Health Care Reform Memo:
- My take: latest findings from survey of U.S. health care consumers
- Implementation update
- OIG operational assessment: HIX federal hub comes up short
- E-brokers for federal HIXs signed to date
- Guidance about Congressional staff enrollment in HIX released
- CMS issues HIX income verification FAQs
- U.S. Department of Labor turns down request to changes in out-of-pocket limits
- Stark self-reporting update
- HHS launches HealthCare.gov app, video to support enrollment
- Legislative update
- State update
- Fact file
- Subscribe to the health care reform memo
From Paul Keckley, Executive Director, Deloitte Center for Health Solutions
Polling of the public’s opinion about the Affordable Care Act (ACA) has been a recurrent facet of the law’s journey to passage and implementation. In today’s Fact File, our latest survey findings are featured. Consistent with other national polls, the findings are these:
Opinions about the ACA are split: about half of the population is opposed, about a third supportive, and the rest are somewhere between. These opinions are strongly felt and, as a result, haven’t changed much since 2010. And awareness of what’s in the law remains low, especially those unrelated to insurance coverage. All this in the context of the public’s view that the U.S. health system is fundamentally flawed, expensive, and not working well.
Abraham Lincoln said, “In this age, in this country, public sentiment is everything. With it, nothing can fail; against it, nothing can succeed. Whoever molds public sentiment goes deeper than he who enacts statutes, or pronounces judicial decisions.” His comments in the context of the Civil War ring true today. The ACA is a monumental piece of legislation: public support is key to its success.
Historically, “big laws” like the ACA have been passed with the support of public opinion. Consider:
On the eve of the passage of the Civil Rights Act of 1964, 85 percent of whites polled in a National Opinion Research Center survey endorsed the view that “Negroes should have as good a chance to get any kind of job” and rejected the position that “white people should have the first chance at any kind of job” (endorsed by only 15 percent). Its passage by a vote of 290-130 in the House and 73-27 in the 88th Congress was not without challenges: six Supreme Court cases were resolved on its path to implementation.
And shortly before Medicare was enacted in 1965, 75 percent of the public said that the federal government should pass a law to provide medical care for seniors per surveys by National Opinion Research Center/Anti-Defamation League of B’Nai B’Rith and the Roper Center for Public Opinion Research.
Given that a majority views health system’s performance unfavorably, why is it so divided about the ACA? The reasons are three, in my view:
- The public has no view of what a “high performing health system” should be. To most Americans, the health care system is understood through a local and deeply personal lens —the doctors and hospitals we use, the insurance we have (or not), and the health problems we face in our families. If an individual is reasonably comfortable that the health system works for them, they’re probably inclined to oppose the ACA. If uncomfortable due to lack of insurance or concerned about costs due to a medical problem, they’re probably supportive. And even among the majority who see its flaws, a compelling alternative system that performs better than ours is not readily known.
- The system is complicated—labor intense, capital intense, highly regulated at the state and federal levels, and fragmented. It’s not easily understood. The public, therefore, is swayed by generalizations and misinformation at times, lacking a natural inclination to “get the facts” or otherwise understand an issue’s depth. Understanding the U.S. health system in the U.S. is not in the core curricula of our educational system nor requisite for enrollees in Medicare, Medicaid, or employer-sponsored coverage. Notably, in our surveys, those most inclined to “know more” are those who purchase insurance for themselves—the individual market. Perhaps that’s the key to engaging consumers. Reforming a health care system that’s complicated does not lend itself to sound bites and simple answers; it’s a more substantive set of issues requiring reasonable debate.
- The ACA’s elements targeted to reducing health costs are not understood. Our surveys point to a disconnect: the public understands the law’s intent to increase access to insurance through exchanges, mandates, and Medicaid expansion. Support for those elements depends on a person’s view of the value of coverage. But efforts in the law to bend the cost curve are not understood: bundled payments, medical homes, accountable care, avoidable readmissions, the elimination of fee for service incentives, and alignment of coverage with medical evidence are not understood by the majority, and their dual impact on better care and lower costs remains unknown. Ironically, when polled about these elements, opinions are favorable. But in the larger context of the ACA, they’re virtually unknown.
The ACA is a central issue in the FY14 budget debate underway, and likely a major part of Campaign 2014 upcoming. It’s important to understand the public’s opinion about the law, but perhaps more importantly the underlying reasons it sparks a divisiveness in our society.
Lincoln was right: in this country, public sentiment is everything.
