Posted on March 9, 2015
A new Health Affairs blog examines the oral arguments in King v. Burwell, focusing on the plantiffs’ reading of the Affordable Care Act (ACA) regarding states establishing their own exchanges for the benefit of federal subsidies. Under this interpretation,the law was intended to encourage states to create their own exchange, or else receive no federal subsidy funds, which may be viewed as coercive by the Court. The blog draws parallels between the Medicaid coercion argument in NFIB v. Sebelius, where the Supreme Court ruled that requiring states to expand Medicaid under the ACA at the price of withdrawing federal funding would be unconstitutionally coercive, and the similar argument of coercion brought up in the King case. The author contends that potentially the Court will realize the deeper constitutional implications of upholding the plantiffs’ reading of the law and allow federal subsidies to continue flowing through federally facilitated exchanges.
Posted on March 4, 2015
A perspective piece published in the New England Journal of Medicine predicts potential fallout from a ruling in favor of King in the King v. Burwell case currently being decided by the Supreme Court. If the challengers prevail, the U.S. Treasury will likely have to stop issuing tax credits to users of federal exchanges. Enrollees who are unable or unwilling to pay the full cost of their insurance premiums could see their coverage terminated. The authors suggest that states could choose to set up their own exchanges and delegate some responsibilities to private contractors, in order to avoid some of the technological challenges. However, the authors also note that some states may be unwilling to set up their own exchanges, in the same way they chose not to expand Medicaid. This could lead to substantial coverage gaps for many Americans.
Posted on February 17, 2015
The Government Accountability Office (GAO) issued a report examining (1) the extent to which Medicaid enrollees have private insurance, and (2) state and CMS initiatives to improve third-party liability (TPL) efforts. GAO found that 7.6 million Medicaid enrollees (13.4 percent) had private health insurance in 2012. Additionally, the number of Medicaid enrollees with private health insurance is expected to increase with the expansion of Medicaid. To combat this issue, GAO recommends that the Centers for Medicare and Medicaid Services (CMS) routinely monitor and share across all states information regarding key TPL efforts and challenges, as well as provide guidance on state oversight of TPL efforts conducted by Medicaid managed care plans.
Posted on January 26, 2015
A new report released by the Congressional Budget Office (CBO) estimates that the coverage provisions of the Affordable Care Act (ACA) will result in $76 billion in net costs to the federal government in 2015 and $1,350 billion between 2016 and 2025. These costs come almost entirely from tax subsidies, accounting for $32 billion in 2015, and from the increase in spending from Medicaid expansions, $47 billion in 2015. CBO predicts that these costs will be offset slightly by an estimated $2 billion in penalties paid by the uninsured in 2015. This new CBO estimate of the ACA’s coverage provisions represents a 7 percent decline since their last estimate.
Posted on January 14, 2015
Consulting firm Leavitt Partners released a white paper outlining several scenarios that Congress, the states, and the administration could take should the Supreme Court rule against the administration in the King v. Burwell case. Under the first scenario Congress could amend the Affordable Care Act (ACA) in a way that establishes the subsidies were meant for all Americans regardless of who establishes the exchange. In the second proposed scenario Congress would pair a fix to the ACA with “material concessions”, such as the employer mandate or premium tax credit thresholds. In the third scenario outlined in the white paper, Congress would take no action regarding the Court’s decision, leaving it up to states to create their own contingency plans. The Leavitt white paper also suggests several fall-back ideas that may be under consideration by the administration as well as potential state reactions.
Posted on January 13, 2015
Two studies by the Robert Wood Johnson Foundation (RWJF) and the RAND Corporation came up with similar findings regarding the Supreme Court’s potential decision in the King v. Burwell case. RWJF speculates that a ruling in favor of King, eliminating subsidies in federal exchanges, would shrink the nongroup insurance market by 9.7 million nonelderly adults and increase the number of uninsured Americans by 8.2 million in 2016. The RAND study also predicts that a ruling in favor of King could cause a 47 percent increase in premiums in federally facilitated marketplaces (FFM). The implications of the court’s decision could ricochet beyond those directly losing subsidies, affecting higher income individuals and even people who obtain coverage outside of the marketplaces.
Posted on December 18, 2014
A study by the Urban Institute finds that the Affordable Care Act (ACA) may reduce, but not eliminate health care coverage disparities. The report projects that under the ACA uninsurance rates will fall for each racial/ethnic group, narrowing coverage differences between whites and each minority group, except for blacks. If, however, all states were to expand their Medicaid programs, researchers predict that uninsurance rates would fall further for all racial/ethnic groups, with blacks experiencing a marked reduction.
Posted on December 5, 2014
The Centers for Medicare and Medicaid Services (CMS) Office of the Actuary published its annual health care spending report in the policy journal, Health Affairs. The report shows that total health care spending in the U.S. increased 3.6 percent in 2013. However, this increase was slower than that of 4.1 percent in 2012, and the share of GDP devoted to health care spending has remained at 17.4 percent since 2009. The deceleration in health care spending growth can be attributed to a slower growth in private health insurance and Medicare spending. Slower growth in spending for hospital care, investments in medical structures and equipment, and spending for physician and clinical care may also contribute to the low overall increase.
Posted on November 14, 2014
A new Government Accountability Office (GAO) report reveals that only only 76,000 people enrolled in the 18 states running their own Small Business Health Options Program (SHOP) exchanges as of June 1. While GAO did not have data for the federal-run SHOP exchanges, CMS told the office that it expected similar enrollment trends for the small business marketplaces it is operating. A number of factors may be contributing to the low enrollment numbers such as a lack of interest in the Affordable Care Act’s (ACA) small business health tax credits, misconceptions about SHOP availability by employers, and the ability of employers to renew pre-ACA plans. GAO noted that these factors may also affect future growth.
Posted on November 12, 2014
A new American Medical Association (AMA) policy encourages policymakers of all levels to focus their efforts on working together to identify realistic coverage options for adults currently in the coverage gap, especially in states that are not expanding Medicaid under the Affordable Care Act (ACA). Given their concern with the high number of low-income adults who remain uninsured in states that have opted not to expand their Medicaid programs, the AMA suggests that these states consider using waivers to expand coverage. The organization also urges states to publicly report annually on efforts to cover the uninsured.