Obama Spikes Reform in SOTU Speech. Where Now for Medicare?
I hope you enjoyed the State of the Union (SOTU) address as much as I did -- it's the Super Bowl of policy geeks. I saw it as an effective rallying tool around a number of the President's goals that will deeply challenge the GOP opposition, like an increase in the minimum wage and immigration reform. But it was the utter lack of any new ideas for Medicare that struck me -- and definitely no olive branch to House Budget Committee Chairman US Rep. Paul Ryan (R-WI) on premium support. So where now for Medicare?
Medicare status quo advocates are turning cartwheels this week. Since the election Democrats have walked back every significant program reform that was on the table since the debt ceiling mess last summer -- eligibility age increase, means testing, and the like. On the eve of across-the-board spending cuts on March 1 and a possible government shutdown on March 27, both driven in part by Medicare deficit politics, the President slammed the door on Medicare reform in both his Inaugural Address and then again in SOTU. And that's tragic: Obama has no better opportunity to save Medicare for the long term than right now. Instead, we're sticking to the path of incremental fixes and accounting gimmicks.
As a nation we have our heads in the sand on the viability of this pillar of American life. Medicare will run out of money no later than 2024. The program is unsustainable in its current form. Everybody in Washington who knows anything about Medicare knows this. What they also know -- but nobody's saying -- is that premium support or something like it is inevitable as the only structural reform that can set Medicare on solvent footing for the long-term.
Former HCFA/CMS Administrators Drs. Gail Wilensky, Mark McClellan, Bruce Vladeck and I all comment on the future of Medicare in First Report Managed Care's latest edition here.
Resources
Listen in as Gorman Health Group's Senior Vice President Bill MacBain shares an update on the impending sequester, what GHG thinks is likely to happen next, and the potential impact on Medicare Advantage.
Visit our website to learn how Gorman Health Group can help support your Medicare Advantage goals.
John Gorman comments on the future of Medicare in the First Report Managed Care's latest edition.
250,000 Agents in the Federal Exchanges???
In a Federal Register notice out yesterday CMS officials are projecting 254,095 health insurance agents and brokers will sign up to sell the "metal plans" in the new federal health insurance exchange (HIX) system. Quarter. Million. Agents. OMG. And the scary part: they face a fraction of the regulatory requirements Medicare sales agents do.
"Federally facilitated exchanges" will operate in some two dozen states next year -- largely in Red States with a significant presence of independent brokers, such as Florida, Texas and Arizona. The final regs on the Federal exchange issued last May included a surprise provision allowing agents to sell exchange products to eligible individuals -- designed to get more enrollment into the program faster through this huge distribution channel.
CMS plans to collect information about producers through a registration process, and by verifying a producer's licensure status and issuer appointments. Once the agents get through the registration process, they will be able to get any required training and take any required exams on the CMS Learning Management System site.
In addition to using the producer data to run the exchange training process, "CMS will use the collected data for oversight and monitoring of agent/brokers." Exchange agents would probably have to register with the system annually, and getting through the entire process could take each agent an average of 4.7 hours, CMS estimated.
Here at Gorman Health Group, we certify, train and manage over 30,000 agents selling Medicare products. And I can tell you that less than 5 hours' training and a bare-bones certification process means there are going to be plenty of sleezeballs selling the "metal plans" to the chronically uninsured. And that will only serve to confuse and exploit huge numbers of them, diminish support for health reform, and bring complaints down upon sponsors. We need a tougher system than CMS outlines here to ensure these vulnerable Americans don't fall prey to predatory salespeople.
Resources
Senior Vice President for Public Policy, Jean LeMasurier, summarizes the February 7, 2013 notice from CMS regarding Agency Information Collection Activity.
Download a podcast on the key components of OEV calls and get advice on how to handle rapid disenrollment -- and other common challenges.
Learn how Gorman Health Group certifies, trains and manages sales agents with our Sales Sentinel tool.
CBO: Slower Growth in Exchange and Medicaid Enrollment
The Congressional Budget Office released its new economic outlook yesterday and predicts a slower start to enrollment in the new exchanges: 7 million people in 2014 -- down from 9 million last July -- and rising by 2016. The CBO report also estimates that 8 million people will enroll in Medicaid in 2014, so about 15 million people will obtain health insurance next year.
