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This Week in Health Care Reform - February 14th, 2014

Polling paints Republicans into a tough corner; the Administration announces another delay, in addition to releasing the latest enrollment figures; a new report projects what further cuts to Medicare Advantage would mean to vulnerable beneficiaries; while a separate report details what the health insurance tax is going to do to states’ balance sheets; and, fallout continues from last week’s CBO report.


Health Care Reform

Polling: Even as polling continues to show a public persisting in its inability to connect with the Affordable Care Act, what is also clear is that that same public – at least among likely voters – thinks the GOP is similarly rudderless.  In a new survey from The Morning Consult, a health care news and polling website and aggregator, almost two-thirds of independent and likely voters didn’t think congressional Republicans had a clear path forward on health care reform.  When taken in conjunction with other recent polling in which the GOP scored lower than their Democrat counterparts on women’s issues and standing with the middle class, there’s growing concern that perception of the Republican Party going into the midterm elections may be their biggest challenge. 

Employer Mandate Delayed...Again: On Monday, the Administration announced that it was, yet again, delaying the health care law’s employer mandate.  This latest postponement to the requirement that businesses with between 50 and 99 employees must either offer their workers health insurance or pay a penalty is the second such delay of what was meant to be a cornerstone of the Affordable Care Act.  Response was predictably swift.  Republicans argued that the same relief offered to businesses should be extended to individuals, calling once more for a delay to the individual mandate.  Meanwhile, a top White House official defended the President’s decision, dismissing the GOP’s critiques as disingenuous, partisan rhetoric.  And, as the legality of this latest delay to his signature health care law came into question, the President himself downplayed the postponement, saying it would only affect a “small percentage” of businesses.  Coming on the heels of the State of the Union, which saw the President vow to make 2014 a “year of action”, some are beginning to worry that the line between pragmatism and arbitrary flexibility might no longer exist.

3.3 Million Enrollees: The latest exchange enrollment numbers were released by the Department of Health & Human Services (HHS) on Wednesday and, while they were greeted with cautious optimism, generally speaking, there’s still room for improvement.  Four months into a six-month enrollment period, approximately 3.3 million people have now signed up for coverage on the insurance exchange marketplaces – a 1.1 million increase since December’s figures were released last month.  However, despite younger Americans signing up in greater proportions, there’s concern that most states are still behind projections.  But, with the Congressional Budget Office (CBO) recently lowering its initial enrollment forecast from 7 million to 6 million enrollees, owing to the well-documented technical malfunctions associated with, there’s growing confidence that there’s still enough time to hit that target.

Projected Cost of Medicare Advantage Cuts: As has been covered here, support for Medicare Advantage has been widespread and vocal.  With the Centers for Medicare & Medicaid Services (CMS) expected to announce its proposed changes to the popular program next Friday, beneficiaries and stakeholders, alike, have raised the alarm over the harm that further cuts to its payment structure would do to the 15 million seniors and persons with disabilities that depend on the program’s integrated model of coordinated care.  The latest group to add their voice to the collective hue and cry is the SNP Alliance, a national health policy group that’s dedicated to protecting the interests of some of the highest-risk beneficiaries.  This week, the group sent a letter to CMS Administrator, Marilyn Tavenner, stating that further rate cuts to Medicare Advantage would have a particularly dramatic effect on Special Needs Plans (SNPs), one of Medicare’s most effective programs, serving some of the sickest and most vulnerable populations.  And, yesterday, top House Republicans sent a letter of their own to the President expressing their concern over what the cuts imposed by the Affordable Care Act have already done to seniors on Medicare Advantage.  Separately, a new report was released last week detailing the impacts that further cuts to the program would have on beneficiaries.  The analysis, by management consulting firm Oliver Wyman, estimates that, should CMS enact rate cuts similar to those imposed this year, seniors could face additional benefit reductions and premium increases of as much as $900 for the year in 2015.  Find out how you can help here.

The Health Insurance Tax & Medicaid: There’s no denying that the Affordable Care Act has irrevocably altered the health care landscape in this country.  While a good deal of attention has been paid to all that the sweeping law has ushered in, there have also been quiet murmurings regarding the costs associated with those advances.  All told, there are some 21 new taxes tied to the law.  And, arguably, the one with the furthest reach is the new health insurance tax (HIT).  The HIT is a fee levied against insurers based on their share of the market.  This year alone, the HIT is expected to reach $8 billion, before eventually rising to $14 billion in 2018.  Over the next ten years, the tax is projected to exceed $100 billion – a cost, ultimately, borne by small businesses, families, and seniors.  And, just this week, a new analysis surfaced, identifying yet another victim of the HIT.  The report, prepared by actuarial firm Milliman and commissioned by Medicaid Health Plans of America, sheds some light on how the HIT will impact Medicaid.  According to their analysis, the tax will cost 37 states $13.6 billion over ten years, resulting in reduced access to services and benefits for Medicaid beneficiaries.

CBO Fallout: Last week’s budget report from CBO continues to make waves inside the Beltway.  On Tuesday, members of the Senate Budget Committee held a hearing, ostensibly to debate the budget and economic outlook for the next decade.  However, given the headline-grabbing takeaway from last week’s CBO release that the Affordable Care Act will cost the nation the equivalent of 2.5 million full-time workers over the next ten years, it’s hardly surprising that this week’s Budget Committee hearing saw both Republicans and Democrats scrambling to seize control of a narrative that looks to play a large role in a midterm election year.    

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Looking Ahead

Midterm elections are already wielding their influence on the legislative agenda.  Meanwhile, a new analysis puts a time and dollar figure on what the expected slew of new regs will cost us.

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