1. health and fitness

Vol. 2, No. 52 — December 24, 2014
Year-End Exchange Roundup...
Open Enrollment Rolls On, 2016 QHP Draft Letter Out, King At Court March 4
This year is coming to a close on a more positive note for the Affordable Care Act, with the administration announcing that more than 2.5 million people had selected a plan through healthcare.gov by the Dec. 15 deadline for Jan.
1 coverage, and many more have signed up through state exchanges. The administration also last week issued its draft
2016 letter for issuers in the federally-facilitated exchanges, revealing that insurers must submit their QHP applications
by April 15, with agreements slated to be signed by Sept. 15. And finally, the Supreme Court has said that oral arguments for the closely-watched King v. Burwell case will take place on March 4.
continued on page 10
CMS Draft 2016 FFE Issuer Letter Outlines Key Timelines, QHP Policy
Issuers must submit their qualified health plan (QHP) applications for participation in the Federally Facilitated
Exchange starting March 16 through April 15, two months earlier than last year, and plan agreements will be signed by
Sept. 15, a couple weeks before the planned Oct. 1 launch of open enrollment, CMS says in its draft 2016 letter to
issuers that provides technical and operational guidance for issuers participating in the FFE. The 59-page letter released
Friday (Dec.19) also discusses policy related to network adequacy, essential community providers and non-discrimination in essential health benefit and formulary design, among other issues.
CMS expects to review QHP applications in two rounds, the first will take place between April 16 and May 26 and
continued on page 4
Administration Proposed Rule Would Amend Excepted Benefits
Low-wage workers and others who were denied the option of bolstering exchange plans with employer-provided
coverage now have another shot at adding those benefits to their health care, after the Obama administration on Friday
(Dec. 19) published a proposed rule that would amend the definition of “excepted benefits” to include certain limited
wraparound coverage.
Suggested changes come from HHS, Labor and Treasury after much urging by unions and numerous comments on a
rule published Sept. 26, which began as a little-noticed proposed regulation in December 2013. Unions including the
AFL-CIO, the Service Employees International Union and the United Food and Commercial Workers International
continued on page 8
Senate GOP Asks HHS To Tell Enrollees Subsidies Hinge On SCOTUS Ruling
Senate GOP leaders are asking HHS and IRS to inform all federal exchange enrollees and visitors to healthcare.gov
that their ACA subsidies could be taken away if the Supreme Court rules against the administration in King v. Burwell.
The Republicans also want HHS Secretary Sylvia Burwell and Treasury Secretary Jack Lew to include in their 2016
budget requests information on how their departments would respond should the Supreme Court rule that subsidies are
not allowed to flow through exchanges administered by the federal government.
The requests are outlined in a letter sent Wednesday (Dec. 17) signed by Senate Republican Policy Committee
Chair John Barrasso (WY), incoming Senate Majority Leader Mitch McConnell (KY), Whip John Cornyn (TX),
continued on next page
EDITOR’S NOTE
In observance of the holidays,
Health Exchange Alert will not be published on Dec. 31.
Your next issue will be published Jan. 7, 2015.
Conference Chair John Thune (SD) and Conference Vice Chair Roy Blunt (MO).
“Given the enormity of the financial stakes involved, we request that you use your department’s fiscal year (FY)
2016 budget submission to inform Congress of how the Administration plans to respond to a possible ruling in King that
recognizes that the IRS’s rule is at odds with the law,” the senators write.
At issue in the case is an IRS rule that says subsidies are available to all eligible Americans purchasing coverage
through a health insurance exchange whether it is administered by a state or the federal government, even though the ACA
says the credits are available through “an exchange established by the State.” The administration argues that under the
Chevron doctrine, regulatory agencies may interpret language that is ambiguous. But the plaintiffs say that barring
subsides from the federal exchange states is a clear reading of the law.
In the letter, the GOP leaders side with the plaintiffs, saying that IRS’ interpretation is “unambiguously” inconsistent
with law, and argue that IRS’ decision has also placed millions of Americas at risk of penalties. “Since the tax credits
trigger the tax penalties under the law’s employer mandate and individual mandate, the IRS’s rule extends those penalties
to people and employers in states that opted not to create a state exchange,” they write.
The senators note that on Dec. 9, during a House oversight hearing with CMS Administrator Marilyn Tavenner and
MIT economist Jonathan Gruber, Tavenner said that CMS would not be informing consumer about the potential changes
should the court rule in favor of King.
“Without the tax credits, millions of people will be confronted with Obamacare’s true cost and will face much higher
premiums. Some could see their coverage canceled. It is imperative that people understand this risk as they contemplate
signing up for coverage,” the senators say.
Lacking such information, the senators say, “many families could turn down more-secure coverage options
(e.g., through a different employer) in favor of less-secure Obamacare coverage.”
“We urge you to reconsider this position and to ensure that these Americans have all available information as they
make decisions about health insurance coverage next year,” they add.
The GOP senators further charge that many recipients would be responsible for repaying tax credits if the court rules
the subsidies cannot be accessed through the federal exchange.
The GOP letter also notes that while the administration is not protecting Americans by providing information about
the potential loss of subsidies, CMS did insert a clause in its contracts with insurers saying that they may pull out of the
contracts — subject to state law — if the subsides are no longer in play. “It is troubling that the administration decided to
protect insurers from a King ruling that restricts the law’s tax credits to state exchanges while at the same time failed to
inform people enrolled or considering enrolling in federal exchanges of the potential consequences of such a decision,”
the letter says.
HHS Secretary Sylvia Burwell has made it clear that the administration is confident the high court will rule in
its favor and that consumers should not be worried. “I think the most important thing for consumers to know is that
nothing has changed; that the tax credits that they’ll be signing up for and the ones that they have, for those who are
enrolled that we want to stay enrolled, will be continuing,” she said at a recent Center for American Progress event.
“And so as we go into open enrollment nothing has changed, and I think as the Administration has said, we believe
that the law stated that the tax credits are an important part of affordable healthcare coverage, and that is for all,” she
said. — Amy Lotven
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Health Exchange Alert - www.InsideHealthPolicy.com - December 24, 2014
Second Interferon-Free Hep C Rx Costs $83,319; Close To Sovaldi/Harvoni
FDA approved the second hepatitis C drug for use without interferon, called Viekira Pak, and AbbVie is charging
$83,319 for a 12-week course of the drug, a company spokesperson said, compared to the $94,500 12-week price of
Gilead Science’s Harvoni and the $84,000 price of Harvoni’s predecessor Sovaldi. Medicaid directors and health plans
anxiously awaited the approval of Viekira Pak in the hopes that AbbVie would significantly undercut the price of Gilead’s
hepatitis C drugs.
