Health Law and Policy Update
Headlines of the week
Health reform repeal fails in Senate
As expected, a measure to repeal the Patient Protection and Affordable Care Act failed in the U.S. Senate on Wednesday. Kaiser Health News compiled a selection of coverage from various media outlets. Republican leaders have said the repeal vote will not be the last.
The vote came a couple of weeks after a similar measure passed the House of Representatives, which backers acknowledged was only symbolic because they didn't expect sufficient support from the Senate.
Federal judge strikes down Affordable Care Act
A federal judge in Florida ruled Monday the individual mandate in the Affordable Care Act is unconstitutional. He also ruled the individual mandate is so integral to the act that its unconstitutionality renders the entire act unconstitutional. He declined to issue an injunction, saying he believed his ruling to be sufficient to bar any federal official from implementing the act.
Jane Perkins with the National Health Law Program wrote on the question of whether states should continue implementing health reform in light of the Florida decision: "The judge did not rule against any state. His ruling only applies to the federal government. States can and should continue what they are doing: carefully paving the way for health reform in 2014--activity that is and will be matched by significant federal matching funds."
Colorado is moving forward with implementation, as are most states.
While the decision about the constitutionality of the mandate was expected, the court's analysis that the mandate provision is not severable, and therefore the entire act is unconstitutional is surprising. Courts typically go to great lengths to uphold the constitutionality of a statute -- in fact, statutes are presumed constitutional. If one section of a law is found to violate the Constitution, the preferred result is to sever that section, not invalidate the entire law. There are numerous provisions of the act that do not depend at all on the individual mandate -- examples include support for primary care health clinics across the country, incentives designed to increase the number of medical practitioners, closure of the prescription drug "donut hole" for seniors, development of additional resources and programs so seniors can age in the community, and a myriad of other provisions.
The ruling will certainly be appealed to the 11th Circuit Court of Appeals and work its way up to the U.S. Supreme Court. The tally is now 2:2 -- two federal courts have upheld the mandate and two now have found it unconstitutional.
Unless the Supreme Court departs substantially from previous decisions, the individual mandate will likely be found constitutional. In the meantime, Coloradans are already seeing considerable benefits from the provisions of the act.
Families USA issued a statement calling the ruling "radical judicial activism run amok" and noting the harm Americans would suffer if it's upheld.
The National Health Law Program provides analysis of the ruling that concludes that ultimately "the result was not a surprise and doesn't really alter the legal progress of the case." The organization also issued a statement saying the ruling is "on the wrong side of history." A news release from the program said: "The individual mandate is crucial to assuring that all Americans are able to obtain health insurance, regardless of their income and health status, and to controlling health care costs as all Americans are brought under the coverage tent. And, as two other federal courts have already recognized, it is well within Congress' power to regulate how, and when, people participate in the health care market. Thus, the individual mandate is constitutional."
The New Republic and the Georgetown Center for Children and Families blogs offer some insight into whether the ruling will interfere with implementing health reform.
Senate takes up 1099 reporting requirement
The U.S. Senate voted 81-17 Wednesday to rescind a revenue-generating provision of the Affordable Care Act that requires businesses to issue a 1099 for cumulative annual purchases of more than $600 from any one business. The requirement was not due to take effect until 2012. Some members of the business community had raised concerns about the administrative burdens the provision would impose, and President Obama referred to the requirement in his State of the Union address as something that might need to be fixed.
A more complete explanation of the issue was in the Sept. 17 issue of Health Law and Policy Update.
The provision was anticipated to raise $22 billion in new revenue over 10 years by encouraging businesses to report income that might otherwise not be reported to the IRS.
The lost revenue will be made up by cutting discretionary spending that has not been used yet. The actual dollar amount on the table is $44 billion because the assumption is some unobligated funds would not have been spent ever. That cut, if made final, is of concern and could affect a lot of programs, but there is no way to know which ones at this point. The Department of Defense, Department of Veterans Affairs or the Social Security Administration are exempt from cuts.
