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This Week in Health Care Reform - January 24th, 2014

Having switched contractors, the Administration’s backend fixes to the exchange website face their next crucial deadline; meanwhile, with dozens more regs expected, employer rules under the health care law remain elusive; what the enrollment demographics can tell us about adverse selection; experts come to the defense of the three R’s of health insurance in a post-reform world; and, why Medicare Advantage is so important and what you can do to help protect it.


Health Care Reform

Fixed Deadline: Earlier this month, the Centers for Medicare & Medicaid Services (CMS) announced that it was overhauling its leadership team, while also severing ties with the contractor it had been using to build the underperforming exchange portal launched last fall.  Strictly speaking, the federal government will actually be allowing its existing contract with CGI Federal to expire before signing a new agreement with Accenture to take over the troubled site.  The 12-month contract, worth roughly $90 million, will see Accenture, one of the world’s largest consulting firms, step in with the goal of doing what CGI Federal had failed to do, namely, to improve the end-to-end experience on, ahead of a critical mid-March deadline.  Beyond the frontend fixes, though, concerns have also been raised regarding the behind-the-scenes backend fixes, specifically, to the website’s payment system.  And, though those issues aren’t necessarily to blame for what some critics believe to be the portal’s paltry conversion rate, it’d be hard to argue that those same problems with the website’s ability to collect payments from consumers haven’t at least been a contributing factor.  While many lessons have been learned in the wake of the flawed launch, some worry that not enough has been done to guard against potential security breaches

Reg Watch: It’s no secret that implementation of the health care law has had its share of challenges.  From numerous goal-line changes at the end of last year to the well-documented issues with the consumer website, you’d be forgiven if you found yourself amongst the growing majority of Americans expressing a shared sense of pessimism with how things have gone thus far.  Even as additional delays continue to be quietly announced, what’s more broadly known, at least by those charged with actually implementing pieces of the law as they go into effect, is that dozens more rules and regulations are making their way through the review process before eventually being finalized this year.  So, for those that think the worst may be behind us, experts recommend keeping a weather eye on the regulatory horizon.

Adverse Selection: With the timer counting down ahead of the March 31st open enrollment deadline on the exchange marketplaces a good deal of attention is being paid to, not only how many people have signed up for coverage so far, but who exactly those people are.  Given the critical importance that a diverse mix of sign-ups represents to the risk pool, it’s no surprise that stakeholders were keenly interested in the demographic breakdown of enrollees released by the Department of Health & Human Services (HHS) last week.  And, while some argue it’s still too early to get an accurate read of where things actually stand, others have seen enough to make them more than a little nervous.  The Affordable Care Act was predicated on the idea that healthier and younger people would sign up for coverage – despite having to pay more – defraying the aggregate costs for everyone signing up.  But, what happens if the healthy and young stay away?  More than halfway through the open enrollment period, experts fear this is where we find ourselves now.  Still, others maintain there’s enough time remaining before enrollment closes to level out the balance.

The Three R's: A new front in the GOP-led attack on the Affordable Care Act recently opened up and has started to gain traction on the right.  At issue, the supposed ‘bailout’ of insurers codified in the health care law by three interconnected risk management programs – namely, the risk corridor, reinsurance, and risk adjustment.  However, a growing chorus of experts has begun to weigh in on the issue, warning against the political expedience of attacking programs essentially designed to stabilize premiums for consumers and protect against adverse selection.

Protecting Medicare Advantage: 2013 saw an historic amount of change to the health care landscape – perhaps nowhere was this more evident than in the popular Medicare Advantage program.  Having already suffered the slings and arrows of last year’s cuts, Medicare Advantage – serving over one-in-four Medicare beneficiaries – now finds itself, once again, in the political crosshairs.  Despite surviving those steep cuts, Medicare Advantage plans are now threatened with a new round of reductions in 2015.  Vulnerable seniors, so many of whom depend on the managed care model exemplified by Medicare Advantage, have already been subjected to fewer choices and higher costs as both rate adjustments and cuts imposed under the Affordable Care Act (to the tune of $156 billion) have weakened the underlying fabric that made the program such a success in the first place.  Already, one-out-of-twenty beneficiaries has had to switch plans due to their coverage being cancelled.  In fact, according to one analysis, special needs plans (SNPs), which provided benefits to over 1.5 million people across 500 plans last year, have seen their ranks dwindle by 13 percent.  With an abundance of evidence showing that such individualized care leads to demonstrably improved outcomes, the loss of even a single special need plan is cause for concern.  To get involved in the fight to protect Medicare Advantage, be sure to join up with our friends at the Coalition for Medicare Choices

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Looking Ahead

With the State of the Union this Tuesday, both Democrats and Republicans are pressing their respective leaders on priority agenda items heading into the election year.

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