Despite the official price tag on Viekira Pak, an analyst said it would not be surprising if AbbVie offsers rebates to
get the drug on formularies.
Viekira Pak contains three new drugs—ombitasvir, paritaprevir and dasabuvir—that inhibit the growth of HCV. It
also contains ritonavir, a previously approved drug, which increases blood levels of paritaprevir. Viekira Pak can be used
with or without ribavirin, but it is not recommended for patients whose liver do not function properly, a condition called
decompensated cirrhosis.
FDA Director of the Office of Antimicrobial Products Edward Cox said Viekira Pak is the latest in a wave of drugs
that has made curing the infection much easier. “We continue to see the development of new all-oral treatments with very
high virologic response rates and improved safety profiles compared to some of the older interferon-based drug regimens,” Cox said.
However, one company, Gilead Sciences, has dominated the market, and health plans and Medicaid directors are up
in arms over the price the company’s drugs. (Several other health care sectors, including hospitals, physicians, unions,
disease advocacy groups and the nation’s largest seniors group, AARP, have also joined a campaign against the price of
Gilead’s drugs.) FDA first approved Sovaldi in December 2013, then this fall it approved the second-generation version
called Harvoni, which is approved for use without interferon or other drugs. Sovaldi was approved for use with interferon, which makes people sick, but doctors often prescribe Sovaldi with Johnson & Johnson’s Olysio, even though FDA
did not approve the drugs in combination, and the drugs together cost about $150,000.
Harvoni costs $94,500 for a 12-week course. Those who are less sick can take an eight-week course for $63,000 so
Gilead says the “average” price for Harvoni is $80,000. However, John Rother, who leads the Campaing for Sustainable
Rx Prices, said many health plans and Medicaid programs are treating only sicker patients so it’s uncommon for patients
to receive the shorter course.
The shortest course for Viekira Pak is 12 weeks, said AbbVie Director of External Communications Adelle Infante.
Very sick patients may need a 24-week course, depending on physician discretion, but the company expects that only a
small population of patients would need the longer course. Infante did not know the price of the 24-week regimen.
Viekira Pak’s regimen requires patients to take four to six pills each day, which is more complicated than the oncedaily pill Harvoni. The recommended dosing for Viekira Pak is two ombitasvir, paritaprevir, ritonavir 12.5 milligrams
(mg)/75 mg/50 mg tablets once daily and one dasabuvir 250 mg tablet twice daily. Patients with advanced liver damage
must take an extra medicine, ribavirin, which adds two more pills to the regimen.
The Centers For Disease Control and Prevention estimates that 3.2 million Americans are infected with hepatitis C.
Others say that estimate is low.—John Wilkerson
TN Hospitals Would Cover Share Of Medicaid Expansion Under Haslam’s Plan
In addition to establishing a Medicaid expansion plan built upon private and employer sponsored insurance, Tennessee GOP Gov. Bill Haslam’s newly unveiled proposal would require hospitals to cover the state share of the expansion
once federal funding dips from 100 percent to 90 percent after 2016. The proposal, dubbed Insure Tennessee, which is
expected to cover about 200,000 residents, also includes a fall back allowing the program to be terminated should federal
or hospital funding be modified in any way.
Craig Becker, president of the Tennessee Hospital Association, says that it is too early to know for certain how much
state hospitals will need to contribute to the expansion, but estimates range from $30 million in 2017 to $200 million in
2022. Hospitals believe that a 9-to-1 return on investment is a good deal, Becker said of the agreement. He also says that
the hospital’s share of the funding will be funneled to the state through an assessment on providers. There is already a 4.5
percent provider tax, and that amount will be increased to the appropriate levels to cover the needed funds, he said.
“For the past two years, THA’s number one priority has been securing Medicaid expansion in our state and today
marks the beginning of this goal becoming a reality,” Becker said in a release. “I also believe Insure Tennessee helps
provide a solution to the financial challenges hospitals across Tennessee have faced for the last several years as a result of
extreme cuts in healthcare reimbursement,” Becker said. “Extending healthcare coverage in Tennessee will lead to lower
amounts of charity and unreimbursed care, which helps keep hospitals financially healthy and providing high quality
care,” Becker added.
According to the governor’s Dec. 15 announcement and related slides, residents enrolled in the program
would choose from two options: the Volunteer Plan, which provides vouchers to help residents afford employerHealth Exchange Alert - www.InsideHealthPolicy.com - December 24, 2014
3
sponsored coverage, including premiums and cost-sharing; and the Healthy Incentives Tennessee plan, which allows
residents to enroll in the state’s Medicaid program (TennCare) but also creates HIT accounts — modeled after Health
Reimbursement Accounts (HRS), that can be used to cover other out-of-pocket costs.
Residents can “earn” HIT contributions through healthy behaviors, according to the governor’s office.
“We made the decision in Tennessee nearly two years ago not to expand traditional Medicaid,” Haslam said. “This
plan leverages federal dollars to provide health care coverage to more Tennesseans, to give people a choice in their
coverage, and to address the cost of health care, better health outcomes and personal responsibility,” he said.
He expressed hope the plan would spur innovation in the state’s existing Medicaid program. “I look forward to
working with providers across the state to advance payment reform and with members of the General Assembly to make
this plan a reality,” he said.
Haslam said he will call a special legislative session to discuss the plan, which would need to be formally
approved by the legislature and by CMS in order to proceed.
Tennessee GOP senators Lamar Alexander, the ranking member of the Senate health committee, and Bob Corker also
praised the move. “Governor Haslam deserves credit for insisting upon a Tennessee plan that the state can afford, and
Secretary Burwell deserves credit for being flexible enough to allow the governor to achieve that,” Alexander said.
Corker said he has had several talks with Haslam and “appreciates the work he and his team have done to study this
issue closely and negotiate a tailored solution that works for Tennessee.”
“I’m glad the administration has finally allowed appropriate flexibility, and I’m pleased our state was able to adopt a
solution that will build off of the innovative ways we deliver quality health care,” Corker added.
In related news, Corker and Alexander joined the state’s House delegation on Thursday (Dec. 18) in asking
CMS Administrator Marilyn Tavenner to extend a TennCare waiver that provides funding to hospitals in the state
that currently are not eligible for Medicaid disproportionate share hospital payments. State hospitals have been operating
on temporary funding, and the most recent “patch” expired on Sept. 30, they say in a letter to Tavenner.
