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 June 3, 2013

Even while federal regulators were issuing final regulations last week on employer-based wellness programs and Small Business Health Options Programs (SHOP), both key pieces of Affordable Care Act (ACA) implementation, it appears more trouble is brewing for the federal health care law. CNN is reporting that the Obama administration and Congressional Republicans are gearing up for a significant political fight over the ACA this summer and fall.  It was widely thought that last year’s U.S. Supreme Court decision and the presidential election in the fall would end most of the uproar. However, negative poll results and implementation issues continue to make the ACA a political lightning rod. Implementation of the ACA is expected to be a political issue again for the rest of this year right into the 2014 elections.   


The Medicare and Social Security Board of Trustees issued its 2013 annual reports last week on the financial health of the Medicare program and the Social Security retirement and disability programs.  The Medicare Hospital Insurance (HI) Trust Fund is projected to exhaust its reserves in 2026 – two years later than the trustees estimated in their 2012 annual report.  Over the next 75 years, Medicare expenditures are projected under current law to increase from 3.6 percent of GDP today to 6.5 percent of GDP by 2087. The trustees also provide new projections for the Medicare Advantage (MA) program.  The percentage of Medicare beneficiaries enrolled in MA and cost plans is projected to peak at 29 percent in 2014, before declining to about 23 percent in 2018 and 25 percent in 2025.  These estimates revise upwards MA enrollment projections in the 2012 report, which estimated that 17 percent of all Medicare beneficiaries would be enrolled in private plans in 2025.

A statement by CMS Acting Chief Actuary Paul Spitalnic notes that “the financial projections shown in this report for Medicare do not represent a reasonable expectation for actual program operations in either the short range (as a result of the unsustainable reductions in physician payment rates) or the long range (because of the strong likelihood that the statutory reductions in price updates for most categories of Medicare provider services will not be viable).” The trustees further caution:  “The financial projections in this report indicate a need for additional steps to address Medicare’s remaining financial challenges.” 


ARKANSAS: Lawmakers approved spending nearly $16.5 million in federal funds last week to continue setting up a health insurance exchange under the federal health care law. The Arkansas Legislative Council, which meets when the full legislature is not in session, approved spending two grants from the federal government for setting up the new insurance marketplace in the state. Arkansas is one of seven states using the partnership model for running its health exchange. The panel approved the grants on a 23-9 vote over the objections of some Republican lawmakers who oppose implementing the health care law in the state. Oregon is hiring more than 600 people this summer to help enroll people in the insurance exchange.

CALIFORNIA: The Covered California Health Benefit Exchange Board adopted performance standards for qualified health plans and noted there was no change in the projected $13.95 per member per month assessment for the individual exchange. The assessment now represents about 4.4 percent of average premiums.  For the SHOP exchange, the board is projecting an assessment of approximately $18 PMPM, but a final decision will not be made until mid-June.

CONNECTICUT: After more than three hours of debate and the introduction of five amendments, the State Senate passed a bill that would require Access Health CT to negotiate premiums with qualified health plans (QHPs) participating on the exchange.  Earlier in the year, the CEO of Access Health CT testified in opposition to the bill, noting that negotiating premiums with QHPs in advance of the 2014 start-up year is "impractical." He noted that the exchange lacks key information at this early point.  The bill is headed to the House for further consideration.  The General Assembly adjourns for the year on June 6.

NEW HAMPSHIRE: State Senators are balking at the prospect of expanding Medicaid coverage in the state as incented by the ACA and are now at odds with the House and the governor who support the proposal. The Senate’s budget panel recommended establishing a study commission rather than act now to expand Medicaid to cover about 58,000 of the state’s poorest adults. Senate Republican leaders have said they fear that federal funding will fall short of promises. The issue will be one of the biggest differences the two chambers will have to resolve before the fiscal year begins July 1.  The recommendation for a Medicaid study committee was part of a Senate Finance Committee vote recommending adoption of a $10.7 billion, two-year budget.

OREGON: The state’s largest health insurer – Regence BlueCross BlueShield of Oregon – decided to back away from entering the state exchange under its familiar name. Instead, Regence has decided to create a new health plan and legal entity, known as BridgeSpan, to participate on the exchange.


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