As some of you may know, I work at a research institute attached to an HMO in Seattle called Group Health Cooperative. I received this succinct and unbiased internal communication from our operational leadership this morning about what is going on regarding the budget and the Affordable Care Act (Obamacare). For those of you not in health care, I think you will find it informative. /////////////////////////////////////////////////////////////////////////////////////////////////// October 1, 2013 Federal Public Policy Update By Amber Bronnum and Megan Howell Since the Affordable Care Act (ACA) was enacted in 2010, many efforts have been made to eliminate some components, make changes to reduce its impact, or even repeal it entirely. Popular media has given a lot of attention to these efforts, with the resulting coverage ranging from spot-on accurate to wildly politicized and exaggerated. This coverage has intensified as open enrollment approaches on Oct. 1. In the backdrop: broad economic discussions on topics including the debt ceiling, sequestration, and a possible government shutdown. Some of these broad economic discussions, such as the debt ceiling and sequestration (see more below) have the potential to impact implementation of the ACA. What is true and what has been exaggerated? How does the federal landscape influence the viability of Washington State’s online exchange marketplace? Below are some informed speculations, gathered from currently available data, followed by some answers to common questions. Keep in mind, actions by Congress can change on an hourly basis. Stop-gap funding to avoid government shutdown Deadline: Sept. 30, 2013 Congressional leaders on both sides of the aisle have urged their colleagues to avoid a government shutdown by approving a short-term extension of funding, also known as a Continuing Resolution (CR). These efforts were complicated by demands from some conservatives to defund health care reform. As it currently sits, the House is expecting to pass a CR that delays the individual mandate a year, which is a non-starter for the Senate. A solution does not appear to be in the near future, or at least until all leaders, including House, Senate, and the President, have a productive conversation. Bottom line: A government shutdown will not stop implementation of the ACA since the it relies mostly on mandatory spending—the funds are required by law to be present in the annual federal budget (as opposed to discretionary funds). To prepare for a possible shutdown, the Department of Health and Human Services (HHS) issued a contingency plan last Friday evening. The document stated that federal government processes in relation to enrollment for Medicaid expansion and the Exchange will not be impacted. Additionally, Group Health should only see minimal, if any, impact to our Medicare Advantage business. Please note that if the government shutdown continues for more than a week, HHS may reassess and communicate further impacts. If this should happen, Public Policy and Government Relations will continue to relay information as it is made available. The Debt Ceiling Deadline: Mid-October, 2013 As if government shutdown wasn’t enough, in August 2013, the Treasury Secretary advised Congress that by mid-October it must increase the nation’s borrowing authority or risk defaulting on its debt. Bottom line: Congress will likely find a way to raise the debt limit through a short-term extension rather than risk the significant economic consequences of a default. House Republicans will demand fiscal or regulatory reforms in exchange for a debt limit increase, essentially using the debt ceiling as a bargaining tool. Specific to the ACA, some conservatives are expected to attempt to chip away at components of the ACA in exchange for agreeing to a short-term debt extension. Sequestration & Fiscal Year 2014 (FY14) Appropriations Timeline: October 2013 – January 2014 Sequestration, automatic and across-the-board budget cuts, is the aftermath of the Budget Control Act of 2011. House Speaker John Boehner recently stated that sequestration will remain in effect until the President proposes a replacement budget package. Sequestration will continue with a second round of cuts this January unless Congress passes legislation to replace it with a more thoughtful set of budget cuts (potentially including a revenue component). Bottom line: By the end of 2013, Congress will need to agree on a final fiscal year 2014 (FY14) federal appropriations package, either through a series of funding bills or through another CR. This deadline provides Congress and the Administration another opportunity to replace sequestration, but top White House aides are divided, resulting in uncertainty as to how sequestration and FY14 appropriations will play out. Additionally, if sequestration stands in 2014, premium tax credits and cost sharing subsidies through the exchange are vulnerable to reductions. Despite uncertainty, Washington’s exchange is stable The ACA not will be repealed nor defunded in its entirety, since much of the law includes mandatory and direct spending not subject to annual appropriations. In short, the money is already, or soon will be in the bank, earmarked from specific funding sources. Washington State has already received funding to establish and run Washington Healthplanfinder--the name of our online exchange marketplace--and to conduct outreach to Washingtonians. Further, the State Legislature passed bills in 2012 and 2013 mandating funding for exchange operations for the future. Some things are less certain. While exchange funding is secure, the same is not true for other components of the ACA, because certain sections are vulnerable to reductions. Here are answers to a few of the common questions we’ve been hearing related to funding. 1.Are the premium tax credits through the ACA at risk of being reduced or eliminated? Yes, but this is unlikely in 2014. Some Congressional leaders are pushing for comprehensive tax reform that would take a “clean slate” approach. This risks the elimination or revision of all tax provisions, not just those affecting the ACA. The House Committee on Ways and Means is expected to produce tax reform legislation this fall, but it is unlikely to move through the House or Senate during the current, 2013, congressional session. Sequestration will continue to have a limited impact on the ACA’s tax credits. It did reduce the small business refundable tax credit this year, but the refundable health tax credit for eligible individuals was exempted. 2.Are the cost sharing subsidies through the ACA at risk of being reduced or eliminated? Yes. Individual cost-sharing subsidies, unlike premium tax credits, may be reduced by sequestration. However, the administration has yet to issue guidance in this area so it’s unclear what the real impact may be. 3.Is there a chance that Medicaid expansion federal dollars could be eliminated? Not likely in the near term. Medicaid spending is not subject to sequestration, and since expansion dollars were designated as mandatory by the ACA, it will be very difficult for Congress to take that money away via annual appropriations. 4.Do you all foresee any Medicare cuts in the near future? Sequestration limits Medicare cuts to 2% annually and limits such impact to providers. The ACA made significant cuts to the Medicare Advantage (MA) program and included a penalty, in the form of a tax, on seniors that choose a MA plan. Aside from the ACA implementation, further legislative cuts to MA are not expected at this time. Congress does want to repeal the Sustainable Growth Rate (SGR), however, and is looking at ways to reform the fee-for-service structure, including providing doctors with more reimbursement options. Legislation is expected this fall, when Congress must once again act to prevent scheduled cuts in Medicare payments to doctors. As always, please tell us what you think, and help us improve. If you have questions or suggestions, please contact Victoria Reed on behalf of the Group Health public policy team. Diana Birkett Rakow, Vice-President, Public Affairs Megan Howell, Director, Policy and Regulatory Affairs Madeline Otto, Director, Federal Government Relations Scott Plack, Director, State Government Relations Amber Bronnum, Public Policy Analyst Amy Gelnett, Public Policy Analyst Victoria Reed, Executive Assistant
Posted on: Tue, 01 Oct 2013 17:31:43 +0000
Trending Topics
Recently Viewed Topics
© 2015