Administration Touts Benefits of Health Reform Law

HHS announced that about 12.8 million policyholders will receive over $1.1 billion in rebates from health insurance plans that do not pay out medical claims exceeding the PPACA’s minimum loss ratio (MLR) of 80% of premiums in the individual and small group markets and 85% in the large group market.  HHS said that only about 67% of covered individuals were in plans that met the MLR.  In light of the Supreme Court decision, and in an attempt to further encourage states to establish health insurance exchanges by 2014, HHS announced that all states now will be eligible for grants to help them establish their exchanges by the deadline.  The new grant funding announcement expands how resources can be used for “Level One” one-year grants and for “Level Two” three-year grants which must be accompanied by state law authority to establish the exchanges.  The amount of the new funding was not made available at the time of the June 29th announcement. Leading up to the Supreme Court decision last week and since, the President, HHS Secretary Kathleen Sebelius and other Democrats have cited the benefits of the PPACA as justification for its “success,” including but not limited to: free preventive benefits made available to 54 million Americans in private plans; the elimination of lifetime coverage limitations for 105 million Americans; and allowing 6.6 million young adults up to age 26 to remain on their parents’ insurance plan.

States Gain Marginal Win on PPACA Medicaid Challenge

In a 7-2 decision, with regard to whether the PPACA’s Medicaid expansion and provisions to withhold existing Medicaid funding for a state’s noncompliance constitutes coercion, all but Justices Ginsburg and Sotomayor agreed that the penalty amounting to the loss of existing funding does violate the constitution.  Chief Justice Roberts said that while Congress can condition the receipt by states of federal Medicaid funding, the states must be given “a genuine choice on whether to accept the offer….”  As a result, it appears that a state is free to reject the new federal funding for expanding Medicaid to persons up to 133% of the federal poverty level in 2014 and that the federal government is barred from withholding federal funding for the state’s existing Medicaid program.  In an attempt to put the best face on the majority ruling from her perspective, Justice Ginsburg said that “Congress’ extension of Medicaid remains available to any State that affirms its willingness to participate….”  Whether any state will decide to reject the near-term 100% funding of the Medicaid expansion remains to be seen.  However, in states that do reject the expansion, those persons who would otherwise become eligible under Medicaid will nonetheless be eligible for federal health insurance subsidies under the health insurance exchanges.  With only a handful of states on target to implement their state health insurance exchanges by 2014, it may spur many in Congress to push for a delay in the 2014 effective date.  If this action is considered in the post-election lame-duck session, the Obama Administration may not offer great resistance given that the federal government is unlikely to be fully able to implement a federal exchange in numerous states which are unable to meet the 2014 deadline for establishing exchanges.  Reacting to this part of the decision, Rep. Henry Waxman, ranking member of the House Energy and Commerce Committee, said “In regard to the Medicaid provisions, it should be clear that the court affirmed the constitutionality of providing health care coverage through Medicaid for all persons up to 133% of poverty.  It did conclude that no state could lose all of its funds for its current Medicaid program … but the major point is that 100% federal funding remains available to assist states in providing this coverage, and states will seize the opportunity to do so.”  On the other hand, the Chairman of the Committee, Fred Upton, countered that “Today’s decision on Medicaid acknowledges at least a small measure of restraint on federal power by rejecting the notion that Congress can cut off all Medicaid funds to a state simply because it chooses not to participate in a massive expansion of the program it cannot afford.”

Recently Introduced Health Legislation

S. 3337 (MEDICARE), to amend Title XVIII of the Social Security Act to provide for the elimination of the Medicare sustainable growth rate (SGR) formula to ensure access to physicians’ services for Medicare beneficiaries; PAUL; to the Committee on Finance, June 25.

S. 3338 (MEDICAL IMAGING/RADIATION THERAPY), to amend the Public Health Service Act and Title XVIII of the Social Security Act to make the provision of technical services for medical imaging examinations and radiation therapy treatments safer, more accurate, and less costly; WICKER; to the Committee on Health, Education, Labor, and Pensions, June 25.

H. RES. 704 (POLIO), commending Rotary International and others for their efforts to prevent and eradicate polio; MCDERMOTT; to the Committee on Foreign Affairs, June 26.
S. 3345 (PROSTATE CANCER), to provide for research and education to improve screening, detection and diagnosis of prostate cancer; BOXER; to the Committee on Health, Education, Labor, and Pensions, June 27.

S. 3351 (PRIVACY), to amend the American Recovery and Reinvestment Act with respect to the privacy of protected health information; FRANKEN; to the Committee on Health, Education, Labor, and Pensions, June 27.

H.R. 6033 (PROSTATE CANCER), to provide for research and education to improve screening, detection and diagnosis of prostate cancer; CUMMINGS; to the Committee on Energy and Commerce, June 27.

H.R. 6043 (HEALTH INFORMATION TECHNOLOGY), to amend the Public Health Service Act and the Social Security Act to extend health information technology assistance eligibility to behavioral health, mental health, and substance abuse professionals and facilities, and for other purposes; MURPHY of Pennsylvania; jointly, to the committees on Energy and Commerce and Ways and Means, June 27.

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