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 August 5, 2013

According to a new Congressional Budget Office (CBO) analysis, the one year-delay in enforcement of the Affordable Care Act’s (ACA) employer mandate penalties will result in a 10-year federal budget cost increase of $12 billion, roughly 1 percent of the ACA’s total costs. The biggest factor in the increase is an estimated $10 billion reduction in employer penalty payments that would have been collected in 2015. The CBO also projects no material impact in 2014 exchange enrollments, still projected at about 7 million in the first year. Because the delay announced early in July by the U.S. Treasury Department is only for one year, the CBO expects few large employers will change their decisions about offering health coverage in 2014. But the CBO also notes that a delay in an anticipated mandate-driven expansion in employer-sponsored coverage means that a projected 1 million fewer persons will have employer coverage in 2014 than previously estimated. 


The House held two hearings last week on implementation of the ACA. Gary Cohen, director of the Center for Consumer Information and Insurance Oversight (CCIIO), and Danny Werfel, principal deputy commissioner of the Internal Revenue Service (IRS), testified before the House Ways and Means Committee and Marilyn Tavenner, administrator of the Centers for Medicare & Medicaid Services (CMS), testified before the House Energy and Commerce Committee. Administration officials discussed education and outreach efforts that are planned for the ACA and stressed that the exchanges will be ready on October 1. Republican members of the committee raised concerns that the Administration does not recognize the ACA-related challenges that consumers and businesses are experiencing. Democrat members emphasized the law’s popular provisions and a recent HHS issue brief, which found that the average cost of “silver” plans will be 18 percent lower than HHS’ original estimates for 2014 individual market premiums. Congress will be in recess during August as members return to their districts for the summer. 


CALIFORNIA: Covered California, the state’s new health benefits exchange, has announced the insurance companies, plans and rates that will be offered in its small group market, the Small Business Health Options Program (SHOP). SHOP will allow small business employers to compare qualified, competing health insurance plan options beginning October 1, 2013.  Covered California also announced the rates for the SHOP plans, stating that the rates are “generally comparable” to 2013 small group market rates.  It appears that Blue Shield will be using a narrow network plan in most regions, just like it is doing in the individual exchange.

CONNECTICUT: Mental Health and Addiction Services Commissioner Patricia Rehmer and Department of Insurance Deputy Commissioner Anne Melissa Dowling have recommended, in a joint letter to the Sandy Hook Advisory Commission, that the state develop and define specific criteria for non-quantitative requirements under mental health parity rather than wait further for federal agency rule making.  The Sandy Hook Advisory Commission is a working group appointed by Governor Dannel P. Malloy to address mental health, gun violence and school safety in response to the tragedy in Newtown in December 2012.   In their letter, Dowling and Rehmer suggested having a legislative study group solicit input from clinical experts, state agencies and other stakeholders.

FLORIDA: The Office of Insurance Regulation released a document last week that projects higher health insurance premiums for health care plans under the ACA next year.  Though the form and rate review process is ongoing, the document, Individual Monthly Health Insurance Premiums Before and After PPACA, projects that “consumers in Florida who need individual coverage can expect to see an estimated 30 percent to 40 percent increase in health insurance premiums for 2014.” OIR utilized two separate methods for calculating potential premium increases. Neither method incorporated any potential federal subsidies or credits that might be available to individuals.

The OIR also released two other related documents, “Health Insurance Plans by Company,” and “Health Insurance Plan Distribution by County.”  The first document shows the plans that insurers intend to sell both on and off the federally facilitated exchange. The second document displays how many individual plans have been accepted by the OIR to be sold in each county to date.

GEORGIA: The Department of Insurance has announced that Commissioner Ralph Hudgens is requesting an emergency delay from HHS of the filing deadline for rates to be offered on the health insurance exchange.  Indicating that rates will go up as much as 198 percent for some individuals, Hudgens is asking HHS Secretary Kathleen Sebelius to show why “the rates submitted by Georgia health insurers are not justified by Obamacare.” In other news, the Department of Community Health announced its intent to award the State Health Benefit program to Blue Cross and Blue Shield of Georgia (WellPoint). However, later in the week, DCH announced it will re-bid part of the program, though which parts the announcement applied to was not clear.

INDIANA: At last week’s Health Finance Commission hearing, the Insurance Department reviewed its expectations for rate increases in the marketplace as well as phasing out the state high-risk pool. The DOI’s chief, in-house actuary has concluded that as a result of the ACA individual health insurance rates will increase 72 percent on average for the 2014 plan year and 8 percent on average for small group insurance.  The analysis included insurers who were writing business in 2012 and does not account for insurers who will not be writing business in 2014 due to market withdrawal. For example, 17 companies have withdrawn from Indiana’s individual health insurance market and 10 have withdrawn from the small group market since the ACA became law in 2010. 

MAINE: The Bureau of Insurance has released numerous documents filed by two insurance carriers that plan to offer policies on Maine’s health insurance exchange. The Bureau is reporting to HHS that Anthem and the nonprofit Maine Community Health Options, which is new to Maine’s insurance marketplace, appear to have met federal requirements for participation in the exchange. The Bureau did not include a comparison of how much consumers can expect to pay for each product. Maine Community Health Options will offer seven individual plans and five small group plans. Anthem, which has partnered with the MaineHealth hospital system, will offer 20 individual plans on the exchange. The company’s filing for small group plans remained under review and was not released by the insurance bureau.

MARYLAND: The Maryland Insurance Administration has approved premium rates for the Maryland Health Connection, reducing companies' requested rates by as much as 33 percent. In a press release, the commissioner outlined the various metal levels by geographic area and highlighting the review process, including the modifications made to submitted rates.

NEVADA: The Division of Insurance (DOI) and Silver State Health Insurance Exchange have announced the participating carriers and proposed rates for individual products to be offered on the Nevada Health Link. Four carriers have filed plans to participate on the exchange for the individual market: Anthem, Health Plan of Nevada, St. Mary’s Health Plan and the Nevada Health CO-OP. The DOI also announced proposed rates filed for the exchange and for products that will be offered outside of the exchange (12 carriers) for the individual market across the state.  The rates are shown for silver and gold plans and, in some cases, catastrophic plans. Commissioner Kipper noted that the proposed rates do not include the tobacco surcharge rating factor. The rates are still being reviewed by the DOI.

NEW HAMPSHIRE: The Department of Insurance sent its recommendations to HHS early last week confirming Anthem Blue Cross and Blue Shield as the sole provider of plans on the exchange in the state.  While rates and plan details were not made available, the Department did indicate that Anthem plans to offer more than one plan design in both the individual and small group exchange.  In other news, the DOI presented to the Commission studying Medicaid expansion last week, reiterating its position that expansion will “broaden the availability of health coverage and promote more efficient use of health care resources.”  The DOI also stressed its support for a move toward Medicaid managed care.  The Commission’s final recommendations on Medicaid expansion are due by mid-October.

NORTH CAROLINA: The Department of Insurance announced its completion of rate reviews for plans to be sold on the state’s federally facilitated exchange and acknowledged that three plans are planning to participate.  Those plans are Blue Cross Blue Shield of North Carolina, Coventry Health Care of the Carolinas, and First Carolina Care.   The Department is not releasing rate details. 

WASHINGTON: The insurance commissioner has rejected the rate bids of five insurers for participation in the state’s health insurance exchange. Bids from only four of the nine insurers that applied were accepted. All of those applicants who are new to the market were rejected, as were three Medicaid plans that wanted to sell on the exchange. Just one insurer will sell statewide. An inability to meet federal and state network adequacy requirements was cited as the reason for the rejection.



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