CBO says those numbers will jump, and quickly. By 2016, 24 million people will get coverage through the exchanges and 11 million through Medicaid. By 2024, they'll be at 26 million and 12 million, respectively. CBO attributed the slower start to a number of factors, including "the readiness of exchanges to provide a broad array of new insurance options, the ability of state Medicaid programs to absorb new beneficiaries, and people's responses to the availability of the new coverage."
CBO warned that the impact of the health law is a "source of great uncertainty" and said it's difficult to assess the full impact of the law, much of which hasn't been established in regulation or implemented yet.
Resources
Visit our website to learn how Gorman Health Group can help you develop and/or execute on a unique model of care for Medicaid Plans.
Gorman Health Group policy expert Jean LeMasurier provides a summary of proposed rule CMS-2334-P, which reflects new statutory Medicaid and CHIP eligibility provisions.
Listen to a discussion focused on the lessons learned from MA and Part D when it comes to product strategy in the Exchanges.
Hear Gorman Health Group experts discuss the Federal Facilitated Exchange (FFE) and implications for health plans.
Seven Years in the Wilderness for CMS?
We're coming up on the 7th anniversary of the last Senate confirmation of a CMS administrator. Seven years! There have been a succession of interim or acting administrators since, most notably the brilliant, visionary, and ultimately polarizing Don Berwick. Politico has a great piece out today on why our favorite agency has been in the wilderness for so long, and the implications of such long-term "temporary" leadership.
It's time to put partisanship aside and confirm Marilyn Tavenner. This agency has WAY too much crucial work ahead this year for her to not enjoy the full authority of the title Administrator.
Let the Games Begin on Medicare Reform
Just days after President Obama's full-throated support of defending Medicare from structural reforms in his Inaugural Address, Senator Orrin Hatch (R-UT) yesterday threw down the gauntlet and maintained that reforms are needed in both Medicare and Medicaid in order to reduce the national debt. Hatch, the ranking Republican on the Senate Finance Committee, laid out five proposals that have enjoyed bipartisan support in the past and should be included in deficit reduction talks. They include raising the Medicare eligibility age, changing Medigap coverage, streamlining Medicare cost-sharing under Parts A and B and adding a catastrophic cap, competitive bidding in Medicare, and Medicaid per capita caps.
Let the Games begin.
Resources
Learn how Gorman Health Group can support your Medicare goals.
Visit our website to learn how Gorman Health Group can help you develop and/or execute on a unique model of care for Medicaid plans.
FFE — Notice of Intent to Apply
Things should be starting up in the next few weeks for health plans interested in offering products in the FFE. Given the lack of specificity in the final exchange regulation and CMS' pursuit of state help, potential applicants will be in a constant scramble to see who's on first between the states and CMS. So, there is a need for tactical observation and quick analysis to determine their ability to meet each new twist as it is announced. It is a moving target of regulation that does not lead to a sense of certainty for any health plan that they can or will apply.
Preliminary CMS timelines call for submission of a notice of intent (NOI) to apply sometime in February. CMS relies on the NOI to begin to set up their automated systems for actual applications that will be received beginning in April. While CMS does not use the NOI to determine their need for resources, a large response could do just that. Also, the NOI is not binding, starting with a fairly incomplete set of requirements means that applicants can only estimate their willingness to follow through with an application and merely send one in to check the startup box in the process.
CMS has also let it be known that there is no timeline for states to decide if they want to be a regulator in the FFE. Some state legislators in FFE states are being pressed for more state regulatory action by their constituent health plans. So, it is likely that some health plans will not know which regulations will be applied as they make a decision to complete the application.
No doubt, CMS is looking for the lowest common denominator that will relieve their worry over resources as well as the concerns of potential applicants. However, potential applicants need to know ASAP if the FFE requires building new structures and operations or not when state rules are determined sufficient. While submitting an NOI is a no-brainer, the expense of actually making the application under these uncertain circumstances has real budgetary meaning for some health plans and may staunch some of the willingness to complete the application.
The preliminary FFE timeline looks like this.
February — March
- Health Plans submit Notice of Intent to apply
- FFE Health Plan Application released
April — May -
- CMS begins review of applications
- CMS releases benefit module
- CMS tests consumer application
June — July — CMS Call Center goes live
- CMS conducts all application reviews
- CMS reviews all benefit proposals
August — September
- CMS completes all health plan FFE agreements
- CMS readies each FFE for enrollment operations
October
- Open Enrollment begins
November - December
- Open Enrollment continues
January 2014
- Open Enrollment continues
- QHPs begin coverage period for enrollees
March 2014
- Open Enrollment Ends
Resources
Gorman Health Group Senior Vice President of Public Policy Jean LeMasurier offers a summary of the latest guidance on the state partnership exchange, released on January 3, 2013 from HHS.
