Michigans Reform Issues
Great Northern Benefits Legislative update:
Proposed Rule Issued on Health Insurance Exchanges
Beginning in 2014, individuals and small businesses will be able to purchase private health insurance through state-based competitive marketplaces known as Affordable Health Insurance Exchanges (Exchanges).
On Jan. 14, 2013, the U.S. Department of Health and Human Services (HHS) released a proposed rule that would implement provisions of the Affordable Care Act (ACA) relating to the Exchanges.
Key provisions of this proposed rule include:
• Standards for appealing determinations of individual eligibility for federal premium subsidies to purchase health insurance through the Exchanges;
• Standards for adjudicating appeals of employer and employee eligibility to participate in the Small Business Health Options Program (SHOP);
• Criteria related to the verification of enrollment in and eligibility for minimum essential coverage through an eligible employer-sponsored plan; and
• Clarifications or amendments to standards related to other eligibility and enrollment provisions.
Great Northern Benefits would be happy to provide a complete description of these key provisions upon your request
Let the Horse Trading Begin!
Many of the most expensive components of PPACA are still to come and, as we all know, the size of the federal deficit is not getting any smaller. While the measure imposes new taxes and penalties to fund all of its components, the law is still expected to spend $1.7 billion over the next decade, which is potentially much more than it will be taking in. This means that we can expect this Congress to look at what parts of PPACA could be cut or adjusted, particularly as other spending cut negotiations occur.
So far, there has twice been bipartisan agreement to increase the amount of money that Americans who receive too much financial assistance through the exchanges must pay back to the federal treasury. The first agreement was back in 2010 during “doc fix” negotiations and the second occurred when Congress was debating the law’s 1099 reporting requirements when both parties agreed that the tax provisions were too troublesome for employers. Other recent PPACA cuts include the abolition of the CLASS Act, a decrease in funds from the Prevention and Public Health Fund and a cut in funding for nonprofit health insurance cooperatives. While we can only predict what components may be next to go, we can hope that both parties in Congress will work together to make the most logical cuts.
We anticipate that reclaiming subsidy money that was inappropriately distributed, as well as, changes to the income brackets used to determine subsidy eligibility, implementation delays and potential reductions in Medicaid spending may all be up for consideration next. The idea of reclaiming excess subsidies or “claw back” comes from the theory that some people receiving subsidies may not actually need that much financial assistance. House Republicans argue that those who have received subsidies but did not need them should pay 100 percent of the excess funds back. When this issue was debated last spring at the committee level, House Democrats argued 100 percent repayment could be too extreme. One of the concerns NAHU identifies with the subsidy repayment issue is that the Administration has not yet released employer plan reporting rules yet, and has said that for at least the first year, information about the individual’s access to employer-sponsored coverage will be ascertained by information reported by the employee, not the employer. Individuals could easily make mistakes in reporting what kind of employer coverage might be available to them and then could be awarded a subsidy inappropriately based on that information.
Another possible target to reduce costs is the qualification level for PPACA premium tax credit subsidies for individuals without access to affordable employer-sponsored coverage who buy policies through the exchanges. PPACA allows those with family incomes of up to 400 percent of the federal poverty level to qualify for insurance exchange subsidies. As it stands today, the exchange subsidies account for about half the cost of the law. Reducing this threshold could bring that number down and fund other programs.
Delaying PPACA implementation could also save the government some money, at least on paper. By delaying the implementation of some of the components of the law, the government could save on the costs needed to run those components in the short term. Since Washington works on 10-year budget projections, delaying implementation of say, the health insurance exchanges or the subsidies, by a year would make the law’s budget projections for 2010-2020 go down a bit. However, delaying the law’s implementation even a little bit is a very unpopular idea with Democrats and ultimately from a cost perspective it is just postponing the inevitable.
Finally, a reduction in Medicaid spending could also potentially reduce the financial burden of PPACA. This idea may be the most likely target for Democrats, even if they are not happy about it. Physicians worry that the government will eliminate a $12 billion provision that boosts Medicaid payments to doctors during the first two years of the expansion. Over the past few years there have been discussions of creating a “blended” rate for Medicaid payments to save money, although it hasn’t happened yet. “While creating one single rate could save $18 billion, according to an earlier White House estimate, it could discourage states from expanding their Medicaid programs, since they’d be reimbursed at a lower rate” noted Politico.
We’ll have to wait and see how the horse trading plays out over the next few months. Given that the GOP announced yesterday that they are willing to push debt ceiling talks off until May, it may take a while!