The senators point out that the massive spending bill just signed by President Obama includes language that strongly
urges the continuation of the waiver amendment for a longer period of time in order to allow for Congress to adopt a
permanent solution for Tennessee. “To that end, we are committed to advancing a permanent solution in the next Congress and have worked collectively to insert language in the House Ways and Means Hospital Improvements for Payment
Act of 2014,” the members write. — Amy Lotven
GAO Appoints New MACPAC Members, Vice Chair
The Government Accountability Office on Friday (Dec. 19) announced six new members of the Medicaid and CHIP
Payment and Access Commission and the committee’s new vice chair.
The new vice chair of MACPAC will be Marsha Gold, senior fellow emeritus at Mathematica Policy Research.
Other new members include: Gustavo Cruz, senior adviser for Health Equity Initiative; Yvette Long, parent of a
Medicaid beneficiary and case manager at Philadelphia Welfare Rights Organization; Charles Milligan, senior vice
president for enterprise government programs at Presbyterian Healthcare Services; Sheldon Retchin, CEO of Wexner
Medical Center at Ohio State University; and Peter Szilagyi, vice chair for research in the department of pediatrics at the
University of California in Los Angeles. — Michelle M. Stein
Draft Letter Outlines 2016 Timeline, QHP Policy . . . begins on page one
the second between June 10 and July 14, 2014. After each review period, CMS will send out correction notices, and final
submissions are due on July 24.
Issuers may withdraw their applications at any time prior to July 24, and CMS says issuers will be given a final
opportunity to withdraw plans during the agreement signing process, which is set to take place from Aug. 17 through
Sept. 15
The agency says it intends to implement a “petition process” to review requests for significant changes — such as
service area or plan type — to an application. These requests must be submitted at least two weeks prior to the final
submission.
During previous cycles, CMS says, the vast majority of change requests made after the submission deadline were
related to data inaccuracies or incomplete applications. “Because an issuer’s failure to meet this required deadline calls in
to question an issuer’s ability to submit a valid QHP application, the issuer may be at risk of non-certification or complaint action,” the agency writes.
CMS says it will release further instructions on this process, and retains the ability to determine which changes are
significant and therefore subject to this process.
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Health Exchange Alert - www.InsideHealthPolicy.com - December 24, 2014
The letter also flatly states that ancillary insurance products and health plans that are not QHPs — including
stand-alone vision plans — will not be offered on the FFMs
For plans in FFE states that are doing their own plan management functions, the first data transfer is due on April 15,
the second transfer will be duevJune 9 and the final due on July 24. Transfers from states — via SERFF — will close on
July 25, and no changes will be allowed until CMS makes certification decisions and issuers sign the QHP agreement.
The letter further reveals that CMS intends to administer the auto-enrollment process in a manner similar to how it
was done for the 2015b pan year. For 2015, CMS had developed a “Plan ID Crosswalk Template,” which cross-walked
2014 plan ID and service areas combinations to a 2015 plan ID. The data is being used to facilitate the auto-enrollment
for enrollees that did not actively select a different QHP.
Additionally, CMS says that it will be adding auto-enrollment for the FF-SHOPs starting in 2016.
For Network adequacy, CMS says that, like 2015, the agency will assess provider networks using a “reasonable
access” standard. In order to determine an issuer meets that standard, CMS says a plan must submit detailed network
provider data as part of its QHP application, including information on physicians, facilities and pharmacies. CMS again
plans to focuses on areas that have historically raised adequacy concerns, including hospital systems, mental health
providers, oncology providers, primary care providers and dental providers, if applicable.
If CMS determines an issuer’s network is inadequate, it will notify the issuers and request that the problem is
addressed by either adding providers or submitting a justification explaining how the issuer will provide reasonable
access.
CMS says it will provide additional details on the collection method for network data and instructions on what
should be included in the justifications as part of the 2016 certification/re certification instructions. The agency also
reminds issuers that adequacy must be maintained throughout the year. The agency also intends to use information
learned during the QHP certification process as it develops future network adequacy standards and rulemaking.
The agency notes that the National Association of Insurance Commissioners has formed a work group to consider
revisions to its network adequacy model, and CMS plans to evaluate the results for future rulemaking.
CMS also writes that its 2016 approach to Essential Community Providers will be similar to that put forth in 2015.
Namely, isssuers must contract with at least 30 percent of available ECPs, offer contracts in good faith to all available
Indian health providers, and offer contracts in good faith to at least one provider in each of six ECP categories in each
county in a plan service areas. ECP categories include: Federally Qualified Health Centers, Ryan White Providers, Family
Planning Providers, Indian Health providers, Hospitals, and other ECP providers such as STD Clinics, Black Lung
Clinics and other entities that serve predominately low-income medically understand people. An offer of “good faith”
means it has terms that a “willing similarly —situated non—ECP provider would accept or has accepted.”
An issuer that does not satisfy the 30 percent standard must offer a narrative justification explaining how it will
provide access to those entities.
CMS also discusses potentially discriminatory benefit design in Essential Health Benefits. To that end, the agency
cautions both issuers and states that age limits are discriminatory when applied to services that have been found clinically
effective at all ages. “For example,” CMS writes, “it would be arbitrary to limit a hearing aid to enrollees who are 6 years
of age and younger since there may be some older enrollees for whom a hearing aid is medically necessary.”
The agency also warns issuers to avoid discouraging enrollment of people with chronic needs. “For example, if an
issuer refuses to cover a single-tablet drug regimen or extended-release product that is customarily prescribed and is just
as effective as a multi-tablet regimen, absent an appropriate reason for such refusal, such a plan design effectively
discriminates against, or discourages enrollment by, individuals who would benefit from such innovative therapeutic
options,” CMS writes.
Another example of discriminatory design would be if an issuer places all or most drugs that treat a specific condition on higher cost tiers, CMS says. Last year, consumer advocates filed a discrimination suit against four health plans in
Florida who had placed all of their HIV drugs — even generics — on the highest-cost tiers.
CMS says that it will be collecting attestations from issuers that they will not discriminate on basis of health status,
sex, race, color, national origin, disability, age, sex, gender identity or sexual orientation.
The agency writes that, as in previous cycles, it will perform an analysis on QHP cost sharing that will weigh benefit
packages with comparable cost-sharing structures to identify any cost-sharing outliers. Additionally, CMS says it is
considering conducting a review of each QHP “to identify outliers based upon estimated out-of-pocket costs associated
with standard treatment protocols for specific medical conditions using nationally-recognized clinical guidelines.”
The conditions under consideration include: bipolar disorder, diabetes, HIV, rheumatoid arthritis and schizophrenia
CMS will also be looking at plans’ language in their benefit explanation to ensure that it is not discriminatory.
