Report Details Administration’s Delays and Extensions of ACA Implementation

The Congressional Research Service (CRS) has issued a report summarizing significant actions the Obama Administration has taken to delay, extend, or otherwise modify implementation of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). Although not all-inclusive, the report lists decisions that have affected the ACA’s core insurance expansion provisions, highlighting the most controversial. Specifically, it mentions the delay of the employer mandate, the decision to allow the renewal of noncompliant insurance policies, and the implementation of special enrollment periods. The document provides background for each provision and a detailed history of administrative actions.

Employer Mandate Delay

The ACA requires employers with 50 or more employees to make a shared responsibility payment in the following two scenarios: (1) the employer does not offer coverage to at least 95 percent of full-time employees and dependents and at least one full-time employee receives a premium tax credit for an insurance policy purchased on a Health Insurance Exchange or (2) the employer offers coverage to 95 percent of full-time employees, but at least one full-time employee receives a premium tax credit for a policy purchased on an Exchange because the employer did not offer coverage to that employee, coverage was unaffordable, or coverage did not provide minimum value.

Although the provision became effective January 1, 2014, the IRS decided to delay enforcement of the requirement until 2015, along with a requirement that employers and insurers report certain information to the Internal Revenue Service (IRS). The agency then further delayed enforcement with respect to employers with 50 to 99 employees until 2016 and announced that employers of 100 or more workers would only be required to offer coverage to 70 percent of full-time employees in 2015 to avoid enforcement actions. The IRS explained that it could not enforce the requirements until a related requirement that employers report offered coverage had been implemented. It contended that the relief it offered is part of a practice of providing relief to taxpayers struggling to comply with a new law. Critics argue that it is an unconstitutional failure to enforce the law.

Renewal of Noncompliant Plans

When many insurers began to cancel individual and small business health plans that did not meet the ACA’s standards for health insurance coverage, CMS urged, but did not require, state regulators to allow insurers who issued or planned to issue policies in the individual and small group markets to renew the policies at any time through October 1, 2016. Critics argue that, in doing so, the Administration ignored ACA requirements that had become “politically inconvenient.” However, CMS is still considering an additional one-year extension of this policy. Consumers whose policies were cancelled are eligible for a hardship exemption where available options are unaffordable and may purchase a catastrophic plan to meet individual mandate requirements if available.

Open Enrollment

The CRS report also detailed a number of delays related to open enrollment. Individuals without employer-sponsored coverage have the option of enrolling in a qualified health plan (QHP) through a Health Insurance Exchange to avoid paying a tax for failure to carry insurance. Because consumers who enroll after the fifteenth day of a given month will not be covered by a policy until the first day of the second month following enrollment, those who enrolled after February 15, 2014 would not have been covered until April 1, 2014. They would thus have been uncovered for a full three month period and would have been required to pay a fine. However, CMS exempted individuals who enrolled after the February 15th from paying the penalty. It also issued guidance allowing state Exchanges to retroactively make advance payments of premium tax credits and apply cost-sharing reductions to individuals who were unable to enroll in a QHP on an Exchange because information technology issues prevented timely eligibility determinations.

In perhaps the most controversial of these open enrollment extensions, the Administration announced on March 26, 2014 that certain persons unable to enroll in a QHP by March 31, 2014 would be permitted to enroll in a special enrollment period. Qualifying circumstances included, but were not limited to, natural disasters, untimely transfers of data regarding applicants ineligible for Medicaid and CHIP from state agencies to Marketplaces, and technical problems with HealthCare.gov. In addition to the changes affecting open enrollment for 2014, CMS delayed the beginning of open enrollment for 2015 to November 14, 2014, extending the period to run through February 15, 2015.

The report described a number of other changes in detail, including those affecting Small Business Health Option Program (SHOP) Exchanges, annual limits on cost-sharing and deductibles, and basic health plan (BHP) options.

Sebelius Resigns as HHS Secretary, Obama Nominates OMB Director

President Barack Obama announced the resignation of HHS Secretary Kathleen Sebelius in a press conference on April 11, 2014, ending her nearly two-term tenure with the Obama administration. President Obama then nominated Sylvia Mathews Burwell, the Director of the Office of Management and Budget (OMB) as her replacement. Sebelius’ resignation comes one day after it was reported that the Health Insurance Exchanges under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) had garnered more than 7.5 million signups, exceeding HHS’s original goals. The HHS Secretary oversees the 11 operating divisions and eight agencies in the U.S. Public Health Services and three human service agencies.

President Gives Thanks

According to Obama, Sebelius told him in early March that she planned to step down from her post following the March 31, 2014 end of what she predicted to be a successful open enrollment period. After “five years of extraordinary service” and 7.5 million new insured Americans, Obama said Sebelius had “earned that right.” Sebelius, Obama said, would “go down in history” for serving as the Secretary of HHS when it was “finally declared that quality, affordable health care is not a privilege but a right for every single citizen of the United States of America.” In her tenure, Sebelius led achievements—“often without fanfare, often without acknowledgement”—that Obama said were critical to the health of Americans.