1-Americans’ Views On Health Policy: A Fifty-Year Historical Perspective Health Affairs Robert J. Blendon and John M. Benson
2-The Public's Views about Medicare and the Budget Deficit Robert J. Blendon, Sc.D., and John M. Benson, M.A.
N Engl J Med 2011
On August 2, the Office of Inspector General (OIG) reported that the Centers for Medicare & Medicaid Services (CMS) must still complete tasks regarding security controls, security testing, and coordination with other federal and state entities for the federal Health Insurance Exchange (HIX) Data Services Hub (Hub) to be operationally secure by its October 1 launch date. OIG performed the Hub assessment from March to May 2013 by interviewing CMS employees and contractors, interviewing employees from other federal agencies working with CMS on the Hub, and examining project timelines for successful implementation. CMS responded to the OIG that it was confident it will meet all necessary security deadlines and authorizations before the October 1 deadline.
To date, HealthCompare, Getinsured.com, and eHealthInsurance are some of the web broker entities (WBE) approved by CMS to enroll residents in the 36 states with federally-facilitated and partnership exchanges starting October 1, 2013. All WBEs have signed agreements with CMS in order to gain access to the Hub. The entities will provide consumers with tax subsidy and eligibility information regarding health plans offered on the HIXs.
Last Monday, the U.S. Office of Personnel Management (OPM) released a 13-page proposed rule to implement the ACA requirement (Section 1312) that members of Congress and their staff must purchase health benefits from HIXs. The proposed rule also clarifies how the federal government will contribute to paying their insurance premiums. Members of Congress must designate which employees are their “staff” by October 1 before the coverage year (i.e., designation by October 2013 for health plans beginning January 1, 2014) so individuals know whether to enroll in the appropriate state HIX or the Federal Employees Health Benefits (FEHB) Program. The proposed rule noted that OPM may extend the deadline for designation of staff up to 30 days for this year. OPM will be accepting comments on the proposed rule until September 9, 2013. Highlights:
- Congressional staff will continue to receive a federal government contribution toward the cost of their premiums for health plans purchased on a HIX; the contribution will be no greater than the contribution provided for other federal employees purchasing coverage offered by an FEHB plan (the current government contribution is the lesser of 72 percent of the weighted average of all FEHB plan premiums or 75 percent of the individual plan premium. OPM will apply the same employer contribution amounts up to 75 percent of the total cost of the health plan premium on the HIX)
- Federal income and employment tax rules related to employer-provided health care coverage apply
- Members of Congress or their staff will not be eligible for a premium tax credit if the coverage offered on the HIX is affordable, because it qualifies as an eligible employer-sponsored plan and all qualified health plans on the HIX provide minimum value
- OPM plans to work with stakeholders to determine whether employing offices could purchase insurance in the Small Business Health Options Program (SHOP)
Background: members of Congress and their congressional staff will no longer be eligible for FEHB coverage as of January 1, 2014. ACA defines congressional staff as all full-time and part-time employees employed by the official office of a member of Congress. Because there is not an existing statutory or regulatory definition, OPM believes that members of Congress are best able to designate which of their staff members work in their official office. Because the ACA states that “notwithstanding any other part of the law” HIXs are the only health plans that the feds may make available to members of Congress, the federal government is the only employer that may provide a qualified health plan through a HIX as a benefit under its cafeteria plan.
Last week, CMS issued an FAQ on how income will be verified on the HIX for individuals interested in receiving subsidies to purchase coverage:
- Individuals applying for subsidized coverage on the HIX will be asked to provide tax filings, Social Security Administration (SSA) data, and/or current wage filings;
- Verification provided will be cross-checked with the U.S. Internal Revenue Service (IRS) and SSA;
- If income cannot be verified, the information will be cross-checked with employer-reported wage information;
- If information is still unsubstantiated, individuals (100 percent for federally-facilitated exchanges[FFE]) will be asked to provide an explanation or additional documentation;
- During the income verification process, if an individual meets all other eligibility requirements, s/he will receive advance payments of the premium tax credit and cost sharing reductions for 90 days with the understanding that any overpayments must be reconciled at the end of the year;
- If documentation is not provided within 90 days, the HIX is authorized to make determinations based on SSA or IRS data.
Background: Advanced Premium Tax Credits (APTC) are targeted to eligible households with income between 100 percent and 400 percent of the federal poverty level who are not offered coverage of minimum value by an employer. The White House budget for FY12 estimated APTC outlays of $15.6 billion in FY14; its budget for FY13 estimated outlays of $21.6 billion in FY14—a 38 percent increase; and, its FY14 budget request is $32.3 billion—a 50 percent increase from FY13.
