House and Senate Pass Budget for FY 2014 & 2015

On a somewhat bipartisan 64-36 vote, the Senate passed the budget resolution that had cleared the House late last week. The plan sets top line funding levels for the remainder of FY2014 and all of FY2015, providing approximately $63 billion in relief from the sequester cuts that had been imposed as part of the 2011 Budget Control Act ($45 billion in 2014 and $18 billion in 2015). The restored funding will be split evenly between defense and non-defense discretionary spending.

The budget also includes $85 billion in cuts and user fees over ten years, including an extension of the sequester through 2023, an increase in airline fees, minor cost-saving reforms of civilian and military retirement programs, reductions in various government overpayments, and an increase in the premiums corporations pay to the Pension Benefit Guaranty Corporation. Also part of the final deal was language providing a temporary patch on the Sustainable Growth Rate. This so-called “doc fix” is meant to buy time for a bipartisan, bicameral group of authorizers who are closing in on a permanent fix to the Medicare physician reimbursement system.

Nine Republicans, including Saxby Chambliss (GA), Susan Collins (ME), Orrin Hatch (UT), John Hoeven (ND), Johnny Isakson (GA), Ron Johnson (WI), John McCain (AZ), Lisa Murkowski (AK) and Rob Portman (OH), joined all 55 Senate Democrats in supporting the measure. The bill enjoyed significantly more bipartisan support in the GOP-controlled House, where it passed with the support of 169 Republicans and 163 Democrats.

Already, members on both sides of the aisle are talking about undoing cuts included in the deal —particularly the 1 % annual reduction in cost of living increases for military retirees under age 62. On the other side of the equation, conservative members who opposed any reduction in sequester-level spending are saying they may want to reimpose some of the cuts during negotiation of the debt ceiling early next year.

Top Senate Dem on Health to Depart for China

Today, President Barack Obama nominated Senate Finance Committee Chairman Max Baucus (D-Montana), whose panel oversees all federal health policy in the chamber, as his next ambassador to China. Baucus had already announced earlier this year that he would not be running for re-election in 2014. Still, he was expected to have an active final year in office, between likely efforts by some Senators to reform parts of the Affordable Care Act, an emerging permanent “doc fix” that would eliminate the Sustainable Growth Rate for Medicare physician reimbursement and his stated desire to move a comprehensive, bipartisan tax overhaul along with his House counterpart, Ways and Means Chairman Dave Camp (R-MI).

The question of who will succeed Baucus as chairman is not formally settled. Senator Jay Rockefeller (D-WV) is next in line in terms of seniority, but he is also retiring next year and is currently head of the Commerce, Science and Transportation Committee. Senator Ron Wyden (D-OR) follows Rockefeller in the order of succession and insiders speculate that Wyden will likely get the nod.

Obama Administration Makes Hardship Waivers Available to Some with Cancelled Policies

In another attempt to mitigate the transition to full implementation of the Affordable Care Act, the Obama administration announced on Thursday that those people who have had their policies cancelled in the individual market will be considered to have qualified for a hardship exemption. Persons in this category are now exempted from the individual mandate and entitled to purchase “catastrophic” health coverage, with fewer mandatory benefit requirements than most plans face as of 2014. This stripped-down coverage is otherwise only available to those under 30.

The policy interpretation was prompted by letters from a number of Democratic Senators, led by Mark Warner (D-VA), urging that HHS consider the cancellation of one’s policy and subsequent inability to find a comparable one at the same or lower price, “an unexpected natural or human-caused event,” which was one of the criteria for receiving an exemption. Insurance officials said the move could be damaging to the carefully balanced risk pools that will be required to allow exchanges to function effectively.

In other federal exchange news, the White House announced a replacement for Jeff Zients, who had stepped in to lead the repairs of HealthCare.gov following its launch. Former Microsoft executive Kurt DelBene will take over officially on January 28. He is married to U.S. Representative Suzan DelBene (D-WA).

Some State Exchanges See Big Enrollment Boosts, Others Continue to Struggle

Led by California, some state-based exchanges reported significant increases in the number of people who have enrolled in coverage. The Golden State saw 50,000 people sign up for coverage in the first week of December. Connecticut is reporting that 1,400 people a day are enrolling. And Kentucky says enrollment is up 40 percent on its exchange since Thanksgiving.

Still, some state marketplaces continue to struggle, due in large part to ongoing issues with their web portals. In Massachusetts, where a well-functioning marketplace had been in place since 2007, only 1,400 people have signed up for new coverage due to technical glitches with the Commonwealth Connector’s revamped enrollment system. The revamp prompted the state to allow the 100,000 low-income individuals, who were to be transferred to the new system, to stay on their existing coverage through March.

As a result, the enrollment deadlines on many state-run marketplaces are being pushed to the logistical limit for plans effective January 1. Washington pushed its cutoff to December 23, after its site was forced to shutdown for repairs for the first week of December. Maryland recently announced an extension until December 27, 2013, with participants having until January 15, 2014  to pay their first month’s premium. Rhode Island and Minnesota share the last-minute title, with both states moving their deadline for January 1, 2014 coverage to December 31, 2013.

With the upcoming holidays our next edition will come out January 10th. Have a very Merry Christmas and Happy New Year!

From the States

A complete roundup of this week’s exchange action in the states is available through our State of the States: Health Insurance Exchanges publication here.

Louisiana. New Orleans’ health commissioner, Karen DeSalvo, has been tapped by HHS Secretary Kathleen Sebelius as the agency’s national coordinator for health information technology, succeeding Farzad Mostashari.

Minnesota. MNSure executive director April Todd-Malmlov stepped down from her position on Tuesday, becoming the fourth state marketplace executive to lose her post over poor website performance . The marketplace has weathered technical issues and low enrollment. Maryland Health Connection executive director Rebecca Pearce resigned earlier this month under similar circumstances.

Pennsylvania. The Commonwealth announced a round of public hearings on the 1115 Medicaid Demonstration project that Governor Tom Corbett (R) is proposing. Hearings will be held in six cities across Pennsylvania to solicit input on the plan, which would expand Medicaid using private insurance coverage, along the lines of the expansions approved by CMS in Arkansas and Iowa.

Virginia. Health Keepers, Humana and VA Premier Health have been chosen to operate the Commonwealth’s dual eligible alignment demonstration program. Commonwealth Coordinated Care will begin operating in April 2014 and will serve older adults and individuals with disabilities, including those receiving long-term services and supports.

Calendar: Looking Ahead

The Senate and House are on Christmas recess and scheduled to return on January 6 and January 7, respectively.