QHP issuers will be required to comply with standards and requirements related to data collection for quality rating
information. Using QHP issuers’ validated data submissions, CMS will calculate quality rating system (QRS) scores and
enrollee survey results for each QHP using a standard methodology and assigning a rating of 1 to 5 stars. Issuers may use
that star rating in their marketing materials, as long as it is done in a way that does not mislead consumers. The agency
will issue further guidance on marketing.
CMS says it is continuing its phased approach to implementation of QRS scores and that ratings calculated in 2016
Health Exchange Alert - www.InsideHealthPolicy.com - December 24, 2014
5
will be displayed in time for open enrollment for the 2017 coverage year. CMS earlier this year published the QRS and
QHP enrollee survey technical guidance regarding the 2015 beta test, which CMS says is a “critical step” for CMS and
QHP issuers to prepare for 2016 public reporting.
CMS anticipates that it will refile technical guidance based on the beta test and publish any updates by fall 2015.
Comments on the draft letter are due by Jan. 12. — Amy Lotven
KY Exchange To Contact 12K Enrollees Eligible But Not Enrolled In CSR Plans
Staff with Kentucky’s state-based exchange this week will contact about 12,000 enrollees who are eligible for, yet
failed to enroll in, qualified health plans that provide cost-sharing reduction (CSR) payments, a move applauded by
several consumer advocates. Carrie Banahan, executive director of Kentucky’s Health Benefit Exchange, revealed that
the exchange would be reaching out to those residents, or their agents and brokers or in-person assisters, during a
Wednesday conference call sponsored by Families USA
Cost-sharing reductions, or CSRs, are payments provided to issuers in order to reduce out-of-pocket costs for
enrollees who earn between 100 and 250 percent below the poverty level. Those reductions are only accessible to those
who enroll in silver-level plans.
Banahan says that about 5,300 of those customers instead enrolled in a gold-level plan, more than 1,000 held a
platinum plan, and still others were enrolled in catastrophic coverage. The exchange will send letters specifically targeting those individuals with platinum and gold plans, according to Gwenda Bond, assistant communications director for
Kentucky’s Cabinet for Health and Family Services.
Bond said in an email Thursday (Dec. 18) that these customers could see significantly lower premium costs and
lower out-of-pocket costs “reflecting a 7 to 13 percent decrease.”
“The concept of cost sharing reductions was new under the ACA and was not a feature that was easily understood,
which we believe resulted in individuals failing to recognize the full benefits that were available to them,” she said,
referring to why people were not taking advantage of subsidy savings.
Marc Boutin, executive vice president and COO of the National Health Council, said Kentucky’s move is an exciting
step and “exactly what needs to happen.”
Consumers have been purchasing insurance without comprehensible information to make a good decision, which
means people are buying products that might not give them the best coverage at the best possible price, he said. “I think
you can almost guarantee that the vast majority of people” will enroll in the correct silver plan after being contacted,
Boutin said. “Calling these people up … that personal touch makes a big difference.”
He added that exchange websites rarely give the kind of prompts that customers need to fully understand
their choices, but that governments and insurers are trying to make these points clearer.
The information presented now focuses almost exclusively on premiums and deductibles, Boutin said. Kentucky’s
outreach speaks to enhancements the NHC has proposed in order to make plan details more understandable and usable,
he adds.
NHC currently offers a calculator on PuttingPatientsFirst.net where people can input details of their expected health
insurance use and compare plans in their state across metal levels to find the best coverage at the lowest price, including
cost-sharing reductions. The Kaiser Family Foundation hosts a similar subsidy calculator.
“It has to flow into the experience of the person who’s trying to select insurance,” he said.
Cheryl Fish-Parcham, private insurance program director at Families USA, said the most consumers would have to
pay out-of-pocket with a silver-level CSR plan in a year is less than they would with a bronze plan. The value of their
silver plan would be considerably higher and people would be better protected in subsidized higher-metal plans, she
added.
According to a Center for Budget and Policy Priorities brief, the CSRs increase the actuarial value of a silver-level
plan from 70 percent to 94 percent for people earning up to 150 percent of the federal poverty level (FPL). Actuarial
value increases to 87 percent for people earning from 150 to 200 FPL and to 73 percent for people earning from 201 to
250 FPL.
Judy Solomon, vice president for health policy at CBPP, said Kentucky has done a great job so far. But she added
that she’d like more clarity on what cost-sharing level these 12,000 residents are eligible for.
She points out that if a consumer qualifies for 73 percent actuarial value with the cost-sharing reductions, but seeks
80 percent coverage — and thus enrolls in a higher metal tier — she can understand that decision.
“But if your income is below 200 percent of the poverty line, you really should be taking those cost-sharing reductions,” she adds.
The availability of CSRs is an area where Solomon believes the message has largely gotten through for FFM
customers, though it does take a long time to walk people through their choices to decide what’s best.
A pop-up message on a website “isn’t going to do it for a lot people,” she said, but it’s “better than not doing it …
people have spoken favorably of it.”
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Health Exchange Alert - www.InsideHealthPolicy.com - December 24, 2014
Boutin at the NHC believes other states should adopt outreach to this group as a best practice through at least
2015. Making data more transparent and machine-readable so consumers can fully explore their options online should
become the standard in the next few years, he said.
“For those states where the population is manageable and there are resources, it would be ideal,” Boutin said. “In the
long term, we need greater refinement for information.”
A PhRMA-funded analysis by Avalere Health in June also found broad differences in how issuers amend plan
designs to meet cost-sharing requirements for those receiving cost-sharing reductions. Almost all plans reduce
deductibles and out-of-pocket caps in plans with CSRs, but many do not lower cost sharing for other treatments and
services like specialty drugs.
“Many people assume that the lowest-income exchange enrollees will have reduced cost-sharing across all services,
but the reality is quite different,” Avalere Vice President Caroline Pearson said in the study overview. “While all plans
must have reduced out-of-pocket limits for individuals earning less than 250 percent of poverty, how consumers will
reach those limits differs significantly. For example, consumers may not experience reduced cost-sharing amounts for
drugs or physician visits in many plans.”
Avalere also found that “average maximum out-of-pocket limits in CSR plans are lower than those required by the
Affordable Care Act.”
