regulations or other administrative guidance of general applicability has been issued under Sec. 2716.”

IRS Offers New Guidance On FSA And HRA Debit Cards. The Internal Revenue Service has issued new guidance in IRS Notice 2011-5 allowing the continued use of health flexible spending arrangement (FSA) and health reimbursement arrangement (HRA) debit cards for the purchase of prescribed over-the-counter medicines and drugs.

Information Sought On Value-Based Health Plans. Federal agencies are seeking additional information regarding specific examples and best practices of value-based insurance design (VBID) for recommended preventive services under the Public Health Service Act Sec. 2713, as added by the Patient Protection and Affordable Care Act (ACA). In addition, the agencies seek information on data used to support and inform VBID benefit design, measurement, and evaluation in the context of recommended preventive services.

The Internal Revenue Service, the Department of Labor’s Employee Benefits Security Administration (EBSA), and the Department of Health and Human Services’ Office of Consumer Information and Insurance Oversight sought the information in a request for information issued jointly in the Dec. 28, 2010, Federal Register.


HHS Issues New and Updated Guidance On Early Retiree Reinsurance Program. The Department of Health and Human Services’ Early Retiree Reinsurance Program (ERRP) Center has published new and revised questions and answers for plan sponsors, including the questions and answers on the application for the program, costs and reimbursements, early retiree issues, and price concessions and cost adjustments.

DOL, HHS, Treasury Answer More Questions On Health Reform, Mental Health Parity. On December 22, the Department of Labor's Employee Benefit Security Administration (EBSA), the Department of Health and Human Services (HHS), and the Treasury Department (the Departments) released the fifth set of frequently asked questions about the Patient Protection and Affordable Care Act (ACA). The FAQs also addressed some issues related to the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA).

DOL Requests Comments On Nursing Mother Provision Of Health Reform. The Patient Protection and Affordable Care Act (ACA) amended the Fair Labor Standards Act (FLSA) to require employers with more than 50 employees to provide reasonable break time and a place for nursing mothers to express breast milk for up to one year after the child's birth. This provision became effective when the ACA was signed into law on March 23, 2010. While the Department of Labor's Wage and Hour Division has issued a fact sheet on the provision, entitled Break Time for Nursing Mothers.  Under the FSLA, the DOL has requested comments on the provision before formulating further guidance. The request for information was published in the December 21 Federal Register.


HHS Proposes A Health Insurance Rate Increase Review Program Required By ACA. A new proposed rule from the Department of Health and Human Services' (HHS) Office of Consumer Information and Insurance Oversight (OCIIO) would establish a rate review program to ensure that all rate increases that meet or exceed an established threshold are reviewed by a state or the HHS to determine whether the rate increases are unreasonable. This requirement is included in Sec. 2794 of the Public Health Service Act, as enacted in the Patient Protection and Affordable Care Act (ACA), relating to the disclosure and review of unreasonable premium increases. Beginning in 2014, the ACA empowers states to exclude from the new health insurance exchanges health plans that show a pattern of excessive or unjustified premium increases. The rule was published in the December 23 Federal Register.

For a comprehensive analysis of the Patient Protection and Affordable Care Act, including the full text of the law and additional information on health reform and other recent developments in employee benefits, just click here.