Friday, July 25, 2014

That Was The Week That Was - Issue 20

A look back at the week's health policy news with a focus on ACA implementation


Another big court ruling this week, a look at MLR season, new IRS regs and more.  And if you make it all the way to the end (or just skip down) I'll make you cry, then I'll make you happy.

ACA: Halbig & Company (this is a lengthy review of the topic, for those experiencing Halbig overload feel free to skip down to the next section)
As you may have heard, on Tuesday two Courts issued conflicting rulings on cases related to subsidies available on the Federal Marketplace (remember, in the legislation the Marketplace is referred to as the Exchange) (Appeals Courts Split On Legality Of Subsidies For Affordable Care Act.)  The question before the two courts (and before two others) relates to one sentence in the law that describes the subsidies as being available “through an Exchange established by the State...”. 

The opponents of the ACA who brought these various cases argue that since it says "by the State" an Exchange established by the Federal Government cannot offer subsidies.  Here's a look at the history of the argument: Obamacare's Single Most Relentless Antagonist.  As the four cases (in four separate parts of the country) have worked their way through the Courts, Tuesday's DC Appellate ruling is the first to find in favor of the plaintiffs (the people opposed to the law and objecting to healthcare.gov offering subsidies). 

Here is a sample of local Maine coverage Two rulings split on legality of subsidies under Obamacare and Federal courts disagree over Obamacare, creating uncertainty about Mainers’ health insurance subsidies.  Note that I invoke the "Mitchell Rule" which states that if Mitchell is writing a blog he gets to include articles where he's quoted.

Here is a detailed view from Timothy Jost on the legal cases (caution, heavy reading alert): Implementing Health Reform: Appellate Decisions Split On Tax Credits In ACA Federal Exchange

If the DC Appellate decision had been the only court to decide this issue it would have put at risk the financial assistance available in the 36 states where the marketplaces are run by the federal government.   But No, the Halbig case isn't going to destroy Obamacare.  The key thing to remember is that nothing is happening to the subsidies - so take a deep breath and don't panic:

"In the meantime, to be clear, people getting premium tax credits should know that nothing has changed; tax credits remain available," said Emily Pierce, deputy director of the Justice Department's office of public affairs.

Memo to Democrats: This is what happens when you pass a law where you can’t fix simple drafting errors (Democrats still haven't learned Obamacare lesson).  One way to look at this is it's just another consequence of the way the bill was passed (with the House forced to pass the Senate's draft bill due to the death of Senator Kennedy).

Part of the legal question goes to the intent of the legislation - while we can't ask the Founding Fathers about intent when it comes to the Constitution, in this case (since it was written 4-5 years ago) we can ask.  So Here’s what Obamacare’s authors said they actually meant and Yes, Congress Wanted Obamacare Subsidies. It Just Did A Terrible Job Of Saying That.

So what happens next?  The Feds have already said that they will appeal the DC decision and request an "en banc" ruling of the entire Circuit Court.  What does that mean?  The DC Court is comprised of eleven judges but usually only three hear a case.  "En banc" means that all the Justices would decide the case instead.  The make-up of the DC Court leads observers to think they would find differently than the three judge panel and allow the subsidies on healthcare.gov (Harry Reid Might Have Saved Obamacare by Going Nuclear).  The timing for the entire court to hear the case is probably this Fall.  After that the situation becomes more murky since we don't know how the other three cases will move forward (appeals, no appeals) or what the timing would be. 

For the sake of argument, what if all four cases are resolved, would that be the end of it?  The answer is maybe or maybe not.  It is possible that the Supreme Court will ultimately decide the case:  While that's less likely if all of the various courts end up agreeing that subsidies can be offered by the Feds it is still possible (Fourth Circuit ruling doesn't increase odds of Supreme Court review). 