“Issuers will continue to have flexibility in how they design cost-sharing reduction plans in 2015,” Avalere CEO
Dan Mendelson said of the findings. “Looking ahead, consumers who qualify for cost-sharing reductions should
look closely at how the plan benefit is structured because it could have a major impact on their actual out-of-pocket
costs.” — Rachel S. Karas
State Exchange Officials Report Strong Enrollment Interest
Several state-based exchange officials said they were seeing strong interest in enrollment as they revealed updated
figures and offered insights into the first few weeks of open enrollment during a Families USA-sponsored conference call
Wednesday (Dec. 17).
Donna Frescatore, executive director of the New York Health Benefit Exchange, reported that the exchange had
about 194,500 new enrollees as of close of business on Tuesday (Dec. 16), about 40,000 of whom came in from Friday
(Dec. 12) through Tuesday (Dec. 17). About 60 percent of the newly enrolled were Medicaid-eligible, while the remainder included those selecting qualified health plans and those eligible for the state’s CHIP program. Covered California
Chief Deputy Yolanda Richardson said that the exchange had about 592,000 total enrollees, of which 144,000 have
selected QHPs. Neither New York nor California have completed their auto-enrollments so they had no solid data to
report. However, Frescatore did say the exchange sent re-enrollment notices to 300,000 residents, out of which 200,000
met the criteria to be auto-enrolled in their existing plan.
New York extended its enrollment deadline from Monday (Dec. 15) to Saturday (Dec. 20) due to a large
snowstorm, so Frescatore says there will be more information on enrollment and re-enrollment once that deadline
passes.
Carrie Banahan, executive director of Kentucky’s exchange, says her state is off to a strong start. Kentucky has
already renewed 75,760 existing enrollees — after encouraging them to shop first. She says 21,456 made some changes
to their plans, but had no further details. She also reported 25,354 new exchange enrollees. About 9,200 of the new
enrollees selected QHPS, and 6,000 of those were eligible for tax credits, Banahan said. Another 16,000 were enrolled
into Medicaid.
Richard Onizuka, CEO of WashingtonHealthPlanFinder, which had some challenges in the beginning of the enrollment period, reported that as of last week there were more than 55,000 enrollees. According to the exchange, there were
45,843 QHP renewals and 10,082 enrollees as of Dec.10.
The exchange officials were unable to answer questions about demographics of the enrollees, saying that it is still too
early to determine that information. They all also cited the importance of face-to-face assistance to help consumers
understand their choices and enroll in coverage.
The new enrollment numbers came one day after HHS reported that about 2.5 million people had selected plans via
healthcare.gov by the Dec. 15 deadline to have coverage effective Jan. 1, 2015. Another 500,000 consumers who provided their contact information to the federal call center can still select a plan effective Jan. 1, officials also said Tuesday
(Dec. 16).
Also Wednesday (Dec. 17), Minnesota and Colorado updated their enrollment figures.
Colorado reported that the initial four weeks of open enrollment saw a total of 108,077 enrollments in QHPs ,
including 18,893 new enrollees and 89, 184 renewals. Connect for Health Colorado also enrolled 18,075 individuals in
dental plans, the exchange said.
Minnesota’s exchange reported that as of Tuesday , 23,797 residents had enrolled in QHPs. MNSure’s deadline for
Jan. 1 coverage is Dec. 20. — Amy Lotven
Health Exchange Alert - www.InsideHealthPolicy.com - December 24, 2014
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DOL Proposes Limited Wraparound Benefits . . . begins on page one
Union, generally supported the concept of wraparound coverage for those without affordable employer-based coverage
but complained that parameters suggested by the administration would prevent the part-time, low-income employees who
most need a health plan from accessing that coverage.
The proposals would allow group health plan sponsors, in limited circumstances, to offer wraparound coverage
to employees who are purchasing individual health insurance in the private market and the exchange, the administration said in a release. Union representatives and other labor advocate groups did not respond to request for
comment by press time.
“The proposed rules would give employees who otherwise may not be able to get generous employer-based benefits
access to high level benefits,” the release says. “The proposed rule would give businesses, including small businesses,
new flexibility to meet the unique needs of their workforces.”
The rule would create two pilot programs for wraparound coverage, according to the administration: One would
allow wraparound benefits only for multi-state plans in the health insurance marketplace. The other would allow wraparound benefits for part-time workers who could otherwise qualify for a flexible savings arrangement and enroll in an
individual market plan.
Such coverage could provide benefits for items and services not allowed or unlikely to be ACA essential health
benefits, including routine adult vision and dental care, long-term care and non-medically necessary pediatric
orthodontia, Inside Health Policy previously reported about a Dickerson Employee Benefits summary of the
December 2013 proposal.
If approved, both pilots could be offered as excepted benefits to coverage first offered no later than Dec. 31, 2017,
and would end either three years after the day wraparound coverage is first offered, or the date on which the last collective bargaining agreement relating to the plan ends after the day wraparound coverage is first offered, whichever is later.
Wraparound limited benefits would have to meet five requirements to constitute excepted benefits for either eligible
individual insurance or a multi-state plan. In this case, eligible individual plans are those that are not grandfathered, are
not transitional individual health insurance market plans, and do not consist only of excepted benefits. The requirements
include:
• Limited wraparound coverage would have to provide “meaningful benefits” beyond cost-sharing, like coverage for
expanded in-network medical clinics or providers.
• The annual cost of coverage per employee and any covered dependents could not exceed $2,500, or the maximum
annual contribution for health FSAs. That limitation should be easier to administer than the 15 percent cap that was
included in the 2013 proposed regulations, the document says.
• Three nondiscrimination requirements related to preexisting conditions, health factors of individuals or dependents,
and income laws.
• Individuals eligible for limited wraparound coverage cannot be enrolled in excepted benefit coverage that is a heath
FSA.
• Reporting guidelines are offered for self-insured group health plan or insurance issuers to correspond with OPM.
Under the first pilot plan, sponsors’ plans can be offered only to part-time employees or retirees and dependents and
can only wrap around their eligible individual health insurance. The proposal defines full-time employees as those who
are “reasonably expected to work at least an average of 30 hours a week.”
Those plan designs will be limited by rules that prevent sponsors from favoring highly compensated employees or
offering different benefits for different workers based on factors like their health status. At least 95 percent of full-time
employees would also have to be able to afford the coverage.
Wraparound coverage in the second plan must be approved by OPM and be offered with ACA-authorized MSP
coverage. Employers need to have offered coverage in the 2014 plan year that satisfied the relevant requirements, and the
employer’s annual contributions for primary and wraparound coverage must be at least 80 or 90 percent of its total
contributions to plans for full-time employees in 2014.
The proposal does not cite an expected cost or federal budget impact because the number of sponsors and employees
to be covered by the benefits is unknown. It says it would impose no additional costs on employers or plans, adding that
Employers still have the option not to provide adequate health care at all.
