Volumne 12, Issue No. 1
February 4, 2014

What’s Going On in Health Reform

With Congress mired indefinitely in political conflict over possible repeal of the Affordable Care Act, federal departments and agencies – as well as the states – are proceeding to carry out ACA’s blueprint for health reform according to schedule, as required by law.  New regulatory rules, appointments, and programs are announced every day.  Many of these will significantly impact patient care and access to health benefits – and thus nursing care and policy.  Below is a summary of recent agency actions to implement ACA.  More detailed information is available through the official government website for health reform (http://www.healthreform.gov/) and CMS (http://www.cms.gov/). 

Health Insurance Exchanges:  On May 23, the Department of Health and Human Services (HHS) awarded over $35 million in state grants to support establishment of health insurance exchanges (HIEs).  Washington State Health Care Authority received $22.9 million; Indiana Family & Social Services Administration received $7 million; and Rhode Island Department of Business Regulation received $5.2 million.  ACA requires all states to operate HIEs by 2014, to facilitate purchase of health insurance plans by individuals and small businesses, and subsidize some premiums.  In January, HHS awarded $1 million planning grants to 49 states and D.C., and a total of $241 million in “early innovator” grants to several states in February.  Applications are now being accepted quarterly, from June 30, 2011 to June 29, 2012.  The Free Choice Voucher Program, allowing workers to convert employer health insurance contributions into vouchers for HIEs, was eliminated in the Fiscal Year 2011 funding bill (H.R. 1473).

State Adjustments in Medical Loss Ratio:  Twelve states, plus Guam, have requested temporary approval from HHS for individual health insurance plans to spend less than 80 percent of their premium revenue on direct care and quality improvement.  Maine, New Hampshire, and Nevada have already been approved for temporary adjustments to this “medical loss ratio” rule of ACA.  Kansas, Louisiana, Iowa, North Dakota, Florida, Georgia, Kentucky and Guam filed requests earlier, and Indiana and Delaware applied in mid-May.  The adjustments end in 2014, when health insurance exchanges take effect.

Small Health Plan Premium Review:  On May 19, HHS issued a final rule, effective September 1, 2011, requiring review of premium increases of 10 percent or more for some individual and small group health insurance plans.  Review is at the state level, unless HHS finds a state review process ineffective, and public input must be considered.  HHS Secretary Kathleen Sebelius publicly noted that “Over the last decade, the cost of an average health insurance policy has doubled, growing much faster than wages and inflation and continuing to put coverage out of reach for millions of families and business owners” while “health insurance companies have recently reported some of their highest profits in years and are holding record reserves.”  The rule does not apply to large group plans, already regulated by many states, or “grandfathered” plans pre-dating ACA.  HHS seeks comments on whether plans offered by associations should be covered by the rule.

Accountable Care Organizations:  CMS, the Centers for Medicare & Medicaid Services, issued a proposed rule March 31 for the Medicare Shared Savings/Accountable Care Organization Program.  ANA is developing formal comments, with input from SNAs and organizational affiliates.  On May 12, Geisinger and other participants in CMS’ Physician Group Practice Demonstration – a model for ACOs – expressed serious reservations about the economics and complexity of the proposed rule.  On May 17, CMS announced three new initiatives to encourage providers to form ACOs:  ACO Pioneer Model – an accelerated alternative, with higher levels of shared savings (and risk), operating through 2016; Advance Payment Initiative - the Center for Medicare and Medicaid Innovation (CMMI) is seeking input on whether pre-paying a portion of future shared savings would increase ACO participation; and Accelerated Development Learning Sessions - to educate prospective ACOs. 

Medicare Trust Fund:  The Medicare Board of Trustees annual report, issued May 13, indicates the Part A Hospital Insurance (HI) trust fund will be exhausted in 2024, five years earlier than previously predicted, but acknowledged the outlook is improved due to the Affordable Care Act.  HHS Secretary Kathleen Sebelius noted that ACA added eight years to the funds’ solvency, and will decrease HI costs 25 percent over the next 75 years.

Community Transformation Grants:  On May 13, HHS announced $100 million available in grants for community-based health projects sponsored by state and local governments, plus non-profits, to combat chronic disease and reduce health disparities.  The grants will focus on tobacco-free living, healthy eating, preventive services, social and emotional wellness, and healthy physical environments.  Applications to the Centers for Disease Control are due in July, with awards announced by fall.

Repeal of Form 1099 Requirement:  President Obama signed into law, on April 14, a repeal of the highly unpopular ACA requirement for businesses to issue an IRS Form 1099 whenever they make payments to corporations for goods and/or services exceeding $600 per year.  This was widely attacked as overly cumbersome for business, but was projected to raise $24.7 billion in revenue.

Comparative Effectiveness:  Dr. Joe Selby, a family physician and clinical epidemiologist, has been named executive director of the Patient-Centered Outcomes Research Institute (PCORI), established under the Affordable Care Act. 

Eileen Shannon Carlson, RN, JD

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