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There is lots of news to report out of Washington, D.C. Regulatory Actions Federal regulatory agencies have been releasing Patient Protection and Affordable Care Act (PPACA)-related information at a fast and furious pace recently, and all indications are that even more may be coming soon. One of the new rules details how states can get a PPACA waiver if they make health reforms that hit coverage and affordability goals specified in the law. States may not apply for these waivers until 2017 under the current statute. Another rule details transparency requirements for Medicaid demonstration review and approval process. The Department of Health and Human Services also announced another round of exchange funding grants. The awards, totaling $229 million, went to 10 states: Arkansas, Colorado, Kentucky, Massachusetts, Minnesota, Nevada, New Jersey, New York, Pennsylvania and Tennessee. The administration also announced the awarding of start-up and solvency loans to seven organizations to help them launch health insurance cooperatives. PPACA requires that cooperative plans be offered through state-based health insurance exchanges. The winners of the awards are: Freelancers CO-OP of Oregon, New Mexico Health Connections, Montana Health Cooperative, Midwest Members Health, Common Ground Healthcare Cooperative, Freelancers CO-OP of New Jersey and Freelancers Health Service Corporation. It is expected that additional awards will be forthcoming for other entities seeking to form CO-OP plans. Congressional Action |
Last week, with the expiration dates of the payroll tax extension, Medicare provider payment fix and unemployment insurance all staring them in the face, members of a bipartisan negotiating team came to agreement on all three items, extending each fix though the end of 2012.
The cost of canceling proposed cuts to Medicare provider payments through 2012 came to $18 billion, most of which was offset by other health spending-related changes. The two biggest “pay-fors” were $6.9 billion in savings from restructuring federal “bad debt” payments to hospitals and nursing homes. The largest program cut is $5 billion from the Prevention and Public Health Fund created by PPACA. Other large offsets are a $4.1 billion reduction in Medicaid disproportionate share payments to states, $2.7 billion from changing the structure of Medicare clinical lab payments and the elimination of a PPACA provision to provide Louisiana with $2.5 billion in Medicaid funding to help offset additional costs to the state caused by Hurricane Katrina.
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Supreme Court |
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The Supreme Court has announced that they will expand the time frame for oral arguments in the PPACA constitutional challenge, NFIB v. Sebelius, giving another half-hour of time to debate whether or not the federal Anti-Injunction Act should apply. This law, which essentially prevents a federal suit against a tax until it has been levied, could prevent a ruling on the health care reform law this year. The announcement means that there will be six hours of arguments in this case over three days beginning on March 26. The justices generally hear one hour of oral argument in each case on the court docket. |
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The court-appointed attorney assigned to argue the position that the individual mandate provisions in PPACA are unconstitutional, but if stricken all of the rest of the law should still stand, claims in a brief filed with the Supreme Court that there is no proof that a costly “death spiral” will result if the law is implemented without an individual mandate. Bartow Farr was assigned by the Supreme Court to argue in favor of upholding the position taken by the 11th Circuit Court of Appeals. That court found the individual mandate provisions of PPACA invalid, but still upheld the rest of the measure. The Obama administration is arguing the individual mandate is a proper use of federal authority and the National Federation of Independent Businesses and 26 states that filed the suit are arguing that the whole law should be struck down due to the lack of a severability clause. In a brief filed with the Supreme Court, Farr argued, “Although the guaranteed issue and community rating provisions were meant to work together with the minimum coverage provision, and likely will operate less ideally without the minimum coverage provision, it does not follow that Congress, confronted with that prospect, would prefer to return to the prior health insurance system, where large numbers of people, in need of insurance but with pre-existing illnesses or conditions, were excluded from the market.” Evidence collected from New Jersey and other parts of the country that have already tried some of the market reform measures contained in PPACA, like the modified community rating and guarantee issue requirements, shows that such market reforms do increase access to coverage. However, they can impact price to a great degree. |
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Budget |
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President Obama’s Fiscal Year 2013 budget, contains a significant proposed expansion of the federal small business health insurance tax credit contained in PPACA with the hopes of making the program more appealing to American small businesses. The current program only applies to businesses with 25 or fewer employees and begins to phase out with more than 10 workers. The new proposal would expand program eligibility to small businesses of up to 50 employees and double the number of full-time workers that firms can have to receive the maximum credit to 20. The proposal also outlines a more generous phase-out and streamlines the process for receiving a credit. The administration projects these changes would result in an additional $14 billion in tax credits for more than 500,000 employers. One key issue that the proposal does not address, though, is how a business will have to purchase coverage post-2014 to receive the credit. To get the credit, small businesses will have to purchase their small group coverage through the SHOP exchange operating in their state. |