“The decision to offer the limited wraparound coverage is optional,” the proposed rule says, noting added complexity
should an employer sign on. “Given a choice, some plan sponsors may choose to increase the affordability of their
primary coverage rather than offer limited wraparound coverage. Some plan sponsors may not have that choice: the
employers may not be in a financial position to make their primary health plans affordable to more workers, let alone
contribute to wraparound coverage.”
The amendment is expected to please retailers like Target and Trader Joe’s, who announced that they would no
longer provide health coverage to part-time employees due to ACA restrictions. The administration hopes to change that
by expanding their view of who should qualify for benefits.
A 60-day comment period will begin Dec. 23 once a notice is entered in the Federal Register. — Rachel S. Karas
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Health Exchange Alert - www.InsideHealthPolicy.com - December 24, 2014
HHS Partners With Business, Health Websites To Spread Open Enrollment Info
HHS will partner with the job search site Monster.com, sharing-economy platform Peers.org and the health-andwellness tracker Higi.com to share enrollment information and encourage consumers to purchase health care, Secretary
Sylvia Burwell announced Wednesday (Dec.17).
HHS will pitch its open enrollment message in slightly different ways on each site. On Monster, HHS is simply
posting information about open enrollment to offer unemployed job-seekers the chance to have health care while they do
not have the option of employer-provided care.
“We identified this collaboration as a great opportunity to provide our broad U.S. audience of consumers and job
seekers with timely and accurate information regarding the Affordable Care Act,” Melissa Wojciak, vice president of
government relations at Monster Worldwide, said in the announcement. “We were happy to coordinate closely with HHS
on such an important endeavor.”
The department plans to host a live video chat with an HHS official to answer questions from the Peers community,
and the website will share information on how to enroll through HealthCare.gov.
“The Health Insurance Marketplace gives Americans the flexibility to start their own business without relying on
employer-based insurance,” HHS said in its release. “Because people who work in the sharing economy are microentrepreneurs, by partnering with Peers, HHS can provide affordable, quality health insurance information to the Peers
community.”
Higi launched its messaging at its department and grocery store kiosks Dec. 5 and will run it until open enrollment ends on Feb. 15. Higi users can create accounts to track their health vitals like blood pressure, weight and body fat.
Richard Hirsch, the company’s senior vice president of marketing and media, said many consumers habitually use the
kiosks during regular shopping trips.
“We are thrilled, in tandem with our retail partners, to be able to offer our support in promoting the Health Insurance
Marketplace to millions of consumers at such an impactful time in their daily routine - while they are engaged in their
health and wellness,” Hirsch said. “This messaging will get significant and repeat exposure to a highly relevant target
audience.”
Monster has more than 200 million registered users in more than 40 countries, while the newer Peers has 250,000
members worldwide. Higi can be found in 2,000 Kroger, 1,000 Super Valu/Albertson’s and 250 Meijer stores across the U.S.
These collaborations come on the heels of last week’s announcement that HHS will work with the electronic payment
company PayNearMe to advertise enrollment deadlines on receipts generated at select 7-Eleven, Family Dollar and ACE
Cash Express stores. HHS touted that partnership as an effort to draw in more unbanked or cash-preferring — and
traditionally low-income or uninsured — Americans. — Rachel S. Karas
CMS: Nearly 2.5 Million Users Enroll In FFM While 500K Get Called Back
HHS officials on Tuesday (Dec. 16) touted a strong, yet imperfect, start to open enrollment and said almost 2.5
million users had chosen a plan through HealthCare.gov as of midnight Friday (Dec. 12). Officials also said that around
500,000 customers left their contact information with federal call center representatives Monday night (Dec.15) while
staffers struggled to field a higher-than-normal volume of calls due to the deadline to enroll in order to have coverage
effective by Jan. 1, 2015.
Staffers have already started calling those “several hundred thousand” users back, Principal Deputy Administrator
Andy Slavitt said, noting that they will have “several days” to finish their applications. The center received more than a
million calls on Monday alone, and the site had more than 3 million unique customers in the final hours before the
deadline, officials said.
Healthcare.gov saw more than 125,000 concurrent users at its peak volume without running into technical problems,
Slavitt added. HHS used one of its “waiting room pages” for around 90 minutes Wednesday, with several hundred
thousand people waiting an average of three minutes to create new accounts. Other users, like those window shopping on
the site, were not affected by waiting room delays.
Officials also said that they have started the auto-reenrollment process for existing consumers who did not yet
proactively enroll in another option. Administration officials also stressed that existing and new consumers still have
time to shop and enroll in a plan prior to the Feb. 15 end of open enrollment.
FFM CEO Kevin Counihan said that less than 5 percent of the 6.7 million effectuated FFM enrollees — or around
355,000 people — whose plans were discontinued for 2015 will be enrolled in similar plans within the same metal level
unless they opt for different coverage.
If the plans aren’t substantially similar, Counihan said, insurers will reach out to consumers and let them know their
previous plan is no longer available.
CMS is also sending daily updates to insurers to notify them when consumers switch issuers, but not when someone
changes plans within those issuers. Counihan said that insurers have appreciated the help, and the “switch file” has
Health Exchange Alert - www.InsideHealthPolicy.com - December 24, 2014
9
worked well since it began earlier this month.
Though the picture of open enrollment so far is largely rosy — fewer glitches, satisfied customers and a working
electronic system that verifies income and immigration information — the officials said they have taken great pains to
report upon each step of the process and tried not to forecast what may happen in the future.
CMS spokeswoman Lori Lodes said HHS has taken “extreme steps” to train call center workers and said cases of
giving consumers misinformation are rare. The officials said that while the process has not been perfect for every customer, they are confident in their infrastructure’s ability to deal with unexpected and individual problems.
“Yes, there will be something,” Counihan said of bumps in the road going forward. “We don’t know what it’s going
to be or when it’s going to hit but we will smooth it out.”
Next week’s set of enrollment numbers are expected out Dec. 23.
News that 2.5 million consumers have already selected plans through Healthcare.gov came the same day Energy and
Commerce Democrats issued a report saying that FFM state consumers could lose $65 billion annually in subsidies if the
Supreme Court rules that the tax credits cannot go to residents in those states.
Neera Tanden, CEO of the Center for American Progress, said in a statement that the HHS announcement “is a
reminder of what is at stake in the months ahead.”
“At the same time millions of people are shopping for a health plan that fits their needs and budgets, conservatives
are plotting how to undo the progress that has been made. Whether it is holding more votes in the House and Senate or
trying to use the Supreme Court to do it for them, their goal is the same: to repeal the Affordable Care Act and take away
people’s health care,” she said.