What's new
Sebelius outlines flexibility in Medicaid program for governors
Health and Human Services Secretary Kathleen Sebelius sent a letter to state governors Thursday outlining some options states have for realizing savings in their Medicaid programs. The letter comes as states are experiencing significant stress on their budgets due to slow economic recovery, increased caseloads and the imminent end of additional federal Medicaid assistance. Some states are requesting permission from the federal government to waive maintenance of eligibility requirements under the Affordable Care Act, thereby allowing them to cut eligibility to their Medicaid programs. Sebelius' letter said she is investigating her authority to waive the requirements.
This week marks the two-year anniversary of the children's health insurance law
Two years ago this week, after a long and hard fought battle, Congress passed and President Obama signed the Children's Health Insurance Program Reauthorization Act. Since passage of CHIPRA, states have increased children's enrollment in Medicaid and CHIP, decreased administrative barriers to accessing health care and increased use of technology to facilitate enrollment. Colorado received more than $13 million in a bonus payment for its efforts to reduce administrative barriers to access and has increased enrollment in Medicaid and its Child Health Plan Plus program since the beginning of 2010. Colorado has enrolled more than 62,000 children in Medicaid since CHIPRA passed in February 2009 and more than 20,000 children in the past year.
Advancing the debate
By insurance company definition, most have a pre-existing condition
Protections in the Affordable Care Act for people with pre-existing health conditions extend to more than half of Coloradans, according to a new report from the Department of Health and Human Services.
The report found 50 percent of Coloradans younger than 65 have a pre-existing condition as defined by insurance companies, such as asthma, depression or a recent prescription to treat migraine headaches. The rate of pre-existing conditions is even higher for older people, the report found -- 80 percent of Coloradans ages 54 to 65.
Prohibiting health insurance companies from denying coverage to people with pre-existing conditions was an essential part of the health reform law passed last year. It said insurers may not deny coverage to children because of pre-existing conditions starting Sept. 23, 2010. The same protection extends to adults on Jan. 1, 2014.
Insurance companies have often denied individual policies to people with pre-existing conditions or charged much higher rates for policies that specifically exclude coverage of treatment of the pre-existing condition. The problem is usually most visible to people who buy insurance in the individual market rather than through a large group, such as an employer. As people have lost jobs and been forced to purchase in the individual market, many have been shocked to find out how insurance companies define a pre-existing condition.
Some examples of pre-existing conditions are shown in an insurance document for HealthNet. Common reasons for denial of coverage are cancer in the past 10 years, heart disease, arthritis, depression, stroke, high blood pressure, autoimmune disorders and HIV.
'Essential health benefits' a critical part of policies sold through exchanges
Experts at the Institute of Medicine are studying which health services should be required to be covered under policies sold through state-based health insurance exchanges, a key feature of the Affordable Care Act.
The health reform law says insurers that participate in the exchanges must cover certain "essential health benefits." The law identifies some services that must be included in the package, but it leaves development of a detailed definition to the Department of Health and Human Services. The Institute of Medicine is creating recommendations at the request of Health and Human Services Secretary Kathleen Sebelius. The health insurance exchanges will be established in 2014.
"Ensuring a robust and comprehensive essential benefit package is critically important for individuals who will seek coverage in the Exchanges, especially those who are low-income and/or who have special health care needs," the National Health Law Program (NHeLP) said in a Jan. 14 e-mail message. A paper from NHeLP discusses essential benefits for children in the exchanges.
An expert from NHeLP was among the participants in a meeting convened by the Institute of Medicine last month to study the issue. Audio from the meeting is available on the institute's website.
Health Law and Policy Update is issued weekly by the health staff of the Colorado Center on Law and Policy. Subscribe by e-mail or read previous editions.
Health Care Director
Elisabeth Arenales
Health Care Attorney
Adela Flores-Brennan
Special Counsel
Ed Kahn
Communications Director
Perry Swanson
Released Feb. 4, 2011