If the Supreme Court does take the case, that might not be until 2015 or even 2016.  And how would they decide?  In the aftermath of Hobby Lobby, I'm not making any predictions.  For those who are bolder, there is evidence that they could rule either way:  First, making it look like they would not allow subsidies: Did the Supreme Court already tip its hand on Obamacare subsidies?  and then making it look like they would allow them: What the D.C. Circuit Got Wrong About Obamacare.

Given the DC court's decision and the somewhat inflammatory coverage of this story, the most immediate impact of all of this will be added confusion and uncertainty during the next open-enrollment period (starting November 15); despite the fact that nothing has changed. 

For those wondering what if the worst case scenario comes to pass and the Supreme Court says that the Feds can't offer subsidies?  Even then there would be several ways forward (If Obamacare subsidies go, states may have workarounds):
  • At once the easiest and most difficult solution would be for Congress to amend the law by adding a few words to the sentence quoted above so that instead of saying "state" it said "state or Federal Government".  I'll leave it to your imagination to consider how likely that is.
  • States that are currently using healthcare.gov could enter into agreement to continue using but as platform for their own exchange.  This option would require each state to cooperate and take action - which as we learned with the Medicaid expansion situation may be problematic.
  • States could build their own marketplaces - but remember Federal funding to pay for that is not available after this Fall.               

Also worth noting is that without subsidies many more people would qualify for the financial hardship exemption from the mandate.

Still confused about the latest Obamacare lawsuits? Let Jon Stewart explain.

ACA: Additional Court Cases
It's now been over two years since the Supreme Court upheld the law - you would think that would have put an end to this nonsense, but no.  So here is a rundown of additional court developments this week.

A victory for reason over hyperbole as a Federal judge throws out Ron Johnson's Obamacare lawsuit .  This was the case against congressional staff using the DC small business marketplace (instead of the individual one).  This came about because a piece was added to the ACA saying that Congress had to use the marketplaces.  This was done in spite of the fact that no other employees of large employers would do so.  When the rules were written, in order to preserve the ability of the employer (the Feds) to contribute to their employees insurance it was decided they would use the small business marketplace instead of the individual one.  Opponents said this was an outrage, an example of special treatment for congressional staff.  And yes it was, if by special you mean being singled out to get worse treatment than they otherwise would have received. 

So a victory for rationality as the suit was thrown out by the judge.  For the legal details, we turn as usual to Timothy Jost:  Implementing Health Reform: Senator Rebuffed In Challenge To Congressional Participation In ACA Exchanges (sorry South Park fans, I'm not going to include a "Timmy" video every time I site Mr. Jost, it gets old).

On the Hobby Lobby front the administration announced they are working on new procedures so that the workers of objecting employers still get contraceptive coverage: In response to court ruling, administration works to ensure contraceptive coverage.  Also, a clarification on Fox news coverage (or should I say misrepresentation): Megyn Kelly Misrepresented My Article About Contraception - I'm an OB-GYN. She's Not.

And finally, coming in a strictly party line vote, House panel backs Obama lawsuit.  (You know, the one where the Republican's are upset because there was a delay in the employer requirements they didn't want to begin with.)

ACA: Polls/Opposition
Another day Another survey shows Obamacare driving down the uninsured rate.  More evidence, this time in a New England Journal of Medicine article: Health Reform and Changes in Health Insurance Coverage in 2014 (Primary Source).

And a Poll: Most say Obamacare working although to be fair, most means 53%.

ACA: Premiums/Costs
"Nearly 20 states have released preliminary information about premiums for insurance policies sold on their insurance exchanges, and the nightmare scenarios have not come to pass. In most of those states, the average increase across all exchange plans is in the single digits." Obamacare Premiums Aren't Living Up to Doomsayers’ Predictions

But remember, health premiums are a local - so while overall the news is positive, there are some outliers: Florida’s Biggest Health Insurer Signals Rate Hikes Ahead

ACA: Marketplaces
To all my friends who continue to help individuals get coverage, it will come as no surprise to hear that the Federal Health Exchange Stays Busy After Open Enrollment Ends.

