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The Congressional Budget Office (CBO) last week released an updated report on the nation's budget and economic outlook that comments on a number of health care policy issues. First, the CBO says that if another physician payment "fix" is enacted by Congress (as has happened every year since 2003), then spending on Medicare could be significantly more than the amount projected in CBO's baseline. Under current law, Medicare physician payments rates are scheduled to be reduced, but if those rates stayed the same through 2021 then Medicare outlays over the next 10 years would be $300 billion more than projected. The CBO also estimates that federal Medicaid spending will increase by less than 1 percent this year, compared to an average annual increase of 8 percent between 2000 and 2009. The slowdown is due to the expiration of increased federal assistance to the states for Medicaid in 2009 and 2010. Finally, CBO is anticipating a one-year delay in the implementation of the Community Living Assistance Services and Supports (CLASS) Program created under the Affordable Care Act (ACA). CBO projects the program won't begin collecting premiums until 2013. Some in Congress have called for repeal of the ACA provision creating the CLASS program because of its long-term cost.

Aetna participated in one of two "Exchange Listening Sessions" hosted by the Department of Health and Human Services (HHS) for community organizations and nongovernmental stakeholders. The meeting opened with an overview of the Notices of Proposed Rule Making (NPRM) on Exchanges, Plan Standards, Eligibility and Enrollment; Medicaid Eligibility and Enrollment and Tax Credits. Comments from advocacy groups essentially called for the following:

     Seamless interfacing of the eligibility system for Medicaid recipients, particularly the population impacted by the coverage expansion

    Credentials of Navigators (requiring more from community groups to avoid broker dominance)

    Parameters to constrain states from using flexibility as a guise to retreat from ACA requirements

    Improved foreign language translations of the material on the HHS website

    Stricter scrutiny of exchange board membership

    Alignment of Medicaid eligibility/enrollment rules with an exchange open enrollment period

    Integrating the exchanges with other public service agencies

    Requiring all carriers to contract with essential service providers

Joel Ario, Director, Office of Health Insurance Exchanges, remarked that the overarching goal of the exchanges was to expand consumer protections through greater transparency. His response to concerns about adverse selection was to point to the availability of the "young invincible" policy and the "3 Rs" -- risk adjustment, risk corridors and reinsurance -- as solutions. Regarding the potential for exchange products to not be affordable, Ario said the goal of the exchanges is solely to expand access and that the cost issue will be addressed by exchanges becoming "active purchasers".CALIFORNIA: As expected, consumer groups are threatening to push for a measure on the November 2012 ballot that would let voters decide on whether rate regulation of health insurance premiums should be allowed. Consumer groups plan to prepare the ballot language and submit the measure to the state Attorney General by November. Then the group will start collecting the 700,000 signatures necessary to qualify for the ballot. Exactly what the ballot language would require is not yet known, but it would likely look similar to legislation currently pending in the legislature.  The legislation would require prior approval of all health insurance rates, payment of intervener fees, approval of employer benefit design changes and rate rollbacks. Consumer groups seem to be turning their attention toward a potential ballot measure rather than the legislative vehicle since the bill has come under strong opposition from not only health insurers and business groups but also CalPERS, the League of Cities and the State Department of Finance.  

In other news, the California Health Exchange Board selected Peter Lee as its Executive Director.  Most recently Lee was deputy director for the Center for Medicare and Medicaid Innovation at the Centers for Medicare and Medicaid Services. Lee previously served as executive director and CEO of the Pacific Business Group on Health. That role is similar to the one that the exchange is expected to play on behalf of individuals and small businesses.IDAHO: The legislature's interim Health Care Task Force met last week to address issues that include federal health care reform and the future Idaho Health Insurance Exchange. Despite his hostility toward federal health care reform and his executive order prohibiting many activities that would implement the ACA, Governor C.L. "Butch" Otter indicated that the state would continue efforts to establish an exchange. Otter argued in support of the state's acceptance of federal grant money to establish the exchange, stating that Idaho could see the loss of significant federal funds without quick action. Otter pointed out that failure to establish a state-based exchange would devastate health insurance agents in the state and would allow the federal government to dictate health insurance policy for Idaho. Noting that he does not need approval from the task force or legislature to apply for the grant money, the governor indicated that he had made the decision to pursue federal funds for an exchange.

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Following the governor, representatives from the Idaho Department of Health and Welfare (Richard Armstrong, Director) and the Idaho Department of Insurance (Bill Deal, Director) made the case that action is necessary to address unsustainably high health care costs and inefficiencies in the marketplace. Specifically, they argued that operating the exchange at the state level allows the state to continue to govern the market, decide which carriers participate and pursue state-specific policies to assure competition and choice. According to regulators, the planning process for the exchange is underway and has thus far focused on obtaining stakeholder input and developing background research. Armstrong and Deal pointed to four potential courses of action for the state: apply for funding for an Idaho exchange; wait for lawmakers to decide options for an exchange; return/accept funding for an Idaho exchange based on state decisions; and decline to pursue additional federal grants, forfeiting the opportunity to decide on an exchange at a later date.MICHIGAN: A 1.0 percent medical claims tax has passed both houses of the legislature and is now headed to Governor Rick Snyder for his signature. Having originated the idea in the Administration's initial budget, the governor is fully expected to sign it.  The tax replaces the existing 6 percent tax on the state's Medicaid HMOs and the $1.2 billion it raises for the Medicaid program. The law allows for a maximum of $400 million to be collected from the medical claims tax, which would permit the state to receive another $800 million in federal matching Medicaid dollars for calendar years 2012 and 2013.  

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