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News
7-21-11 Affordable Care Act Update
July 25, 2011
Federal Update
Federal Deficit Negotiations
Although little progress has been made in reaching a consensus on a path forward, Congress has been quite active this week in its pursuit of competing deficit reduction strategies.
The House passed its “Cut, Cap, and Balance” bill earlier this week on a largely party-line vote. The bill would bar any increase in the debt ceiling unless Congress first sends a balanced budget amendment to the states for ratification, cut this year’s deficit by $1.5 trillion and cap federal spending at 24 percent of the gross domestic product. Such a steep budget cut over one year would significantly impact all facets of government operations, including funding for cancer research, Medicare and Medicaid. The Senate is expected to vote on the bill in the next few days but is not expected to pass it. The president has said that he would veto the bill if it made it to his desk.
Separately, the bipartisan group of senators known as the Gang of Six released its plan to reduce the deficit this week. This plan includes a combination of spending cuts, tax reforms, and entitlement savings. If fully enacted, it would reduce the deficit by $3.7 billion over the next 10 years. The plan would also impact funding for discretionary programs, such as the National Institutes of Health and Centers for Disease Control, along with Medicare. However, the reductions in spending under this plan are not nearly as significant as the ones included in the House-passed plan. While the President has expressed support for the Gang of Six plan, it is unclear whether it has the votes to pass the Senate. It does not appear that there are currently enough votes in the House to pass this plan.
One scenario now being considered is a “small” increase in the debt limit, which would provide Congress and the White House more time to negotiate a larger deal. However, it is unclear the size of the debt increase, how much time it would buy, or what the terms of this short-term agreement would be.
The White House continues to meet with Congressional leaders from both parties in an effort to find a solution that will resolve the budget stalemate while leaving important programs, such as Medicare, intact.
HHS Releases Proposed Regulation for CO-OP Health Insurance Plans
Last week, the Department of Health and Human Services proposed standards for establishing CO-OP health insurance plans. To provide more competition and choice to consumers, the ACA created a new type of health plan called a Consumer Oriented and Operated Plan, or “CO-OP”. CO-OPs are private, non-profit health insurers with a board made up primarily of CO-OP plan members, designed to offer quality, affordable health plans in every state. Their health plans would be available through a state's health exchange.
The proposed rule lays out the basic requirements for CO-OPs, and seeks public comment on them. Under the proposal, eligible organizations seeking to establish a CO-OP will be able to apply for a portion of the $3.8 billion in repayable loans made available under the ACA to fund start-up and capitalization costs. The proposed standards for CO-OPs reflect the recommendations of an independent advisory group.
CO-OPs will have to meet the same standards as all other health insurers in the state where they offer coverage, and they will also be required to demonstrate that premiums and any federal loans are being used appropriately and for the benefit of enrollees. Profits realized by a CO-OP must be reinvested in the plans through lower premiums, better benefits, or other improvements in health care quality. A CO-OP will also have the option to sell coverage to small businesses.
Institute of Medicine Releases Recommendations on Coverage of Preventive Services for Women
A new report from the Institute of Medicine (IOM) recommends that additional preventive health services for women be added to the services that health plans will cover at no cost to patients under the ACA. The list of additional preventive health services include human papillomavirus (HPV) testing as part of cervical cancer screening for women over 30 and yearly well-woman preventive care visits to obtain recommended preventive services.
The recommended list of services was commissioned by HHS in accordance with the ACA -- specifically, an amendment by Sen. Barbara Mikulski (D-Md.) mandating coverage for preventive services. If HHS approves the IOM's recommendations, all insurers will eventually be required to offer coverage for these services with no co-payments or deductibles.
Read the report: http://www.nap.edu/catalog.php?record_id=13181#toc
State Update
A handful of states remain in session and continue to debate health insurance exchange proposals, but the number of states that have passed exchange legislation since passage of the ACA remains at 11. They are California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, Washington and West Virginia. Also, the governors of Alabama, Georgia and Indiana have issued executive orders creating panels to study exchanges, while the governors of Mississippi, North Carolina, North Dakota, Virginia and Wyoming have all signed bills that allow the legislative process to move forward without yet establishing an exchange.
Media/Polling
New Report: Insurance Companies See Lucrative Opportunity in Exchanges
Beginning in 2014, health benefit exchanges will provide a new $60 billion market for insurance companies battling for millions of new customers, according to a Commonwealth Fund survey and report. Despite worries about the design and setup of the exchanges, the survey of health insurance executives found that more than half of their firms are interested in selling policies in the individual or small group exchanges, or both. An estimated 12 million Americans will buy from the exchanges in 2014. That number is expected to grow to 28 million by 2019, with aprojected increasing premium revenue growing from $60 billion to $200 billion in that five-year span.
As always, thank you for all you do every day to support laws and policies that help cancer patients and their families.
Christopher W. Hansen
President
American Cancer Society Cancer Action Network (ACS CAN)