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 April 14, 2014

With the resignation of Health and Human Services Secretary Kathleen Sebelius last week, the Obama administration is looking to turn the page on the rocky start for the new insurance marketplaces.  Democrats are hoping her departure will take some of the political heat off, but that may be a tall order with the Affordable Care Act (ACA) remaining politically unpopular. Still, the administration is currently enjoying some good ACA news. For example, Sebelius announced last week that exchange enrollment now actually tops 7.5 million. And a new Gallup survey found that the uninsured rate has dropped to its lowest rate – 14.5 percent – since 2008. According to Gallup, the ACA “appears to be accomplishing its goal of increasing the percentage of Americans with health insurance coverage.” The number of uninsured for every major demographic group declined in the first quarter of 2014. The uninsured rate for lower-income Americans dropped 3.2 points to 27.5 percent -- the largest decline within any key subgroup.


The Centers for Medicare & Medicaid Services (CMS) announced 2015 rates for Medicare Advantage and prescription drug benefit (Part D) programs last week that represent a net improvement
over the proposed changes outlined in the advance notice issued in February. The changes CMS included in the final rate notice will help mitigate the impact on rates and benefits for beneficiaries. But the Medicare Advantage program is still facing a reduction in payment rates next year.

Earlier this year, CMS had also published a proposed Part C and D rule that would have made significant changes to the prescription drug program. Because of the controversy over several of its provisions, the agency has announced that it will not be finalizing several of the controversial provisions at this time.

President Obama last week nominated Sylvia Mathews Burwell, the director of the Office of Management and Budget, to replace Kathleen Sebelius as HHS Secretary.
 Sebelius, who resigned last week, gave no hint of her imminent departure as she testified at a Senate Finance Committee hearing on the President’s budget and related issues.  The Q&A portion of the hearing included lengthy discussion of the ACA implementation. The Secretary testified that an additional 400,000 consumers have signed up for exchange coverage since the administration announced 7.1 million enrollees as of the end of the initial open enrollment period.  However, the strong finish didn’t eclipse a start that Sebelius herself called a “debacle”.  Ranking Member Orrin Hatch (R-UT) raised questions about how many enrollees have actually paid their premiums and how many were previously uninsured. The Secretary said that HHS is working to collect data on these issues.  Senator Hatch also expressed concern over the high cost of implementation and the launch of the website.


CONNECTICUT: The Department of Public Health (DPH) has announced its updated version of Healthy Connecticut 2020, a statewide health assessment and plan for improving the health of all state residents by the end of the current decade. The plan is focused on improving health through prevention and the promotion of health equity
based on age, sex, race, ethnicity, sexual orientation, geography; and social, economic, environmental, and behavioral determinants of health. DPH Commissioner Dr. Jewel Mullen, who formally presented the state health assessment and plan, said “it provides a roadmap for improving the state’s health and ensuring that all people in Connecticut have the opportunity to attain their highest potential for health.”  DPH is accepting public comments on Healthy Connecticut 2020 until the end of April.

Prior to taking its two-week Easter recess, the legislature voted on a number of bills in the full Senate.  Most notably, legislation authorizing biosimilar substitution passed. Biosimilars are pharmaceuticals with an active drug substance made by a living organism or derived from a living organism. A broad coalition including pharmacists, health plans, and business expressed opposition to the significant notification requirements of the bill, which would impose a new administrative burden on one type of drug. The House has yet to take up the measure but is expected to do so prior to the session’s end in June.

MARYLAND: Prior to the adjournment of its 90-day session last week, the General Assembly passed more than 800 bills and introduced more than 2,600 bills overall.  Numerous health policy bills were introduced, but overall this session was not as controversial or as dynamic as previous sessions that were more focused on health policy legislation.
  Much of the session was dedicated to conforming Maryland statutes to match the ACA as well as pharmacy legislation related to specialty drugs, pharmacy benefit management and step therapy. More broadly, the session was dominated by bills focused on increasing the minimum wage, marijuana decriminalization and a variety of other non-health policy bills.

The legislature is in the midst of budget hearings for various state departments and agencies, including the Department of Banking and Insurance (DOBI) and the Department of Human Services.  As expected, the majority of the Assembly Budget Committee hearing on the DOBI was spent on implementation of the ACA, with Democrat legislators rehashing their opposition to the state deferring to a federally facilitated marketplace.  Regarding potential rate fluctuation, Commissioner Kobylowski informed the committee that carriers establish rates at a level intended to cover the underlying cost of care. DOBI will use its prospective review of rate filings and the retrospective medical loss ratio requirement to hold carriers accountable.  In a Senate committee hearing, the Department of Human Services highlighted state Medicaid expansion and the higher-than-anticipated enrollment.  While legislators have been supportive of Medicaid expansion, concern was raised that the program’s projected savings under the CMS-approved global waiver has not been appropriately realized.  Hearings and budget drafting are expected to continue until the June 30 deadline for passage of new fiscal year budget.

VIRGINIA: After weeks of partisan debate, the General Assembly has yet to pass a budget.
The new fiscal year begins July 1st.  Following the adjournment of the regular session in April, the General Assembly reconvened for a special session March 24th but failed to pass a budget.  The budget dispute centers on Medicaid expansion.  A majority of the Senate and Governor Terry McAuliffe support a Medicaid expansion plan, and they are insisting that such a plan be included in a new biennial budget. A majority of the House oppose expansion and its inclusion in a budget.  It is likely that the stalemate won’t be resolved until close to the end of fiscal year.


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