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Aetna’s weekly healthcare update-11-4-2013

Health Reform Weekly

A weekly compilation from Aetna of health care-related developments in Washington, D.C. and state legislatures across the country.


Week of November 4, 2013

The impact of federal website problems on public exchange enrollments was widely reported last week, but a Washington Post story focused on a surprising and potentially serious concern in particular. The Post is reporting that a “crush of people” are applying for expansion of Medicaid coverage while enrollments in the exchanges continue to trickle in. If the trend continues, it could prove costly for the states, which will pick up 10 percent of the cost of the expanded coverage after the first three years. In Maryland, 96 percent of the new enrollments are in expanded Medicaid coverage vs. the public exchange. In Oregon, 56,000 residents signed up for expanded Medicaid coverage in the first two weeks of October while no one enrolled in the public exchange. Enrollments in public exchanges are expected to pick up as the technical issues behind the launch are resolved, but experts warn the uncharted waters of the Affordable Care Act (ACA) make it difficult to predict a particular outcome.

In other news, the U.S. Treasury Department announced last week that it will change the use-it-or-lose-it rule for health care
flexible spending accounts (FSAs). The move permits employers to allow employees to carry over up to $500 in unused FSA funds from one plan year to the next.


Much-publicized ACA implementation issues were the focus of two hearings in the House of Representatives last week.
 Secretary of Health and Human Services (HHS) Kathleen Sebelius testified before the House Energy and Commerce Committee while Marilyn Tavenner, Administrator of the Centers for Medicare & Medicaid Services (CMS) testified before the House Ways and Means Committee. The Secretary apologized for the “flawed launch” of the website and acknowledged that it has been a “miserably frustrating experience” for many Americans.   Tavenner told the committee that the problems with the website “can and will be fixed” and that “by the end of November the experience on the site will be smooth for the vast majority of users.”  Two hearings on ACA implementation are taking place this week in the Senate.

Leaders of the Senate Finance Committee and the House Ways and Means Committee have released a discussion draft outlining a bipartisan proposal for repealing and replacing the Medicare Sustainable Growth Rate (SGR) payment formula. 
Adopted as a result of the Balanced Budget Act of 1997, SGR is a legislative attempt to control spending on Medicare physician payments. However, in recent years Congress has passed a series of short-term fixes to prevent severe cuts in physician reimbursements. The proposed long-term solution announced last week builds on the SGR bill approved by the House Energy and Commerce Committee in July. House Energy and Commerce Committee leaders said they support the latest SGR framework from the Ways and Means Committee. The proposal differs from the E&C plan, but the lawmakers appear to be on the same page.