Critical Responses to Website Failures

Despite the recent good news, the rocky start of HealthCare.gov—as well as the resulting backlash from those across the aisle, who called for the Secretary’s resignation—tainted the reputation of Sebelius and of the Obama administration as a whole. The initial failure of the website spurred mockery from Saturday Night Live and headlines like The Daily Beast’s Kathleen Sebelius’s Daily Show Disaster. In her Daily Show interview, host Jon Stewart challenged Sebelius, saying, “I’m going to try and download every movie ever made, and you’re going to try and sign up for Obamacare—and we’ll see which happens first.”

Flaws in Management

In October 2013, Sebelius, the former governor of Kansas and former insurance commissioner to the state, told the House Energy and Commerce Committee that she was responsible for the “debacle” of the flawed roll-out of the federal health insurance website. She also told the Committee that the two weeks allotted for end-to-end testing of the website was inadequate for the task, but that none of the contractors hired by the government to create the website suggested delaying the launch past October 1. Health Law Daily reported on the Committee meeting in Sebelius accepts responsibility, rejects suggestion to extend enrollment period, October 30, 2013.

Health Reform WK-EDGE reported that, in December 2013, Sebelius wrote on her blog, “The launch of HealthCare.gov was flawed and simply unacceptable.” She announced that she would be undertaking “a series of initial steps in the process of better understanding the structural and managerial policies that led to the flawed launch of HealthCare.gov.” These steps would focus on the government’s work with contractors in building the website, which according to Sebelius was critical in that “CMS alone spent $5.3 billion in 2013 on contracting engagements.” Sebelius wrote, “We must take steps to ensure that our contractors are well managed, and that they fulfill their commitments and provide good services and products for our tax dollars.”

Sylvia Mathews Burwell

Obama nominated Sylvia Mathews Burwell as Sebelius’ replacement, saying, “I could choose no manager as experienced, as competent as my current Director of the Office of Management and Budget.” Obama stated of Sebelius, “I will miss her advice. I will miss her friendship. I will miss her wit.” However, he said, Burwell “holds the same traits in abundance.”

According to her White House biography, Burwell has served as the President of the Walmart Foundation and as the President of the Global Development Program at the Bill & Melinda Gates Foundation, for which she also served as the Chief Operating Officer. During the Clinton Administration, she held the positions of Deputy Director of the OMB, Deputy Chief of Staff to the President, Chief of Staff of the Secretary of the Treasury, and Staff Director of the National Economic Council.

At the press conference, Sebelius welcomed Burwell as her replacement, expressing the strong beliefs of HHS in its “important mission” and referencing a quote that is engraved in the walls of the Hubert H. Humphrey Building, which will soon house Burwell’s office: “It was once said that the moral test of government is how that government treats those who are in the dawn of life, the children; those who are in the twilight of life, the elderly; and those who are in the shadows of life, the sick, the needy, and the handicapped.”

Burwell’s Senate Confirmation

Before Burwell officially takes over the position of HHS Secretary, she must be confirmed by the Senate. Under Article II, Section 2 of the U.S. Constitution, the president shall appoint officers of the United States “by and with the Advice and Consent of the Senate.” When a nomination is made, the question before the Senate is “Will the Senate advise and consent to this nomination?” According to a report by the Congressional Research Service (CRS), “Only a majority of Senators present and voting, a quorum being present, is required to approve a nomination.”

Tens of thousands of nominations are made during each Congress, so the Senate is not able to consider all of them in detail. “A regularized process facilitates quick action on thousands of government positions,” according to the CRS. Hundreds of nominations may be approved en bloc by the Senate at one time. However, the confirmation process also allows for the Senate to closely scrutinize candidates when necessary, especially nominees for high-level positions such as Supreme Court appointees. According to the CRS, “Among the executive branch positions, nominees for policymaking positions are more likely to be examined closely, and are slightly less likely to be confirmed, than nominees for non-policy positions.”

At the press conference, Obama stated he did not think Burwell’s confirmation would be a problem, as she was confirmed unanimously one year ago for her post as the director of the OMB.

Vermont’s Single Payer System Slow Down

On May 28, 2011, Gov. Peter Shumlin signed Act 48 into law, which calls for a three-stage implementation of a publicly-financed universal health care system by 2017. The goal of Act 48 is an eventual state-funded and operated single-payer system. It’s three years later, however, and what momentum the Act had is starting to slow down, especially as the Governor is expected to release the finance plan for the project.

Single Payer System Design.