But that's not to say that healthcare.gov and ACA implementation overall is working perfectly.  The GAO released preliminary information on their investigation of healthcare.gov and the results were not pretty: Federal undercover investigation signs up fake applicants for ACA coverage, subsidies.    However, the final word is not in: GAO: Too early to draw Obamacare fraud conclusions.  And lest we forget, as Rep. Joseph Crowley (D-N.Y.) put it:  “What is the ultimate prize for the criminal? Is it a free colonoscopy?”

Another sign of bumps in the road as the Washington Post looks t examples where Varying health premium subsidies worry consumers.

And looking forward, some thoughts on the difficulties inherent in the next open enrollment period: How Obamacare’s Progress Makes Expanding Coverage Harder.

ACA: Employers
The UC Berkley Labor Center created a great review of what employers need to know: AFFORDABLE CARE ACT: Summary of Provisions Affecting Employer-Sponsored Insurance.

And the IRS released the draft forms that employers will use to report on health insurance (IRS prepping for Obamacare employer mandate in 2015).  However the instructions that go along with the forms won't be released until next month - and since these are drafts they are subject to change (Draft Forms).

ACA: Other
It's MLR season - that means insurers who haven't met the MLR (medical loss ratio) requirements are sending out checks: U.S. health insurers to pay $330 million in premium rebates.  As part of this annual announcement, HHS projected the impact of the MLR rule in general: Consumers have saved a total of $9 billion on premiums (Primary Source).  But for some perspective note that Obamacare saved consumers $9 billion, but that's not as much as it sounds.  Once again invoking the "Mitchell Rule" (see above) here is local coverage: Rebates on insurance divvied out to 20,000 Mainers and Maine to receive $1.8M in health insurance rebates.  Here in Maine only Aetna did not meet the requirements of the rule and had to send out rebates - they operate only in the small and large group market so no individuals will be receiving checks (this despite an early and incorrect Press Herald headline).  While it's nice to talk about people getting money back, the ideal situation is all insurers are complying with the rule to begin with so no checks end up being mailed.

Consider this next item a warning.  Business Groups, Consumer Advocates Draw Lines In The Sand About Essential Benefits.  Remember, initially we thought there would be a single national set of Essential Health Benefits.  Instead, while we have 10 standard categories, they are defined independently by each state.  These definitions were only meant to last for two years (as a transition period perhaps).  Well the two years is up at the end of 2015, so it's not too soon for stakeholders to begin jockeying for position.  At this time it's unknown if there will be a single national definition, if the existing state definitions will remain, or if there will be some other approach.  Don't worry, I'm sure we'll be talking about this a lot more moving forward.

More on "narrow networks" this week.  We have continued consumer frustration (Obamacare: Anger over narrow networks).  Thoughts on potential changes in regulations (To Prevent Surprise Bills, New Health Law Rules Could Widen Insurer Networks).  And a reminder that they were created for a reason and It’s Probably Not a Good Thing for Regulators to End Narrow-Network Plans.  To the last item I'll add the qualification that while I agree we should keep them we need to be sure that members can access the care they need - (something not always happening now).

The IRS also announced the maximum mandate penalty: IRS: Uninsured face max fine of nearly $2,500.  Remember, this year the penalty is $95 or 1% of income, whichever is greater.  But that one percent of income is maxed out at the cost of coverage (in this case the average cost of a bronze plan), hence the calculation of a maximum dollar amount.

Some thoughts on the health insurance literacy of enrollees: New challenge for Obamacare: Enrollees who don’t understand their insurance plans.

And on the management front, Secretary Burwell announces steps to further strengthen HHS management team - Leslie Dach to join HHS as Senior Counselor.

Medicaid
Before diving into some state specific developments, some good news: Study: Medicaid's benefits start in the womb.  On the not such good news front, a study showing that States that deny anti-psychotics to the poor have lots of mentally ill people behind bars.