Download Jean LeMasurier's whitepaper on Insurance Exchanges in the ACA.
Listen to a discussion focused on the lessons learned from MA and Part D when it comes to product strategy in the Exchanges.
Read Gorman Health Group Chairman, John Gorman's, blog titled "Exchange Activity Kicks into High Gear".
Obama's Inaugural Hard Line on Medicare/Medicaid
Inauguration Day in Washington is a blessedly nonpartisan event celebrating our messy yet peaceful democracy with great pomp. But President Obama, with renewed certainty, drew a hard line in his inaugural address against entitlement cuts that could fundamentally change Medicare and Medicaid. And in doing so he doubled down with Republicans in the next rounds of the deficit reduction cagematch.
"We must make the hard choices to reduce the cost of health care and the size of our deficit. But we reject the belief that America must choose between caring for the generation that built this country and investing in the generation that will build its future," the President said. With a slap at Mitt Romney's "47%" comments, Obama asserted that our entitlement programs "strengthen us" and "do not make us a nation of takers; they free us to take the risks that make this country great."
Obama has said he's willing to make "modest" changes to Medicare to keep it solvent in the long term, but he wants to do so by "bending the curve" on costs, not by major structural reforms. In repeating these lines he's acknowledging what he owes to core constituencies in his own party, and flushing the ideas of an eligibility age increase or a serious look at premium support. Republicans want big structural changes to Medicare, and point out that their ideas did better with voters in the election than a lot of Democrats thought they would. But that doesn't mean they'll get what they want from a President who has clearly concluded that these folks on the Hill won't be any help. Like, ever.
Obama reminded the inaugural audience that the Affordable Care Act was intended to be a crown jewel of the America's safety net. "Together, we resolved that a great nation must care for the vulnerable, and protect its people from life's worst hazards and misfortune," Obama said. Red meat for the left -- and a warning to the GOP. The President's got his swaggah back.
Resources:
Learn how Gorman Health Group can support your Medicare goals.
Visit our website to learn how Gorman Health Group can help you develop and/or execute on a unique model of care for Medicaid plans.
Exchange Activity Kicks Into High Gear
With all the activity underway across the states, you'd think we were less than 10 months away from when health plans in the Exchanges begin enrolling or something. Oh wait...HOLY CRAP we're less than a year from launch! The game is on, friends:
- Minnesota is taking steps to put its health insurance exchange into law, which has been operating under an executive order for over a year.
- Florida's special Senate committee will meet for the second time to discuss potential implementation of the healthcare law.
- California's budget, released last week, endorsed selling Medicaid bridge plans (low or zero premium plans for people earning between 138% to 200% of the FPL) on the state's exchange.
- Mississippi may receive a decision this week or next from HHS on whether the state's exchange has received conditional certification.
- Connecticut reported that five insurers and four dental plans applied to participate on its exchange.
- Oregon announced 16 insurers applied to sell on its exchange.
- Washington DC is in the process of engaging stakeholders and has created work groups on essential health benefits and established advisory boards for plan management and consumer assistance.
- Illinois's Health Care Reform Implementation Council is meeting today and exchanges may be a topic of conversation.
It's time to get real, folks: this is happening. Starting in October.
Resources:
Listen to a discussion focused on the lessons learned from MA and Part D when it comes to product strategy in the Exchanges.
Hear Gorman Health Group experts discuss the Federal Facilitated Exchange (FFE) and implications for health plans.
The Violence Done to Health Reform by Congress and SCOTUS
As President Obama's second (!) Inauguration approaches on Monday, I was thinking on his signature domestic accomplishment and the violence done to it by 2 years of relentless opposition in Congress and some surgical cuts in the Supreme Court (SCOTUS). John McDonough, the excellent resident health policy geek at Boston.com, beat me to it with a fantastic Affordable Care Act (ACA) damage assessment, where he concludes the law is battered but standing tall on the verge of implementation.
