Health Reform Weekly

A weekly compilation from Aetna of health care-related developments in Washington, D.C. and state legislatures across the country.

Week of July 27, 2015

More than 100 small business owners flew to Washington, D.C. last week to lobby Congress to do away with a new health care regulation that could cost them as much as $36,000 per employee per year for violations. Organized by the National Federation of Independent Businesses (NFIB), the protest stems from a new IRS penalty on employers who offer tax-free reimbursement to employees to help them purchase individual health care coverage.


Senate Majority Leader Mitch McConnell has announced plans to hold a vote on repeal of the Affordable Care Act (ACA), as an amendment to the must-pass highway bill currently being considered by the Senate. The amendment has virtually no chance of clearing the Senate’s 60-vote threshold for avoiding a filibuster.

The IRS reported 7.5 million Americans have paid fines for failing to purchase health care coverage in 2014.  The ACA mandates that individuals obtain insurance or face a penalty. The IRS also noted that about 300,000 low-income taxpayers reported a payment when they should have claimed a health care coverage exemption. Outreach is planned to these taxpayers.

The Senate Finance Committee held a markup session last week for $22.1 billion worth of tax credit extensions.  The committee approved two-year extensions for every expired tax credit under consideration, including the research and development tax credit. Many Representatives in the house prefer permanent extensions for particular tax credits instead of the blanket two-year extension.

The Senate Special Committee on Aging held a hearing last week examining a recent Government Accountability Office (GAO) report that found widespread Medicare provider enrollment fraud.  The report records 38 instances of providers receiving payments for services after their deaths.  Sixteen providers managed to defraud CMS of $16 million in Medicare payments despite permanent bans on participating in public health care programs.

Medicare Trustees report confirms that the federal program’s hospital trust fund will remain solvent until at least 2030. Its long-term financial outlook is improving as well.  However, millions of Medicare beneficiaries could see Part B premiums skyrocket in 2016 due to rising costs of care. 


ALASKA:  Governor Bill Walker expanded Medicaid last week using a rare political maneuver. The Governor sent a letter to the Legislative Budget and Audit Committee informing the committee of his administration’s intent to accept federal Medicaid funds. Committee Chairman Mike Hawker indicated late last week that legislators could attempt to block the funding next year during regular session, after the state will have received the funding. Some view the statement as a concession that Governor Walker might have won this round.  About 42,000 Alaskans are anticipated to qualify as a result of the change.

CALIFORNIA: The California Health Care Foundation recently published on its website a report that argues the ACA’s new federal standards give California a powerful reason to revamp its dual system of insurance regulators in favor of one agency.  The majority of enrollment at the California Department of Insurance has shifted to the Department of Managed Health Care (DMHC) since 2014, indicating that the DMHC should be the regulating authority, according to the report. 

COLORADO:  The Colorado Association of Health Plans (CAHP) has named Charles Sheffield as its new Executive Director. Sheffield replaces Ben Price. He will begin at CAHP on August 3.

CONNECTICUT:  The Governor has signed into law Senate Bill 811, a 91-page health care bill that contains various elements proposed by a legislatively convened work group formed as a result of proposed hospital consolidations.  The law includes provisions on surprise billing, limitations on facility fees, a study on site reimbursement neutrality, and transparency of cost and quality information by carriers and providers for consumers. The law also encourages Access Health CT to offer tiered-network products on the exchange, creates a health information exchange modeled after Rhode Island’s, and strengthens the current state review and approval process for consolidation of hospitals and large group practices.

FLORIDA:  House and Senate leaders have called a special legislative session starting August 10 to redraw Congressional districts. Slated to last until August 21, the session was called after the Florida Supreme Court this month ordered lawmakers to redraw eight Congressional districts. The Supreme Court ruled that the districts violated an anti-gerrymandering constitutional amendment approved by voters in 2010.

MINNESOTA: The Federal Trade Commission (FTC) has expressed concern that a state statute could make provider contract terms for health plans subject to public disclosure. In a June 29 letter, the FTC noted that the amendments “may lead to the disclosure of competitively sensitive price and cost information that health care providers could use against the plans during negotiations”. Considering that Minnesota already has fewer competing providers, the FTC believes these competitive concerns are “heightened.” 

NEW HAMPSHIRE:  The state’s new czar announced 22 recommendations to combat opioid and substance abuse. The proposals would make it easier for families to get the overdose reversal drug Narcan, expand access to treatment and boost education and awareness. The first recommendation is to develop an implementation plan for recently enacted legislation making Narcan available to family members

UTAH: The Gang of Six – a group that includes the governor and legislative leaders – has announced an agreement on a framework for expanding Medicaid. The new proposal seeks to address key concerns of the governor, who favors broad coverage, and House leadership, which is trying to moderate the state’s financial obligation. A key component of the framework includes coverage of up to 138 percent of the federal poverty level and possible new taxes on the provider community and pharmaceutical companies to fund the state’s contribution. The new tax dollars would be used to draw down federal funds. The plan still requires approval from both CMS and the legislature and buy-in from doctors, hospitals and pharmaceutical companies.


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