Meanwhile:

Medicare
Highlighting Medicare flexibility this week: Medicare Modifies Controversial Hospice Drug Rule and Medicare Testing Payment Options That Could End Observation Care Penalties

VA
As McDonald moves to a positive confirmation vote (probably the week of the 28th) Obama nominee McDonald pledges to ‘transform’ VA. 

While a survey shows that: Survey: New veterans like medical care they got from VA it also highlights problems they face as they try to reacclimate to civilian life.

At the beginning of the week, we thought we saw Progress on VA reform deal, as of the time of this writing (Friday morning) VA reform hits stalemate as the House and Senate continue to disagree about the cost of the bill and how to pay for it.

Drugs
Seems like I could have a Sovaldi section every week.  For background, see last week's post or this great overview: The drug that’s forcing America’s most important – and uncomfortable – health-care debate. Initial sales figures released by the manufacturer show that Gilead’s Hepatitis C Drug, Sovaldi, Is on Pace to Become a Blockbuster.  And as Medicaid Directors, Insurers and other payers try and figure out how to handle the situation, Patient Cures Spur Demand for $1,000 Hepatitis C Pill.

But it's not just Sovaldi, the NY Times looks at The $300,000 Drug.  More expensive than Sovaldi but needed by a much smaller population.

Looking at the cost of drugs, a big development as the first application was accepted by the FDA for a "biosimilar" drug.  Biosimilars are to biologics (a complex drug made from proteins of living organisms) what generics are to chemical drugs.  (We are one step closer to a new generation of cheaper drugs).

At the same time we see A Dearth in Innovation for Key Drugs (few new antibiotics in the pipeline) which could be problematic since Antibiotic resistance could be 'next pandemic,' CDC says

On the vaccine front, a different kind of story - adoption of the HPV vaccine is going much slower than hoped: Doctors still hesitant to urge HPV vaccine for teenagers.  Meanwhile, the same old story as Student filmmakers find themselves drawn into the vaccine/autism fray.

Do we really know what we are doing when it comes to medical care?  Not as much as you might think (or hope).  Although many people are doing this, Tylenol won't help your back pain. Here's what you need to know .

And in a disturbing but not surprising story the Safety profile of blockbuster blood thinner comes under question as a pharmaceutical company puts profits before patient safety.

System Transformation
Do you have to pay more for better quality medical care?  I hope my regular readers know that nothing could be further from the truth - study after study have shown there is no correlation between price and quality in our system, but Half of Americans think expensive medical care is better. They're wrong.  You can find the full results of the survey here: Finding Quality Doctors: How Americans Evaluate Provider Quality in 

No question that HIPPA is complicated.  But the confusion that comes from the regulation is not helped when provider groups either abuse it or outright lie about its provisions: When Federal Privacy Laws Protect Hospitals Instead Of Patients.

We know there are Bottlenecks in Training Doctors.  In CA, Governor signs bill to let doctors graduate faster to help alleviate the problem.

A look at how our current reimbursement method is not helping the system: Busy Doctors, Wasteful Spending and a look at a promising alternative: The Alternative Payment Methodology In Oregon Community Health Centers: Empowering New Ways Of Providing Care.

Siri and Watson are getting married, what will that mean for our system: IBM-Apple Deal: Healthcare iOS Nirvana?  And is this what their children will be like?  The Future of Robot Caregivers

As promised, since I haven't made you cry in a few weeks (at least intentionally), here you go: Doctors are not the only ones who can keep a painful secret.

And ending on a Happy note, to commemorate the week of Weird Al Yankovic a different type of parody video: Choosing Wisely Video.


All comments and suggestions are welcome; please let me know what you think.  And as always, thanks for reading!
Funded by support from the Maine Health Access Foundation
*The title is a tribute to the BBC show, the NBC show and the amazing Tom Lehrer album "That Was The Year That Was"
Posted by at