“A Congress or Court that chooses to go down that path would put not only these people’s care at risk but their own
legitimacy as well,” Tanden adds. — Rachel S. Karas
Exchange Round-Up . . . begins on page one
In announcing that 2.5 million people had selected plans as of last Monday, HHS also said that about 500,000 people
who were caught up in long waits at the federal call center would still be able to sign up for coverage beginning Jan. 1.
The department is expected to provide an additional update on the numbers this week.
State exchanges are also seeing strong enrollment: On Wednesday (Dec. 17 ) six exchanges reported a total of about
600,000 QHP selections.
Also, preliminary Medicaid/CHIP numbers were released showing that 9.7 million more people were enrolled
through those programs at October’s end than the average monthly enrollment from July to September 2013, although
Connecticut and Maine were not included in that count. More than 68.5 million Americans were enrolled in Medicaid and
CHIP nationwide at the end of October, including around 428,000 who signed up that month, according to the data.
HHS last week also continued to announce partnerships with private entities that aim to spread the word
about open enrollment. First, the department revealed a partnership with websites Monster.com, Peers.org and the
health-and-wellness tracker Higi.com. On Friday, HHS announced it had teamed up with the largest pharmacies in the
country, including Ahold USA Companies, Bi-Lo Holdings, CVS Health, H-E-B, Kroger, Rite Aid, Walgreen’s and
Walmart. Pharmacy staff have been trained to answer questions, provide materials and some will be holding in-store
enrollment events, HHS says.
“Pharmacies and pharmacists are a trusted source of information for consumers who have health-related questions,
and they can provide information directly to consumers looking for quality and affordable health coverage on the Health
Insurance Marketplace,” HHS Secretary Sylvia Burwell said. “These collaborations are integral to getting information
directly to consumers from trusted health care providers in their communities.”
Democrats and the administration also celebrated data released Thursday by the National Center for Health Statistics,
which found that 11.3 percent of Americans were without coverage in the second quarter of 2014, down from 13.1 percent in
the first quarter and 14.4 percent throughout 2013. The data translates into about 9.7 more covered Americans, according to the
While House Council of Economic Advisors. “As this week’s data confirm, 2014 has seen dramatic coverage gains, gains
matched or exceeded only by those seen in the decade of rapid progress that followed the creation of Medicare and Medicaid,”
wrote Council Chairman Jason Furman and CEA Senior Economist Matt Fiedler. ”Following this year’s gains, we estimate that
the Nation’s uninsured rate is now at or near the lowest levels ever recorded across the 50 years for which we have data.”
Democrats last week also issued a report finding that residents in 35 states would lose about $65 million per
year in tax credits if the Supreme Court rules against the administration in King v. Burwell and finds that credits cannot
flow through the federal exchange. Retiring House Energy and Commerce ranking member Henry Waxman (CA) released
a district-level analysis of the potential impact. Meanwhile, a group of Senate GOP leaders is asking HHS to inform the public
that subsidies are at risk depending on how the high court rules and to explain its fallback plan via its 2016 budget request.
In regulatory news, the Department of Labor on Friday proposed a rule [80651] that would allow group health plan
sponsors, in limited circumstances, to offer wraparound coverage to employees who are purchasing individual health
10
Health Exchange Alert - www.InsideHealthPolicy.com - December 24, 2014
insurance in the private market and the exchange. The rule would create two pilot programs for wraparound coverage,
according to the administration: One would allow wraparound benefits only for multi-state plans in the health insurance
marketplace. The other would allow wraparound benefits for part-time workers who could otherwise qualify for a flexible
savings arrangement and enroll in an individual market plan.
The proposed rules would give employees who otherwise may not be able to get generous employer-based benefits
access to high level benefits, and would give businesses, including small businesses, new flexibility to meet the unique
needs of their workforces, the administration said in a release.
CMS’ Center for Consumer Information and Insurance Oversight last week released the Draft 2016 Letter to FFE
Issuers, which, among myriad other policies explained that plans must submit their QHP applications from March 16 to
April 15, 2015 — two months earlier than last year. Plan agreements will be signed by Sept. 15, a couple weeks before
the planned Oct. 1 launch of open enrollment, CMS says in the letter, which provides technical and operational guidance
for issuers participating in the FFE.
The 59-page letter released Friday (Dec.19) also discusses policy related to network adequacy, essential
community providers and non-discrimination in essential health benefit and formulary design, among other issues. The
agency says it will be keeping a standard for Essential Community Providers similar to the one in place for 2015 requiring that
plans include 30 percent of ECPs in their networks. The agency says it will also be monitoring QHPs for potentially
discriminatory plan design and behaviors, including when plans place medications for a specific disease on a higher tier.
Last year, the AIDS Institute and the National Health Law program filed a complaint with HHS over four Florida
QHPs’ move to place all AIDs drugs — even generics — on high cost tires. Humana last week reached an agreement with
Florida’s insurance department under which the plan will lower patient cost-sharing for the more costly HIV drugs from
50 percent to 10 percent. And for drugs that cost less than $600 there will now be e $50 co-pay. The AIDS Institute and
NHeLP praised the agreement, but noted that the complaint still stands and that HHS has yet to take action.
In the States:
California Insurance Commissioner Dave Jones on Thursday (Dec. 18) said that Aetna Life Insurance Company’s
small group plan rate filings — which had an average 10.7 percent increase effective Jan. 1, 2015 — were both “excessive and unreasonable.” The increase, which will still go into effect, will impact 64,000 small group policy holders, Jones
says. The Department of Insurance says its actuaries found Aetna’s assumption that people enrolled in the ACA-compliant
plans are less healthy than the older plans “contradicts Aetna’s experience” and notes that any such adjustment should be
offset by the federal risk adjustment program, so this should not result in a rate increase. The department also says the
company’s utilization assumption that use will grow by 2. 5 percent is unjustified based on recent history.
Alabama Community Care announced it has been approved to provide Medicaid managed care services to about
200,000 residents as part of an effort to “transform care delivery, expand access, improve outcomes and address provider
reimbursement.” ACC is a non-profit regional care organization, and a partnership among Huntsville Health System,
DCH Health System, Whatley Health Services, Indian Rivers Community Health Center, Greater Alabama Health
Networks and Virginia-based Sentara Healthcare, the company explains.