Last Wednesday, the U.S. Department of Labor announced it will not change out-of-pocket limits set by Section 1302 of the ACA. The ACA limits out-of-pocket spending in 2014 to $6,300 for individuals and $12,700 for families who use a single benefit administrator. The National Health Council and 100 patient advocacy groups had asked to undo the one-year transition, concerned that people with complex chronic conditions often use multiple benefit administrators, and would incur multiple out-of-pocket costs and have trouble accessing care.
“At least 250 health care companies have self-reported wrongdoing involving the Stark law since the CMS Self-Referral Disclosure Protocol was authorized by the ACA in 2010. So far, 29 hospitals have settled cases for a total of $3.3 million, averaging $114,000 per settlement”.
(Source: Joe Carlson, “Penalty loophole: disclosure a good deal for Stark law violators”, Modern Healthcare, August 2013)
“Last Monday, the U.S. Department of Health and Human Services (HHS) launched a new feature on HealthCare.gov called MyAccount, where consumers can create sign-in information in preparation for enrollment on October 1. But no subsidy or rate information is provided. The agency also released training videos for in-person assisters.”
(Source: Politico Whiteboard, August 5, 2013)
|Sector||FY14 adjustment||# of facilities impacted||Final rule|
|Hospice providers||1% increase or $160 million||Approx. 3,742 certified hospices||Click here|
|Acute and long-term care hospitals (LTCH)||$1.2 billion increase for acute care; $72 million increase for LTCH||Approx. 3,400 acute care hospitals; 440 LTCH||Click here|
|Skilled nursing facilities (SNF)||1.3% increase ($470 million), including a 0.5% productivity adjustment and a 0.5% forecast error rate adjustment||Approximately 15,380 SNFs||Click here|
Source: Federal Register, https://www.federalregister.gov/
According to the study published in Health Affairs August 5, the percentage of hospitals receiving electronic health record (EHR) incentive payments increased from 17.4 percent in 2011 to 36.8 percent in 2012, showing more hospitals are on track with adopting EHR systems. However, when examining smaller and rural hospitals researchers found that they were less likely to meet Medicare’s meaningful use criteria for EHR adoption. The authors concluded that small and rural hospitals face a different set of challenges than larger and urban hospitals, which may require different incentives in order to meet their EHR implementations goals.
(Source: DeRochas, C. “Some Hospitals Are Falling Behind In Meeting ‘Meaningful Use’ Criteria And Could Be Vulnerable To Penalties In 2015”, Health Affairs, August 2013).
Farzad Mostashari announced last Tuesday he will resign from his position as head of the HHS Office of the National Coordinator (ONC) for Health Information Technology this fall. Dr. Mostashari joined ONC in 2009 as principal deputy, and has serves as national coordinator since 2011. HHS has yet to announce who will take over as head of ONC following his departure.
The Pentagon will reduce the number of days it will furlough its 640,000 civilian employees from 11 days to six days and anticipates same in FY14. The furlough, scheduled to take place between July 8 and September 30, 2013, is expected to end next week as most employees have reached six furlough days. In the Army medical system, all but 6,000 of its 44,000 civilian medical workers will be furloughed.
Last Tuesday, CMS requested advice on disclosing physician-claims data as Senators Ron Wyden (D-OR) and Chuck Grassley (R-IA) advanced their legislation to create a searchable website on physician Medicare pay to help beneficiaries shop for doctors. Since 2010, CMS has disclosed detailed Medicare spending and quality data involving hospitals, nursing homes, and other providers, but no disclosures of physician-level data. However, a spring U.S. district court ruling lifted that ban so the agency is considering ways to open physician-level claims to the public.
Sixteen states—12 led by Democratic governors, three led by Republicans, and one Independent—and the Democratic mayor of D.C. have announced plans to operate state-based exchanges. Seven states—five led by Democratic governors and two led by Republicans—will participate in state-partnership exchanges. The remaining 27 states will default to a federally-facilitated exchange.*
|State-based exchange||State- partnership exchange||Federally- facilitated exchange|
|CA, CO, CT, DC, HI, ID**, KY, MA, MD, MN, NM**, NV, NY, OR, RI, VT, WA||AR, DE, IA, IL, NH, MI, WV||AK, AL, AZ, FL, GA, IN, LA, KS, ME, MO, MS, MT, NC, ND, NE, NJ, OH, OK, PA, SC, SD, TN, TX, UT*, VA, WI, WY|
■ Democratic Governor ■ Republican Governor ■ Independent Governor
*UT: individual market will be a federally-facilitated exchange; small business health options program (SHOP) will be state-based.
