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 25, 2013

Final rules for key provisions of the Affordable Care Act (ACA) were released last week by the Department of Health and Human Services (HHS). The release of final essential health benefits (EHB) rules and final health insurance market reform rules will facilitate preparations for the launch of health insurance exchanges later this year. But a number of voices have expressed concerns about the impact of the rules on costs. The EHB rules, for example, could require a richer level of benefits than currently offered by many in the marketplace and drive up costs as a result. America’s Health Insurance Plans released a statement indicating that those concerns continue. “The minimum essential health benefits standard will still require many individuals and small businesses to purchase coverage that is more comprehensive and more expensive than they choose to purchase today.  As the reform law is fully implemented, it will be important to keep in mind how the EHB requirement interacts with other provisions in the law that will add to the cost of health care coverage, such as the new health insurance tax and restrictions on age rating.”


After a one-week recess, the House and the Senate reconvened this week with a March 1 deadline for “sequestration” cuts hanging over their heads. There are no signs yet of bipartisan consensus on blocking the sequestration cuts, but the Senate may take action this week on a bill drafted by Senate Democrats that would replace the sequestration cuts that are scheduled to take effect from March 1, 2013 through December 31, 2013. Not yet introduced, this bill would replace the cuts with $55 billion in new revenue (paid mostly by taxpayers with annual incomes exceeding $1 million) and $55 billion in spending cuts in defense and agriculture programs. Health issues are not addressed by this legislation. There is no word of House plans to consider a sequester replacement bill this week. Early last week, President Obama remarked that if the House and Senate can’t get a budget agreement done by Friday – the day deep cuts begin to take effect – then at the minimum Congress should pass a smaller package of spending cuts and tax reforms that would prevent the most harmful cuts. Several House and Senate committee are holding hearings on health and budget-related issues this week.


HHS announced last week the first recipients of nearly $300 million in State Innovation Model awards to help improve care and lower costs in their Medicaid programs. Created by the ACA, the grants are intended to provide flexibility and support to states to help them deliver high-quality health care, lower costs, and improve their health system performance. Model Testing awards will help Arkansas, Maine, Massachusetts, Minnesota, Oregon and Vermont in implementing their plans for health care delivery system transformation. The six selected states will use funds to test multi-payer payment and service delivery models, including approaches already under way at CMS, such as Accountable Care Organizations, on a broader scale. An additional 19 states will receive awards to further develop proposals for comprehensive health care transformation.

ARIZONA: Although Governor Jan Brewer has placed her full support behind an expansion of the state’s Medicaid program, generating legislative support remains a significant challenge. The governor is making her case in a variety of forums such as the state Board of Regents, which took a vote in favor of expanding coverage.

DELAWARE: The state will receive up to $2.485 million in federal funding to develop its State Health Care Innovation Plan.  Under the plan, the state intends to develop new work streams by working with various stakeholders including health plans, hospital systems, pharmaceutical companies, and the state Medical Society. The new streams would be focused on: new payments; enhanced data collection; health care delivery system transformation, as well as health policy and purchasing redesign and alignment.  The grant aid will be disbursed over a six-month period for plan development.

FLORIDA: Governor Rick Scott announced last week that he would support a limited three-year expansion of Medicaid under the ACA, provided the federal government assumed all costs.  He then plans to re-evaluate the program.  As an opponent of the ACA, the governor was initially reluctant to go ahead with a Medicaid expansion. But in his press conference, Governor Scott indicated that the expansion was important to protect the uninsured and taxpayers in Florida.

IDAHO: An exchange bill supported by Governor Butch Otter passed out of the Senate Commerce and Human Resources Committee last week. The legislation would establish a market-based, state-operated mechanism with a board. The exchange would have to be financially self-sustaining. Concurrently, a group of freshman Republicans, dubbed the “gang of 16”, announced their support for the Governor’s legislation if the amendments in its bill are accepted. The amendments include increasing the size of the board, requiring RFPs for certain contracts, and annual reporting to the legislature of changes to exchange policies or fees. It would also preclude the state from moving forward if the federal government changes the establishment date of the exchange.

OHIO: Greg Moody, director of the Governor’s Office of Health Transformation, announced that the state has received a federal grant to help accelerate the state’s work on payment reform initiatives and health care delivery changes. The $3 million State Innovation Model grant will be used to develop a comprehensive plan to expand the use of patient-centered medical homes (PCMH) and episode-based payments for acute medical services. By moving away from current health care payment systems that continue to drain value out of the care consumer’s purchase, Ohio is working to implement innovative payment models with the goal of delivering better care and improved health outcomes.


Health Reform Connection
America's Health Insurance Plans
Aetna 2011 Annual Report 

Aetna is the brand name used for products and services provided by one or more of the Aetna group of subsidiary companies. Those companies include Aetna Health Inc. and Aetna Health Insurance Company, 151 Farmington Avenue, Hartford, CT 06156.

Related Resources