Vermont’s move to a single payer system was designed to meet the federal requirements the Patient Protection and Affordable Care Act (P.L. 111-148) (ACA). In doing so, it may take advantage of federal monies targeted for Vermont’s Health Insurance Exchange and to petition for federal waivers that would streamline Vermont’s reform. The system should extend coverage to each of Vermont’s 620,000 residents while containing soaring health care costs.

Vermont’s plan establishes a state Health Insurance Exchange, as mandated by new federal health care laws, that will offer coverage from private insurers, state-sponsored and multi-state plans. It also will include tax credits to make premiums affordable for uninsured Vermonters. The exchange will be managed by a five-member board which sets reimbursement rates for health care providers and streamlines administration into a single, unified system. On the Exchange, Vermont residents and small employers will be able to compare rates from a variety of plans and enroll in the plan of their choice. Among the criteria are adoption of a financing plan by 2014; ensuring the new system costs less than the current fee-for-service one; and obtaining federal permission via a waiver to allow Vermont to proceed with the single-payer option, in around 2017.

Benefits.

There are many benefits to a single payer system. When the government owns and operates one health insurance plan for all residents, it sets a single price for each medical procedure. These prices tend to be lower because the government is negotiating one rate for all citizens. Administrative costs are also lower because there is no insurance company. Physicians send their bill to the federal government.

Problems.

Of course, it’s not quite that easy – single payer system also has several problems. First, the government is the one to make difficult decisions about what benefits will and will not be covered. It could theoretically be up to the government to determine whether or not a patient will receive things like prescription drugs or dentist visits. Some single payer systems are associated with longer wait times for medical care, however a recent study by the Commonwealth Fund found that while some single payer systems have longer wait times, others see patients quicker than here in the United States.

Pause in the Process.

Under Act 48, Governor Shumlin was required last year to outline some financing options for lawmakers to consider but that has yet to be done.  The legislation required that the state provide an outline on how it plans to raise the estimated $1.7 billion to $2.2 billion to finance the future single payer system. At the beginning of the current legislative session, the governor said a menu of financing options would be released in April for legislators to discuss. Now, Governor Shumlin says he will wait until 2015 for the release. Despite the delay in developing the financing plan for the state’s single payer system, Shumlin said in a recent interview that he still thinks there’s enough time to meet his target date of 2017 for Vermont to become the first state in the country to implement a single payer health care system.

“I believe that we will collectively come to the same conclusion, that moving to a system where you spend less money for better quality and better outcomes,” said Shumlin. “Combined with a payment system where we all, based on our ability to pay, (will) lead to prosperity and an affordable quality health care system for all.”

He offered a slightly different reason for the stall in another interview last February, when he said the decision to delay unveiling the finance options was made over the past several weeks. “We have a very good business advisory group … that’s helping us to put together a package that will work for Vermonters as well as for businesses,” he said. “As we’ve gotten into the weeds of the various details that need to be ready to lay out a menu of options, there’s pretty broad agreement that we’re just not there yet.” Either way, it’s clear Vermont needs more time.

Fresh Faces to Figure Things Out.

Governor Shumlin has made some new hires to help him with figuring out details for the Exchange. Agency of Commerce and Community Development (ACCD) Secretary Lawrence Miller will become Senior Advisor to the Governor and Chief of Health Care Reform, where he will be tasked with overseeing the state’s health care reform efforts and transition to Green Mountain Care. He will report directly to the governor. Patricia Moulton will replace Vermont Administration Secretary Lawrence Miller when he moves up to advise the Governor.

In a recent interview, Miller commented, ““We know that concern about health benefits holds people back from striking out on their own and starting new businesses, and it keeps people locked in jobs for the wrong reasons…Health insurance is also a huge cost factor for all enterprises, including our schools.  We obviously have to do something different. I am encouraged that Vermont’s efforts at cost containment are beginning to bear fruit, and I am ready to help move us forward.”

Global Budget Payment.

Recent reports indicate that at least one hospital in the state will begin testing a “global budget payment” system. Global budgets are set payments determined by state regulators to care for the population a hospital serves, as opposed to the hospital billing for each individual service it provides. With this program, if the hospital exceeds its budget it loses money. The budget is based on the hospital’s historic revenue with adjustments for inflation and changes within the population it serves.

For more information on health reform in Vermont, please see Michelle Oxman’s post, “Highlight on Vermont: Implementing the ACA on the Road to a Single Payer System,” from February, 2014. She reviews the struggles Vermont is having with its Health Insurance Exchange and the state’s struggle to provide coverage for its uninsured population, which is the highest in the country.

Official Testifies About HRSA’s Health Workforce Investments, Goals, Successes

On April 9, 2014, Rebecca Spitzgo, Associate Administrator of the Bureau of Health Professions in the Health Resources and Services Administration (HRSA), testified before a Senate Subcommittee on Primary Health and Aging regarding the nation’s primary care workforce needs and HRSA’s activities and in this area. In light of recent investments from the American Reinvestment Recovery Act of 2009 (ARRA) (P.L. 111-5) and the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), Spitzgo’s testimony focused on: (1) recent investments to strengthen the primary care workforce; (2) new efforts to build a primary care workforce; (3) diversity programs; and (4) training for comprehensive primary care.

HRSA’s Mission and Focus

An agency of HHS, HRSA is the primary federal agency for improving access to health care services for people who are uninsured, isolated or medically vulnerable. HRSA was created in 1982, when the Health Resources Administration and the Health Services Administration were merged. Its stated mission is to improve health and achieve health equity through access to quality services, a skilled health workforce, and innovative programs. In its efforts to strengthen the health care workforce, HRSA’s workforce programs emphasize the training of the next generation of primary care providers, strengthening up the primary care training and development infrastructure, providing incentives for students to choose primary care and to practice where the Nation needs them most, and repaying loans for primary care providers willing to work in some of the Nation’s most underserved areas.

Recent Investments to Strengthen the Primary Care Workforce

In her testimony, Spitzgo stated that, to date, ACA and ARRA investments have resulted in:

  • the training of an additional 1,700 primary care providers, including physicians, advanced practice nurses, and physician assistants, as well as 200 behavioral health providers;
  • the doubling of the numbers of clinicians in the National Health Service Corps (NHSC) from 3,600 in 2008 to nearly 8,900 in 2013; and
  • nearly 1,600 advanced practice nurses in the NHSC and nearly 2,600 nurses in the NURSE Corps working in high need communities.

Spitzgo also noted that the ACA provides $230 million over five years to fund the Teaching Health Center Graduate Medical Education (GME) program, which has expanded residency training for primary care residents and dentists in community-based ambulatory patient care settings, including HRSA-funded health centers. According to Spitzgo, this program supported more than 300 primary care resident full-time equivalents (FTEs) in 21 states in academic year 2013-2014, and is expected to support nearly 600 FTEs in academic year 2014-2015.

New Efforts to Build a Primary Care Workforce

Spitzgo testified as to the several new programs and initiatives to build a better primary care workforce contained in the President’s FY 2015 Budget, including:

  • A workforce initiative to support the training of 13,000 new physicians by 2024 and grow NHSC clinicians from 8,900 in 2013 to 15,000 in by FY 2015.
  • A new residency program, the Targeted Support for GME program, will build on the Teaching Health Center GME program, focusing on residency training in ambulatory, preventive care delivered in team-based settings. This new program includes a $100 million set aside for children’s hospitals in FYs 2015-2016, to be distributed via formula that will continue to support the same types of disciplines currently funded through the Children’s Hospitals GME Payment program.
  • Continued support of the NHSC.
  • A new $10 million Clinical Training in Interprofessional Practice program, which will support community-based clinical training in interprofessional, team-based care setting.
  • $4 million for the Rural Physician Training Grant program to provide support for medical schools to recruit and train students interested in rural practice.

Diversity Programs

In her testimony, Spitzgo stressed HRSA’s success in facilitating a diverse healthcare workforce. She offered the following statistics:

  • Underrepresented minorities and individuals from disadvantaged backgrounds accounted for approximately 45 percent of those who completed HRSA’s health professions training and education programs during 2012-2013.
  • More than half of the nearly 1,100 NHSC scholars and residents in the pipeline are minorities.
  • In FY 2013, African American physicians represented 17.8 percent of the Corps physicians, which exceeds their 6.3 percent representation within the national physician workforce.
  • In FY 2013, Hispanic physicians represented 15.7 percent of the Corps physicians, exceeding their 5.5 percent representation in the national physician workforce.

Training for Comprehensive Primary Care

Spitzgo’s testimony focused on HRSA investments to support the behavioral health disciplines and the integration of oral health into primary care. With regard to behavioral health, she noted that:

  • NHSC providers (including health service psychologists, licensed clinical social workers, licensed professional counselors, marriage and family therapists, and psychiatric nurse specialists) have increased from 700 in 2008 to 2,440 in 2013.
  • If they count psychiatrists, psychiatric physician assistants, and psychiatric nurse practitioners, more than 2,800 out of nearly 8,900 clinicians in NHSC (as of September 30, 2013) provide behavioral health services.
  • A partnership between HRSA and the Substance Abuse and Mental Health Services Administration (SAMHSA) will train and provide placement assistance for approximately 1,800 additional behavioral health professionals and 1,700 behavioral health paraprofessionals.

Spitzgo further testified that HRSA funds several programs that support training and education necessary to improve the integration of dental care into primary care. Sptizgo also noted that approximately 75 percent of the more than 1,300 dentists and dental hygienists in NHSC work at health centers or health center look-alikes.