**NM & ID: federal government will help run the individual market. States will continue to maintain plan management and consumer assistance functions; HHS will operate the IT system. SHOP will be state-based.
- On August 7, Baltimore launched a call center to help Maryland residents learn more about health care reform, including health coverage options, financial assistance, and open enrollment. The call center has a bilingual staff and will be open Monday through Friday, 8am to 6pm, from now until September 30, 2013. Starting October 1, 2013, the call center will staff 125 representatives and will be open seven days a week through March 31, 2014, when open enrollment ends.
- On August 7, California announced contracts with 12 health insurers to sell plans on the state-run individual HIX, and six insurers on the SHOP exchange. One insurer, the Ventura County Health Care Plan, a government-sponsored HMO, dropped out of the exchange unexpectedly. The Ventura County Health Care Plan has approximately 24,000 members and insures mostly county employees, their dependents, and Healthy Family enrollees.
- The Connecticut State Department of Insurance announced that Aetna withdrew its application to sell individual health insurance plans on the state’s HIX, Access Health CT, because the proposed premium rates were too high. Given the Insurance Department’s perception of Aetna’s rates, as regulators, they have the authority to request the insurer resubmit their application with a lower rate. Note: Aetna and its subsidiary Coventry withdrew their HIX bids in Georgia and Maryland last week. Aetna has agreed to continue to offer small-group plans on the exchange since Maryland requires its participation and will continue selling health plans to non-Connecticut residents.
- Last Tuesday, the Wisconsin insurance department announced it has completed its review of applications from 13 health insurance issuers to sell plans on the state’s individual FFE, and nine insurers for the SHOP. The insurance commissioner’s office has yet to release any information regarding rates or application approvals.
To date, 23 states and DC have said they will or are likely to expand their Medicaid programs; 24 states have indicated they will not expand their programs in 2014:
|Expected to expand Medicaid||Will not expand||Maybe|
|AR, AZ, CA, CO, CT, DC, DE, HI, IA, IL, KY, MA, MD, MN, ND, NJ, NM, NY, NV, OR, RI, VT, WA, WV||AL, AK, FL, GA, ID, IN, KS, LA, ME, MI, MO, MS, MT, NC, NE, OK,SC, SD, TN, TX, UT, VA, WI, WY||NH, OH, PA|
■ Democratic Governor ■ Republican Governor ■ Independent Governor
(Sources: NASHP and Kaiser Family Foundation. Updated as of July 1, 2013)
- Last Tuesday, the Arkansas Department of Human Services submitted a waiver request to CMS that would allow the state to provide roughly 225,000 residents with private health insurance as part of Arkansas’s Medicaid expansion. The waiver would provide the program with three years of federal funding to cover residents newly eligible under the Medicaid expansion, and is the result of a compromise made by state legislatures and the Administration. Open enrollment would start October 1, and eligibility would depend on income and the number of people in per household.
- According to a report released last week, hospital costs for state workers and retirees in California decreased over 30 percent after requiring government workers to pay out of pocket for all orthopedic surgery costs above a $30,000 reference point. Since the California Public Employees' Retirement System (CalPERS) made the change in 2011, the average cost of joint replacement dropped from $43,308 to $28,465 at “high-priced” hospitals, saving $3.1 million for 447 patients.
- The Oregon Health Authority recently held a public hearing in response to backlash from the mental health community regarding a rule that requires licensed community health workers to undergo background checks. Community health workers specific to mental health and substance abuse recovery voiced their concerns that since background checks would be handled by the Department of Human Services, instead of private companies used by other employers, community health workers would be held to more rigid criteria than others. Health advocates also highlighted the importance of workers providing peer support to patients; especially for those community health workers who have personal experience with addiction as they can provide experience and guidance to those recovering from addiction that others cannot. Many former addicts have a criminal past, however, and may not pass the necessary background check which would limit the quality of the workforce.
- Last Tuesday, Nevada’s mental health system received $2.1 million in emergency funding from the Interim Finance Committee. The Committee took over distributing part of the $4 million in contingency funds allotted to mental health services several months ago by the Nevada Legislature. The funds will go towards hiring 11 new staff members, 12 contractors, and adding 22 patient beds at a state psychiatric hospital. This particular hospital is currently facing multiple investigations following reports that they discharged and shipped patients to locations across the nation, in addition to losing their accreditation from the Joint Commission last month. Over the last several years, Nevada’s funds for mental health and developmental services have fallen by roughly $80 million.
