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Aetna Health Reform Weekly

Story Content Provided by Aetna on 5/13/13

For the first time, the Centers for Medicare and Medicaid Services (CMS) released data last week that show a wide variation in what hospitals charge for common procedures across the country. The new data received widespread media coverage, with the New York Times reporting that hospitals are charging Medicare "wildly different amounts", sometimes 10 to 20 times what Medicare reimburses. The report has raised new questions about how hospitals determine prices and why they differ so widely. The Times also noted that those with little or no insurance are often getting hit with extremely high hospital bills that may bear little connection to the cost of treatment.


As expected, the House passed the debt ceiling prioritization bill last week, by a vote of 221-207. The bill (The Full Faith and Credit Act) gives the Treasury Department authority to issue new debt to pay interest on Treasuries and Social Security benefits in the event of a debt ceiling breach. The bill is unlikely to move in the Senate and has drawn a veto threat from the President. The date that the debt ceiling is expected to be reached has now moved from July to September, and likely will move again to October thanks to the announcement that Fannie Mae will pay the U.S. government $60 billion next month. The exact date the debt ceiling will be reached remains a moving target, though the Treasury Department will likely provide more details on or about May 19, when the debt ceiling is re-instated.

The House is expected to vote this week yet again to repeal the Affordable Care Act (ACA). House Majority Leader Eric Cantor (R-VA) announced last week that a repeal vote would be scheduled for this week to give freshmen GOP House members a chance to go on the record for repeal. This latest symbolic repeal vote is likely to go no farther than the others, since the Democrat-controlled Senate is unlikely to take up the measure and President Obama and his veto pen remain the backstop. However, the vote is expected to give another GOP bill, the Helping Sick Americans Now Act, another shot at passing since conservatives, unhappy that full repeal was not on the table, stood in the way.

The House Small Business Subcommittee on Health and Technology held a hearing last week on the impact of the ACA's health insurance tax on small businesses. Subcommittee Chairman Chris Collins (R-NY), a cosponsor of the Boustany-Matheson bill to repeal the tax, noted that self-insured plans are exempt from the tax. He expressed concern that the tax will be particularly harmful to small businesses because they typically do not have a large enough pool of employees to self-insure. Chairman Collins also expressed concern that the health insurance tax will have a negative impact on private sector employment and the economy.


CONNECTICUT: The Finance Committee of the state's exchange recommended to its board of directors last week a market assessment based on 75 percent of a $34.5 million operating budget for 2014 and moving up the due date for the first round of assessments. The assessment will apply across the entire small group and individual markets, calculated as a percentage of gross written premium reported for the previous calendar year. The exchange estimates that the assessment will be 1.3 percent of premium and plans to collect it in September of 2013 rather than in January of 2014, as originally planned. Dental carriers also will pay an assessment calculated as a percentage of gross written premium reported for the previous year. The board will take up the financing proposals at its May 16th meeting.

GEORGIA: Governor Nathan Deal signed two health insurance-related bills last week. The first eliminates the Insurance Assignment System, enacted under HIPAA, and allows plans to discontinue offering conversion policies (also under HIPAA) if other ACA coverage is available, including coverage through the exchange. The second requires health plans to provide notice to policyholders of specific ACA-related factors in their premium increases for 2014.

KENTUCKY: A "tea party" activist has filed a lawsuit challenging the legality of the Kentucky Health Benefit Exchange, which was created by an executive order issued by Governor Steve Beshear. In July 2012, Beshear authorized the development of the exchange to provide Kentuckians with access to health insurance plans starting in 2014. The lawsuit claims that Beshear did not receive necessary approval from the General Assembly and seeks an injunction against the executive order until lawmakers vote to approve. To date, Kentucky has received $252 million in federal grants to set up the exchange.

Governor Beshear announced that Kentucky's Medicaid program will be expanded to cover an additional 308,000 Kentuckians with incomes up to 138 percent of the federal poverty level. The expansion is an option under the Affordable Care Act. Expanded coverage will be available beginning Jan. 1, 2014. In announcing his decision, Governor Beshear cited the results of a University of Louisville and Price Waterhouse Coopers study that show expanding Medicaid could add 17,000 jobs and more than $15.6 billion to the state's economy over the next six years.

NORTH CAROLINA: New legislation has been introduced in the House that would require health insurers to estimate for policy holders how much of any future rate increases can be attributed to the ACA. In addition, these notices to policy holders would have to include the following statement: "These increases are due to the federal Patient Protection and Affordable Care Act and not due to any actions of the Governor of North Carolina, the North Carolina General Assembly, or the North Carolina Department of Insurance." Similar legislation was recently debated in Georgia. The bill has been referred to the House Insurance Committee and is expected to be debated soon.

Legislation that bans the use of most-favored nation contract provisions in health insurance contracts has been enacted. Governor Pat McCrory signed the bill into law last week. Aetna, along with the other for-profit carriers in the state, advocated for the bill early in the session after coming close to success last session. The Act becomes effective October 1, 2013.

OKLAHOMA: The federal Department of Health and Human Services (HHS) informed state officials last week that it was denying a request for a waiver to extend the Insure Oklahoma program. Gov. Mary Fallin last year rejected the idea of a Medicaid expansion and a new state-run exchange – both urged by the ACA – for consumers to purchase health care coverage. Instead, her administration requested a waiver to allow Insure Oklahoma to continue. The program provides state funds and Medicaid funds to be matched by small employer and employee money for the purchase of private health insurance coverage. HHS said an extension to the program without changes is not possible. But HHS said it is willing to help come up with a workable program.

UTAH: After months of negotiations, Governor Gary Herbert appears to have succeeded in his effort to secure federal approval for his proposal to separate operational responsibilities for individual and small business exchanges in the state. The governor recently wrote to HHS Secretary Kathleen Sebelius outlining his proposal – that Utah continue to operate its existing Avenue H exchange as the SHOP or small business exchange while the federal government operates an individual exchange. The state would perform the plan management functions for both exchanges and administer Medicaid through its existing structure. The federal government would be responsible for precertification of Medicaid and CHIP eligibility and managing tax credits. The letter also noted that Utah will not collect and share data with the federal government via the federal "HUB" concerning citizenship and income verification; nor will it share employer data to facilitate the individual or employer coverage requirements of the ACA.

Late last week the Center for Consumer Information and Insurance Oversight (CCIIO) indicated agreement on the regulatory scheme proposed by Governor Herbert. Additional guidance will be issued in the form of amendments to the final exchange regulations that will address the state's concerns around the sharing of data and enable it to perform certain functions regarding Navigators.