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 February 18, 2013

During his State of the Union address last week, President Barack Obama said he is ready to embrace “modest” reforms to save Medicare for future generations. “Yes, the biggest driver of our long-term debt is the rising cost of health care for an aging population,” he said. “And those of us who care deeply about programs like Medicare must embrace the need for modest reforms — otherwise, our retirement programs will crowd out the investments we need for our children, and jeopardize the promise of a secure retirement for future generations.”  The president repeated his stance that any deficit reduction encompassing changes to entitlements must be “balanced,” and the burden can’t fall on the elderly and working families. President Obama went on to say his proposed reforms would include reducing taxpayer subsidies to prescription drug companies and asking more from the wealthiest seniors, though he did not spell out specific plans in either regard.


Douglas Elmendorf, director of the Congressional Budget Office (CBO), testified last week at a House Budget Committee hearing about his office’s recent report on the budget and economic outlook.  Discussion during the hearing focused on HHS estimates that health care spending growth has declined in recent years.  Elmendorf mentioned the economic slowdown and “structural” changes in the delivery of health care as possible reasons for the slower growth rates.  He suggested that improvements in the efficiency of care may be driven by “current and incipient effects of the Affordable Care Act (ACA)” and also by “pressures from private insurers.”

Gary Cohen, Director of the CMS Center for Consumer Information and Insurance Oversight (CCIIO), testified last week at a Senate Finance Committee hearing on the status of the ACA’s health insurance exchanges.  Cohen testified that the CCIIO will be ready for the initial exchange open enrollment period that begins on October 1, 2013.  He discussed the development of the Data Services Hub that will support information exchanges between the states and federal agencies to verify consumer information and determine eligibility for premium tax credits.  He also told the committee that the CCIIO will make decisions by July about health plan applications to offer coverage through federally facilitated exchanges.  Some committee members, however, raised questions about whether the CCIIO and other federal agencies are fully prepared for ACA implementation.  Concerns were also expressed about some agencies having archaic computer systems that “speak different languages” and the potential for skyrocketing premiums in 2014 due to ACA mandates and new user fees.


CALIFORNIA: Covered California held a press conference last week to announce the release of the standardized plan benefit designs. Peter Lee, CEO of the California exchange, gave a presentation and discussed the standardized plans. He was joined by Jim Guest, President and CEO, Consumer Reports, and Jean Yang, Executive Director, State of Massachusetts Health Connector in making the case for the importance of the standardized designs in simplifying the consumer experience. California is one of the few states requiring participating health plans to follow a uniform benefits structure to help consumers make a choice.

ILLINOIS: In Chicago last week, Health and Human Services (HHS) Secretary Kathleen Sebelius and Governor Pat Quinn announced that HHS has given conditional approval of the state’s request to operate a state-federal partnership exchange in 2014.  The approval was conditional on the execution of agreements regarding plan management functions and consumer outreach activities – the plan management agreement must be signed by March 1 and the consumer outreach agreement must be reached by April 1.  The General Assembly will debate imminently the issue of creating a state-based exchange for 2015, as a number of proposals are pending.

UTAH: The state appears headed toward a federally facilitated exchange, since efforts by Governor Gary Herbert to negotiate with HHS acceptance of the state’s existing exchange as compliant with the ACA have failed. Herbert reluctantly moved his support to the partnership model, but that effort was derailed by significant opposition from leadership in both chambers of the legislature.

WISCONSIN: Governor Scott Walker last week announced that he is rejecting the ACA’s optional Medicaid expansion.  Instead, the governor said individuals living in poverty can access health care coverage through Medicaid, with its current income threshold, and through the new federal health insurance exchange in 2014.


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