A weekly compilation from Aetna of health care-related developments in Washington, D.C. and state legislatures across the country.
Week of March 3, 2014
A new federal government report has some bad news for small businesses adjusting to the impact of the Affordable Care Act (ACA). Prepared by the Centers for Medicare and Medicaid Services (CMS) Office of the Actuary at the request of Congress, the report found that more small employers – and the individuals and families they cover – will see their premiums increase rather than fall under the ACA. Specifically, an estimated 11 million people will see their premiums increase while 6 million are expected to see a reduction in premiums. The forecasts contained in the report are based on an examination of three specific ACA provisions: guaranteed issue, guaranteed renewability and modified community rating. Under the community rating provision, the premium rate bands allowed are now more tightly restricted than in the past. For example, the ratio of premiums charged to older adults vs. younger cannot exceed 3:1.
The House Energy and Commerce Subcommittee on Health held a hearing last week to examine a proposed rule that calls for significant changes to the Medicare Part D prescription drug program. The hearing included testimony from CMS Principal Deputy Administrator Jonathan Blum, along with former CBO Director Douglas Holtz-Eakin and representatives of the Medicare Rights Center and the AIDS Institute.
Republican members of the subcommittee expressed strong concern about the impact the proposed rule would have on prescription drug plan (PDP) choices, program costs, and preferred pharmacy networks. They pointed to an Avalere study that estimates 39 percent of enhanced PDP plans would be eliminated by 2016 and a Milliman study that estimates the proposed rule would mean an additional $1.6 billion in costs in 2015. Additional concerns were raised about the proposed rule interfering in negotiations between PDPs and pharmaceutical manufacturers. Democratic members raised concerns about the proposed loss of protected class status for antidepressants and immunesuppressants in 2015 and antipsychotics in 2016.
ALASKA: Lori Wing-Heier has been appointed the new insurance commissioner. Based in Anchorage, she joins the Alaska Department of Commerce, Community & Economic Development as the Director of the Division of Insurance. Wing-Heier previously was the Director of Risk Management with Arctic Slope Regional Corporation, where she designed and implemented a comprehensive, enterprise-wide risk management program for the Alaska Native Corporation. She also served as the senior vice-president at Marsh USA, where she was responsible for risk management programs for corporate clients. Her experience spans the broker, carrier and consumer side of the insurance industry.
NEW JERSEY: Before a joint session of the legislature last week, Governor Chris Christie delivered his budget address for fiscal year 2015 and had much to say regarding the stress that pension and health benefit costs are placing on the state budget. While short on the specifics, the governor implored the legislature to consider additional reforms to public employee benefits beyond what was passed in landmark legislation in 2011, when pension benefits were revamped and employee contributions for health care coverage were increased. This idea was met with immediate opposition from Democratic legislators.
Additionally, the governor announced the state’s plan to work with Rutgers University to find innovative ways to create greater savings in the Medicaid program. Christie highlighted the fact that 94 percent of his $33 billion dollar budget is consumed by the state’s obligation to fund Medicaid, employee pensions, and other entitlements. He said the legislative and executive branches must take dramatic action to move state finances off its unsustainable course. The legislature will begin budget hearings in both houses next month.
NEW YORK: NY State of Health, the state’s health insurance exchange, has now enrolled more than 500,000 New Yorkers, a 30 percent increase in enrollment in just the last three weeks. Most of February's uptick has been in the Medicaid program, which saw a 60 percent enrollment bump. Private insurance enrollment increased by a more modest 15 percent. The substantial increase in Medicaid enrollment was not unexpected, as the state's rollout plan for integrating and recertifying the existing Medicaid population into the exchange enrollment process was set to phase in after January 1.
OKLAHOMA: The House Appropriations and Budget Committee passed a bill last week that, if approved by the full legislature, would authorize the state to offset the financial loss to any Oklahoma resident who is penalized for violating the ACA’s individual coverage mandate. The bill would create a tax credit for taxpayers to offset any fines related to the individual mandate for tax year 2014. The legislation passed the House Appropriations and Budget Committee by a 15-5 vote, but getting it through the full legislature could prove difficult because of a cost to the state treasury that some put at up to $24 million.
UTAH: Governor Gary Herbert unveiled his long-awaited proposal for Medicaid expansion last week. The proposal, which would require a federal waiver, will be debated alongside the bills already introduced in the House and Senate. While the bills in the legislature focus on using little or no federal funding, the governor is supporting a request for a Medicaid waiver to establish a program to assist eligible state residents (with incomes up to 138 percent of the federal poverty level) in purchasing private insurance coverage, an approach proposed in several states such as Arkansas. Enrollees would be expected to contribute about $420 toward the cost of coverage. Herbert's plan would cover 111,000 people and have the broadest reach of the three proposals.
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