Re: health insurance premium rate announcements in states: “It's unfortunate that in some instances, I think, erroneous information is being advanced as if these are the final rates available in the marketplace and that this is what consumers will be paying. And that's just not accurate. The information statements put out at the state level are just factually incorrect.”
—HHS Secretary Sebelius, August 5 conference call with reporters re: status of ACA implementation
Re: federal funding to support implementation of the ACA: "In spite of the fact that this is a brand new effort and kind of a brand new marketing target, we won't have the kind of resources that Apple had when it rolled out their iPhone and iPad. We'd love to have that. We'd love to have the money that a movie studio has when they're about to launch a new hit over the course of several months. I'm confident that the resources that we have are going to be well leveraged and well used and hopefully amplified by lots of our partners throughout the country.”
—HHS Secretary Sebelius, August 5 conference call with reporters re: status of ACA implementation
“We can argue about how squeezed the middle class was in the decades between the end of the postwar expansion and the onset of the Great Recession. But two things are clear: the coping mechanisms the middle class employed in those decades (fewer children, more hours worked, more borrowing against home equity) are played out, and it will take middle class households years to recover from the recession-induced blow to their income and wealth. If we cannot restore a vigorously growing economy whose fruits are widely shared, the struggles of the middle class will persist, and our democratic distemper will deepen.”
—William Galston “Behind the Middle Class Funk” Wall Street Journal August 7, 2013
“Under the [Cadillac] tax, plans that cost above a certain threshold in 2018 — $10,200 annually for individual plans and $27,500 for family plans, with slightly higher cutoffs for retirees and those in high-risk professions like law enforcement — will be taxed at 40 percent of their costs in excess of the limit… State and local governments across the country tend to offer more expensive health plans than private businesses do, and workers often accept smaller wage increases to retain their benefits… The total health care cost for [New York City’s] nearly 300,000 municipal employees, pre-Medicare-age retirees and their dependents is expected to approach $8 billion by 2018… the Cadillac tax would cost New York City $22 million in 2018, increasing to $549 million in 2022.”
—Kate Taylor “Health care law raises pressure on public unions” New York Times Page 1, August 5, 2013
Opinions about health reform and the ACA since 2009 (Deloitte Center for Health Solutions Surveys of U.S. Health Care Consumers)
The overall view of the health system’s performance has remained unfavorable, especially among those lacking insurance coverage and those who consider themselves financially at-risk due to health costs: only one in five overall (21 percent) gave the system a grade of A or B in 2013, down from 34 percent in 2012:
Among those who consider themselves well insured, the assessment of the U.S. health system is unfavorable: 32 percent gave it grade of A/B in 2013 vs. 49 percent in 2012, and the current level is approaching the pre-ACA level of 30 percent (2009):
Those covered in government programs—Medicare/Medicaid—have a more favorable view of the system overall than do those with commercial coverage:
Solutions for the health care system’s flaws are problematic to most consumers: most consumers are unaware of or ambivalent about strategies to address its problems:
The majority are not sure cutting payments to providers will improve the overall performance of the health care system:
In a forced choice question with only two options, awareness of elements of the ACA that address insurance coverage are better known than elements that address changes to the delivery system, i.e., bundled payments, transparency about prices and physician quality:
The majority (78 percent) of consumers say they are aware of the individual mandate—higher among those who purchase insurance directly (the individual market) and seniors:
The impact of ACA in insurance coverage and delivery system changes is not readily understood. Generally, increased regulatory oversight of the insurance industry is thought to be more impactful than changes to the delivery system, but opinions vary widely:
Increased access to preventive health care with no out of pocket costs per the ACA is viewed favorably as a solution by about half of the population (given that individuals do not believe they have to pay directly for the services). The “cost” associated with the preventive health feature of the ACA is not readily understood to be passed through in premiums or embedded in other costs. Thus, differences by insurance or generational cohorts do not vary widely:
Price transparency for preventive health is viewed as marginally impactful in promoting preventive health in the ACA: however, those who purchase insurance for themselves (the individual insurance market) are significantly more keen to have price transparency than other cohorts:
Changes to insurance plans that require they cover medical needs in ten categories (essential health benefits, or EHB) are not understood by the majority, therefore, opinions about the efficacy of EHB in coverage is not strong. Notably, those who purchase insurance for themselves, i.e., the individual market, are more sensitive to the potential impact of EHB requirements: presumably the EHB requisite is associated with their assessment of the affordability of coverage in their personal circumstance:
Increased transparency about the performance of physicians is not regarded as a high impact feature of the ACA: in every cohort, only fewer than one in three rated it high impact: