CMS Clarifies Health Insurance Exchange Enrollment Deadline

On October 28, 2013, the Centers for Medicare & Medicaid Services (CMS) released guidance clarifying that individuals have until March 31, 2014 to enroll in the health insurance exchanges.  (More information on the health insurance exchanges is available here.)  

What’s the issue? 

The Administration has previously announced the open enrollment period for the new health insurance exchanges would run from October 1, 2013 through Mach 31, 2014.

The Affordable Care Act (ACA) also imposes an individual mandate requirement, which provides that beginning January 1, 2014, individuals must have health insurance coverage or face a penalty.  This penalty is assessed on the individual’s federal income tax return for the following year.  (More information on this requirement is available here.)  In establishing the individual mandate requirement, the Internal Revenue Service (IRS) determined the penalty would not apply to individuals who have a gap in health insurance coverage for less than three months.

So, what’s the problem?

The problem comes from fact that there is a lag between when an individual signs up for health insurance coverage and when the coverage begins.  Under the rules, if an individual selects a plan and pays his/her premiums between the 1st and the 15th of a given month, his/her coverage begins on the first day of the following month.  However, if the individual selects a plan between the 16th and the end of a given month, his/her coverage will not begin until the first day of the second following month.  Below are some examples to illustrate the issue.

Example 1:

Betty does not have any health insurance coverage and decides to sign up for coverage in the health insurance exchange operating in her state.  She signs up for health coverage and pays her premiums on February 10, 2014.  Her health insurance coverage will begin on March 1, 2014.

Because she experienced a gap in coverage of less than three months, she will not be assessed an individual mandate penalty.

Example 2:

Bobby does not have any health insurance coverage and decides to sign up for coverage in the health insurance exchange operating in his state.  He waits until March 20, 2014 (still within the open enrollment period) to sign up for coverage and pay his premiums.  His coverage will begin on May 1, 2014 (the second following month).

However, because he experienced a gap in health insurance coverage of more than three months, prior to the CMS guidance, he would be assessed an individual mandate penalty.

What does the CMS guidance do?

The CMS guidance clarifies that an individual mandate penalty would not be assessed against anyone who signs up for coverage and pays his/her premiums before the end of the open enrollment period.  So, Bobby in Example 2 would not be assessed an individual mandate penalty even though he was without health insurance coverage for more than three months.

CMS will be issuing additional guidance next year to provide additional information to people as they prepare and file their 2014 federal income tax return (which is due to the Internal Revenue Service (IRS) by April 15, 2015).

Medicare Open Enrollment Starts Today

There has been much focus recently on open enrollment for the health insurance exchanges. In addition to the exchange open enrollment period, today, October 15, 2013, marks the beginning of Medicare’s annual enrollment period, which lasts until December 7, 2013.  Approximately 49 million Americans are enrolled in Medicare.

What does the enrollment period mean for Medicare beneficiaries?

Each year during Medicare’s annual enrollment period, current Medicare beneficiaries are allowed to make changes to their Medicare plan choices.  Beneficiaries who are enrolled in a Medicare prescription drug plan (otherwise known as Medicare Part D) can review their plan choices and determine whether they want to stick with their current plan, or switch to a new plan.  Beneficiaries who are enrolled in a Medicare Advantage plan (an MA plan, or Medicare Part C) can review their plan choices and decide if they want to keep their current plan or switch to a new plan.

What happens if a beneficiary does nothing during the annual enrollment period?

If a beneficiary is satisfied with his/her current Medicare coverage, he/she does not need to do anything.  So, if you are happy with your current Part D plan and want to keep the same plan next year, you do not need to do anything during the annual enrollment period.  Plan premiums may change; beneficiaries should have been notified by their current plans of any changes for next year.

If a beneficiary has Medicare, should they enroll in plans in the health insurance exchanges?

No.  If you have Medicare you are considered covered and do not need to obtain health insurance coverage through the exchanges.  For more information visit http://marketplace.cms.gov/getofficialresources/publications-and-articles/medicare-and-the-health-insurance-marketplace.pdf.

For more information on Medicare coverage options, please visit www.medicare.gov or call 1-800-MEDICARE.

October 1st – Huge Day for Healthcare

The first day of the federal government shutdown occurred on October 1, 2013, the same day as the start of the open enrollment period for the health insurance exchanges.  This blog post focuses on some of the top issues impacting health care policy on this date.

HHS Operating Status

Like most other federal agencies, the Department of Health and Human Services (HHS) has implemented a contingency plan, which calls for 52% of HHS employees to be placed on furlough.

Medicare Reimbursement

Despite the government shutdown, most Medicare fee-for-service reimbursement will continue as scheduled.

On October 1, 2013, the Medicare Administrative Contractors (MACs) indicated they would “continue to perform all functions related to Medicare fee-for-service claims processing and payment.”  However, according to the HHS contingency plan, health care fraud and abuse efforts will cease during the government shutdown.  In addition, CMS will be curtailing the number of recertification and initial surveys for Medicare and Medicaid providers.

ACA Implementation

Despite the HHS furlough, October 1st marked the first day of open enrollment for the health insurance exchanges.  Initially individuals were reporting that many of the individual state-based health insurance exchange sites were not working properly and the healthcare.gov website and toll-free number were experiencing problems or longer than average wait times.  However, as of yesterday afternoon, HHS informed reporters that more than 2.8 million individuals had visited the healthcare.gov website since it launched earlier that morning, the call centers received more than 81,000 calls, and there were more than 61,000 live chat requests.  HHS did not announce how many individuals had successfully enrolled in a health insurance plan offered through the exchange on this first day.

Medicare and Medicaid Provider Policies

In addition to the establishment of the new health insurance exchanges, the ACA also mandated certain Medicare and Medicaid cuts to begin on October 1, 2013, including:

  • Medicare readmissions reductions:  Under the Hospital Readmissions Reduction Program (HARP) hospitals are assessed a penalty for patients with certain conditions who return to the hospital within 30 days of discharge.  When the program began on October 1, 2012, hospitals were assessed a maximum penalty of one percent of total revenue.  As of October 1, 2013, the penalty increases to two percent of total revenue.  CMS data suggests that more than 2,200 hospitals will have their Medicare payments reduced under this program.  (More information on the program is available here.)
  • Medicaid Disproportionate Share Hospital (DSH) payments:  The Medicaid program provides additional payments—DSH payments—to hospitals that see a higher than average share of low-income beneficiaries.  The ACA reduced the overall level of Medicaid DSH payments beginning October 1, 2013 when cumulatively states will receive a $500 million cut in DSH payments.

Medicaid Expansion

Under the ACA, states who choose to do so may expand their Medicaid programs to cover uninsured individuals up to 133 percent of the federal poverty level (2013 federal poverty level figures are available here).  More than half the states have chosen to expand their Medicaid programs, as seen in this map.  Expanded Medicaid coverage begins in most states on January 1, 2014.

Federal Government Shutdown

For the first time in 17 years, the federal government has officially shutdown.  Late last night, the Administration released a memo to all federal agencies advising them to execute their contingency plans (an agency-by-agency list is available here).

Yesterday the Senate passed a bill that would fund the government through November 15, 2013, but would make no changes to the Affordable Care Act (ACA).  (More information on the Senate vote is available here.)  Last night, by a vote of 228-201, the House passed legislation that would keep the government open through December 15, 2013, but would delay the ACA’s individual mandate requirement and would eliminate health insurance subsidies for Members of Congress, Congressional staff, the President, the Vice President, and political appointees.  By a vote of 54-46 the Senate voted to table, or kill, the legislation.

Following the latest Senate action, the House voted to formally request a conference committee with the Senate.  (Conference committees are joint House-Senate committees that are created to resolve disagreements between the House and Senate versions of a given bill.)  House Speaker Boehner (R-OH) appointed the following members to the conference committee:  House Majority Leader Cantor (R-VA-7), Ways and Means Chairman Camp (R-MI-4), House Budget Committee Chairman Ryan (R-WI-1), House Appropriations Chairman Rogers (R-KY-5), Representative Frelinghuysen (R-NJ-11), Representative Crenshaw (R-FL-4), Representative Carter (R-TX-31), and Representative Graves (R-GA-14).  House Democrats have not appointed conferees.  The Senate voted to table the request for conferees.

While the House and Senate cannot seem to agree on terms to fund the entire government, both chambers have passed H.R. 3210, legislation that would provide payment through the government shutdown for members of the Armed Forces (including reserve personnel) and civilian Department of Defense (DoD) employees and contractors whom the DoD Secretary determines are providing support to members of the Armed Forces.  The legislation passed the House by a unanimous vote, the Senate passed the bill by a voice vote, and was signed into law by President Obama last night.

At this point, both the House and the Senate appear at a stalemate.  Until Members of Congress can reach some agreement, the government shutdown will remain in place.  We will continue to update this blog as events unfold.

Federal Shutdown Likely

On Friday, September 27, 2013, the Senate passed a short-term continuing resolution (CR) that would keep the government operating through November 15, 2013.  (More information on the Senate vote is available here). Late Saturday night (September 28th), the House passed legislation that would fund the federal government through December 15, 2013, delay implementation of the Affordable Care Act (ACA) for one year, and also repeal the 2.3 percent tax on medical devices.

Today, Monday, September 30, 2013, by a vote of 54-46, the Senate passed a bill that would fund the federal government through November 15th.  The Senate did not adopt provisions in the House-passed bill that would delay implementation of the ACA and repeal the device tax.

With only hours to go before the end of the 2013 fiscal year, a federal government shutdown is all but certain.  The Administration has published a list of each agency’s contingency plans in the event of a government shutdown.

We will continue to update this blog as events unfold.

Senate Passes CR

Today, by a vote of 54 to 44 the Senate passed a short-term continuing resolution (CR) which would keep the government running through November 15, 2013.  Unless some version of a CR is enacted by midnight on Monday, September 30, 2013, the government faces a shutdown.

Last week the U.S. House of Representatives passed a bill that would keep the government funded through December 15, 2013, but also called for the defunding of the Affordable Care Act (ACA).  Earlier this month, the Obama Administration released a Statement of Administrative Policy (SAP) indicating the President would veto the House-passed bill.

Now that the Senate has passed its CR, the House will have to decide whether to accept the Senate measure or attempt to pass a different bill.  If the House agrees to the Senate-passed measure, the bill will then go to the President for his signature and a government shutdown will be avoided.  If the House does not accept the Senate-passed bill and decides to make changes, the Senate will have to vote on the revised measure and due to various procedural procedures in the Senate, a government shutdown becomes more likely.

Countdown to Shutdown – The Basics

Unless Congress and the Administration can reach a deal by October 1, 2013, the federal government will technically “shutdown”.  This post describes some basic information on a possible shutdown.  More information will be provided as events unfold.

How can a government shutdown?

The U.S. government operates on a fiscal year (FY) basis that runs from October 1st through September 30th each year.  Each year, Congress funds the operation of federal agencies through the annual appropriations process.  In recent years, Congress has appropriated money through a series of stop-gap measures known as continuing resolutions (CRs).  The latest stop-gap measure is slated to expire at the end of the current fiscal year (FY 2013) – September 30, 2013.

Does a government shutdown mean the entire government will cease operations?

No.  Despite a shutdown, the government will continue to operate some services.  While the Antideficiency Act prohibits agencies from spending money that exceeds their appropriations, there are some exceptions to this requirement.  According to the Office of Management and Budget (OMB), certain services are deemed “essential” – services pertaining to national security and/or the protection of life and property and services required to make benefit payments for entitlement programs – and thus must continue to operate notwithstanding a shutdown.

Last week, OMB sent a memo to all executive agencies directing them to start planning in case Congress and the Administration are unable to come to an agreement and enact further appropriations.

Has the federal government previously shutdown?

Yes.  Most recently the federal government underwent two shutdowns – one for five days and the other for 21 days – when then-President Clinton and the Republican-controlled Congress differed over spending issues.

Do federal workers get paid when the government shuts down?

Not necessarily.  Even if a federal worker is deemed “essential” and thus must report for duty, this does not mean s/he will be paid for that work.  In the past, federal workers – whether essential or non-essential – have received their salaries retroactively when Congress and the Administration signs a new appropriations bill or CR.

More information on furloughs is available at the Office of Personnel Management (OPM) site.

CBO Scores SGR Bill

Today the Congressional Budget Office (CBO) released a report estimating that it would cost $175 billion over ten years to enact the Energy and Commerce Committee’s proposal to repeal and replace the sustainable growth rate (SGR).  A copy of the CBO report is available here.  Background information on the SGR is available here.

On Wednesday, July 31st, the Energy and Commerce Committee unanimously passed H.R. 2810, a legislative proposal to repeal the SGR formula and impose a new mechanism by which Medicare would reimburse physicians and other health care professionals.  (More information on the Energy and Commerce Committee proposal is available here.)  H.R. 2810 did not include any offsets.  The House Ways and Means Committee, which also has jurisdiction over the issue, and the Senate Finance Committee are in the process of developing their own legislative proposals to address this issue.

MedPAC 101

As the Medicare Payment Advisory Commission (MedPAC) is meeting today (Thursday, September 12th) and tomorrow (Friday, September 13th), Capitol Health Record has prepared the following primer. Information on MedPAC’s public meeting this week is available here.

As part of the Balanced Budget Act of 1997, Congress established an independent 17-member Commission tasked with recommending to Congress changes in Medicare policies.  MedPAC is charged with determining Medicare’s payment adequacy for physicians, hospitals, and other providers as well as determining whether Medicare beneficiaries have adequate access to Medicare services.

Does MedPAC have the force of law?  MedPAC’s recommendations are not law.  Congress must adopt MedPAC’s recommendations in order for them to be fully implemented.  However, MedPAC’s recommendations are often influential among policymakers as they develop new legislative proposals.

How does one become a MedPAC Commissioner?  The Government Accountability Office (GAO) annually publishes a notice inviting individuals to become a MedPAC Commissioner.  GAO’s announcement is generally published in January and nominations are generally due in mid-March of each year.  New Commissioners are generally announced in late May or early June each year.

Where can I find more information about MedPAC’s recommendations?  Each year MedPAC publishes at least two reports.  MedPAC’s March report contains recommendations on payment changes on a range of issues.  In June MedPAC publishes a report providing analysis on other policy issues and additional information on other recommendations.  (More information on MedPAC’s March 2013 report is available here and information on its June 2013 report is available here.)  In addition, MedPAC generally submits comments on the Centers for Medicare & Medicaid Services’ (CMS’) proposed rules implementing Medicare payment policies.  All of MedPAC’s reports and comment letters are available on its website (www.medpac.gov).

Does MedPAC provide recommendations on all health care issues?  No.  MedPAC is limited to providing recommendations regarding the Medicare program.  MedPAC can, and does, make recommendations to address issues arising with so-called “dual eligibles” (e.g., individuals who are eligible for both the Medicare and Medicaid programs).  However, MedPAC generally does not provide recommendations solely related to other payers or services (like the Medicaid program or employer-sponsored health care).

How does MedPAC differ from the Independent Payment Advisory Board (IPAB)?  MedPAC makes recommendations to improve the Medicare program.  IPAB, if convened, would be limited to making recommendations to limit the per capita rate of growth in Medicare spending.  In other words, MedPAC can make recommendations to add policies and services to Medicare (regardless of whether these new policies result in additional federal spending).  IPAB can only make recommendations to cut Medicare spending.

Dewonkify – Health Insurance Exchanges

The Word:  Health Insurance Exchanges

Definition:  Health insurance exchanges (often referred to as “exchanges”) will be marketplaces where individuals and employers can purchase comprehensive health insurance.  Health insurance exchanges will be available in every state beginning January 1, 2014.

Used in a sentence:  “Aetna cut its rates by 5 percent for its small group plans on the D.C. exchange, the D.C. Health Benefit Exchange Authority said on Tuesday.” – Politico Pulse, Jason Millman, July 3, 2013.

Background:  The Affordable Care Act (ACA) created new health insurance exchanges.  Each state must decide whether to operate their own state-based exchange (where the state maintains control over the entire exchange), a federal-state partnership exchange (where the state and federal government work together to operate the exchange), or a federal exchange (where the state relies almost entirely on the federal government to operate the exchange).  Approximately one half of states have decided to operate their own state-based health insurance exchanges.  Here is a list of states and the status of state health insurance exchanges.  Individuals with limited incomes can apply for tax credits to help offset the costs of their premiums and/or cost-sharing requirements.

Health insurance plans that are operating in the health insurance exchanges must cover items and services with at least the following ten essential health benefit categories: prescription drug coverage , preventive care, emergency services and hospitalizations, maternity and newborn care, mental health and substance abuse services, ambulatory patient services, rehabilitation and habilitation services, laboratory services, preventive and wellness services and chronic disease management, and pediatric services (dental and vision).