Vermont last week scrapped plans for its single-payer health insurance system, dubbed “Green Mountain Care,”
after Democratic Gov. Peter Shumlin’s office and economic consultants William Hsiao and Jonathan Gruber couldn’t
quite make the numbers work. Economic models found that what Vermont wanted to build would require about $2.5
billion in additional revenue in its first year — almost twice as much as what the state raises in taxes each year to cover
every state-funded program. If the plan had worked, Vermont would have created the country’s first universal health care
system funded entirely by the government. Vermont’s deadline for residents to enroll in health insurance effective Jan. 1
through its state exchange, Vermont Health Connect, is Dec. 31.
Massachusetts’ Health Connector and MassHealth call centers reported extremely high call volume and longer-thannormal wait times Monday (Dec. 22), as people scrambled to find coverage that starts Jan. 1 by the state’s Tuesday (Dec.
23) deadline. More than 114,000 residents had enrolled as of Dec. 18, according to MA Health Connector website.
Rhode Island’s exchange enrolled 2,522 new customers from Nov. 7 through Dec. 13, according to a Dec. 19
HealthSourceRI release. Around 9,800 renewed their insurance, bringing the state total to more than 12,300 as of Dec.
13. The state’s deadline is Dec. 23 for coverage effective Jan. 1, Jan. 23 for coverage that begins on Feb. 1 and Feb. 15
for coverage that begins March 1. Exchange demographic data show that more women than men purchased insurance
through the exchange; residents age 55 and older held the highest percentage of enrollees at 35 percent; nearly two-thirds
of enrollees chose a silver-level plan; and 55 percent received advanced premium tax credits and cost-sharing reductions.
Washington state’s exchange will end enrollment for Jan. 1 coverage at 5 p.m. Tuesday. Washington Healthplanfinder on
Dec. 11 announced that around 56,000 residents had signed up for qualified health plans or renewed their coverage for 2015.
Exchange CEO Richard Onizuka said Dec. 17 that the numbers had blown out the state’s goal of enrolling 250,000 in
Medicaid by 2018, with around 480,000 residents already signed up as of Dec. 11. — Amy Lotven and Rachel Karas
Health Exchange Alert - www.InsideHealthPolicy.com - December 24, 2014
11
Waxman Details State-By-State Impact If Administration Loses King V. Burwell
Outgoing House Energy and Commerce Ranking Democrat Henry Waxman (CA) on Tuesday (Dec. 16) released
a report breaking down the state-by-state — and district level — impact if the administration ends up losing the
high-profile Supreme Court case King v. Burwell that will determine whether the IRS overstepped in saying ACA
subsidies are available for health insurance bought through the federal exchange. The report finds that consumers in
the affected states would lose a total of about $65 billion in tax credits if the high court the subsidies are not
available.
The report is based on the Congressional Budget Office’s most recent assumptions that more than 13 million
people would have coverage by 2016. Staffers also used HHS’ enrollment figures by zip code to develop the
analysis.
The state facing the most impact is clearly Florida, whose residents stand to lose about $12.3 billion annually in tax
credits if the administration loses the case, followed by Texas, which would lose about $8.5 billion. North Carolinians
would lose about $4.5 billion, Georgians about $3.8 billion, Pennsylvanians about $3.5 billion and Michiganers about
$3.3 billion in subsidies, according to the report.
“As today’s report makes clear, if the law’s opponents succeed, they will deprive Americans of $65 billion in tax
credits, making it more difficult for millions of middle class families to have the health insurance coverage they need,”
Waxman said.
House Minority Leader Nancy Pelosi (D-CD-CA) in a separate statement called on the law’s opponents to “withdraw
their radical suits and recover their common sense.” She added, “I am very confident that the Supreme Court will issue a
ruling upholding the ACA and rejecting the baseless arguments of the challengers in this lawsuit.”
The high court announced Nov. 7 that it would take up the case — King v. Burwell — for review this session even
though similar cases were still winding through the lower courts. At the time of the decision, the administration had been
preparing to argue its position in Halbig v. Burwell before a full panel of judges in the federal Court of Appeals in DC.
The case was set aside following the SCOTUS announcement.
At issue is whether the IRS overstepped its authority in saying that individuals living in federally facilitated exchange
states have access to the subsidies, even though the law says that the tax credits are available to those enrolled in exchanges established by states. ACA supporters argue that Congress clearly intended to provide subsidies to all Americans,
not just those in states opting to run their own exchanges, and say that a reading of the full law would support that
argument.
Oral arguments are expected in March, with a decision likely to be out in June.
What will happen to consumers — and insurers — should the court rule in favor of the plaintiffs is a key
question being explored by wide-ranging stakeholders and policy experts.
In a piece in the New England Journal of Medicine published last week, three experts — Nicholas Bagley, David
Jones and Tim Jost — wrote that some stakeholders, generally those who aim to minimize potential chaos and calm jittery
investors — argue that a ruling in King’s favor would not be disastrous. But the three experts say: “(We) are not so
optimistic.”
Should the justices rule against the administration, they note, the decision would go into effect 25 days later at which
time Treasury would likely stop making the subsidy payments. “Enrollees who are unable or unwilling to pay the full cost
of their insurance premiums could see their coverage terminated, perhaps as soon as 30 days after they fail to make a
payment. Those who retain insurance are likely to be sicker than those who drop coverage, which will skew the risk pools
and expose insurers to large, unanticipated losses,” they write.
The trio note that some experts have suggested HHS could count partnership states as state-based exchanges, but
they say this could spur more legal action. States may also be able to contract out the technology, but it’s unclear if a state
that has not created an exchange board would be able to do so, they say. Some experts have also suggested that the State
Innovation Waivers — which allow states to avoid some ACA provisions in favor of their own health reforms — could be
used as a fallback, however, they note, those do not go into effect until 2017. Additionally, the waivers would not be
useful for FFM states since the law says they would only provide the states money they would otherwise get under the
ACA for those purposes.
They also argue that even if a governor in one of the FFM states is interested in creating an exchange, GOP-led
legislatures — which may not have time to meet prior to the decision — may not budge.
“Unquestionably, state officials would face enormous pressure — from taxpayers, health plans, and hospitals — to
set up exchanges. In a volatile political environment, some states might well do so. But ACA opponents’ commitment to
resisting the temptation of federal money should not be underestimated: Witness the refusal of nearly two dozen
states to expand Medicaid even though the federal government would cover almost all the costs,” they write. “ACA
supporters thus have good reason to worry. For at least several years, and perhaps for much longer, the outcome in
King could determine whether millions of people continue to have access to affordable, comprehensive health
insurance.” — Amy Lotven
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Health Exchange Alert - www.InsideHealthPolicy.com - December 24, 2014