McDonough points out there have been eight significant changes to the ACA since the law passed in March 2010. Seven of the eight changes were done by the hands of furious Republican opposition in Congress, and one in the Supreme Court:
- Medicaid expansion is voluntary for states
- The Class Act is repealed
- $5B cut from the Prevention and Public Health Fund
- Funding for Community Health Centers is cut
- An IRS information reporting requirement on payments to corporations was repealed
- Congress imposes new penalties on Insurance Exchange subsidy recipients whose incomes increase during a coverage year
- Unspent funding for Health Insurance Co-Ops is rescinded, and
- Employee free choice vouchers are eliminated
After some three dozen repeal attempts in the last two years at taxpayer expense in excess of $50 Million, it's impressive the damage wasn't greater. And there's more fighting to come -- again just yesterday US Representative Paul Ryan (R-WI), the GOP Vice Presidential candidate and Chairman of the House Budget Committee, said that he still would like to repeal and replace the Affordable Care Act. It ain't over yet.
Resources:
Leverage Gorman Health Group's experience with Medicaid health plans to develop a unique model that works for you.
Listen to a discussion focused on the lessons learned from MA and Part D when it comes to product strategy in the Exchanges.
What Happens to Medicare/Medicaid If There's a Government Shutdown?
I hate to have to say it, but the "fiscal cliff" debate/debacle last month is going to feel like a speed bump compared to what's coming here in DC on the debt ceiling next month. At the height of its dysfunction right now, the relationship between the President and the Congress points to a near-inevitable government shutdown in the next 60-90 days. Which raises the question of what happens to Medicare and Medicaid when DC closes its doors. The answer? It depends on how long the shutdown lasts, but it ain't pretty no matter what. If it goes longer than 30 days, it's going to hurt, bad.
As the battle lines develop, that's looking increasingly possible. More than half of House GOP members, including some party leaders, are prepared to shut down the government to make their point on cutting spending as part of any debt ceiling deal. House Speaker John Boehner "may need a shutdown...so they have an endgame and can show their constituents they're fighting," said a House leadership advisor. The government will shut down if the House GOP were to refuse to extend the law funding government operations on March 27.
A full-blown extended government shutdown hasn't happened since the winter of 1995-1996 -- my last year as a Clinton appointee at HCFA, now CMS. The shutdown was a 2-part ordeal, lasting 5 days in November 1995 and another 21 in December 1995 and January 1996. Medicare continued to pay physicians and hospitals during the shutdown, and the ability to reimburse providers and plans was never in question, because claims are paid out of Medicare trust funds that are separate from Congressional appropriations.
However, payments to CMS's Medicare vendors for claims processing comes from the CMS operating budget, which — unlike the trust funds — is vulnerable to Congress turning off the spigot. Therefore, in 1995 and 1996, CMS's claims vendors processed and paid claims on a credit basis, with the expectation of being made whole later. An HHS official warned during a Congressional hearing on the 1995-1996 shutdown that Medicare claims vendors "would have to cease Medicare payments if their cash ran out due to a longer hiatus." So if the shutdown were to last for many months, Medicare fee-for-service benefits and payments to providers would stop. Health plans are paid on the 1st of the month, so as long as a shutdown doesn't exceed 30 days, there should be minimal disruption to cash flow.
Most in Washington expect Medicaid's core functions to continue unimpeded during a shutdown -- as long as it's fairly short. "According to the House Committee on Energy and Commerce, because Medicaid allotments are paid to states in advance on a quarterly basis, it is likely states will not see an immediate impact from a temporary government shutdown," Rep. James Renacci (R-OH) says in a shutdown bulletin on his website. That means physicians and other health-care providers should continue to be paid as usual as they serve the Medicaid and SCHIP (State Children's Health Insurance Program) populations. If Congress runs up to the midnight deadline with no plan to fund the government, federal agencies including CMS must designate which workers are performing essential work. Those people would be asked to stay on the job, while nonessential workers would be furloughed. It's unclear if furloughs might have ripple effects for some Medicaid services, such as enrolling new beneficiaries for coverage.
So, short answer: both entitlements are likely to continue to operate and administer benefits and payments during a government shutdown -- but only if it's brief. If a political impasse occurs and a shutdown stretches into weeks or even months, it's anybody's guess what happens to Medicare and Medicaid. And if there's disruption to payments, for even a few weeks, the economic and health care consequences will be severe.
Welcome to the "new normal" in the age of austerity here in DC.
Resources:
Learn more about how Gorman Health Group can help support your Medicare goals.
Visit our website to learn how Gorman Health Group can help you develop and/or execute on a unique model of care for Medicaid plans.