Thursday, July 24, 2014

What’s up with the ACA Now?

A Roundup of Recent News and Developments on the Affordable Care Act

For a while there, the news bits about the ACA were fast and furious – delays, changes, delays and more delays, court challenges, failed Exchanges – you name it, it was happening. Then it got fairly quiet. Or maybe the media just got tired of it. I know I did.

Now, over the last couple of weeks, there has been another spate of developments; all interesting, but the long-term effects will be hard to predict.

More Delays
The Employer Mandate (or actually, the penalty under the Employer Mandate) was delayed. It’s due to take effect in January 2015 and The Hill reports that businesses still don’t have the final forms or technical guidance they’ll need to comply with the reporting requirement under this mandate. "These forms will be made available in draft form in the near future," said a spokesman for the IRS. This has fired up the discussion again on whether the Employer Mandate is even necessary to the success of the law. Of course, President Obama is already under attack for making what many feel are unauthorized changes to the law. We’ll see how this plays out.

Lower Premiums?
Many Americans are still waiting to see the promised reductions in health insurance premiums. A Gallup poll finds that over four-in-ten Americans are spending more on health care in 2014 than they did in 2013. Only 8% reported spending less on health care than in 2013. Interestingly, one of the elements of the new law that was supposed to help control health care costs was the Small Business Health Options Program exchanges (one of the many delayed features). It finally went into operation last October, but HHS has not come out with numbers of enrollments despite several requests for data. The SHOP exchange apparently suffered even more technical problems and delays than the exchange for individuals and families. "The SHOPs opened, although without online enrollment and many promised features, on October 1, 2013," Rep. Sam Graves (Mo.), chair of the House Small Business Committee, wrote in his latest letter to the Centers for Medicare and Medicaid Services, which oversees the exchanges. "Over seven months later, we still do not have any federal and some state SHOP enrollment data."

Graves was later told that the data he requested was "not currently available". Guess what? CMS officials explained that, unlike on the individual exchange, employers are not required to first verify their eligibility with federal regulators before enrolling in a plan on one of the state-based or federal small business exchanges. This is very interesting. See the next item!

Exchange Fraud
Investigators with the Government Accountability Office were able to get subsidized health insurance premiums on the exchanges using fake names. The GAO reports to Congress that there’s still a huge backlog of applications with "discrepancies". Eleven of 18 fake applications were accepted. The White House said that 6 of them were blocked by eligibility checks built into the system, but the GAO says the undercover agents were able to find a way around those blocks and enroll anyway.

The investigators found:

—Contractors processing applications for the government told the GAO that their role was not to ferret out potential fraud.

—Five of six bogus phone applications went through successfully. The one exception involved an applicant who refused to provide a Social Security number.

—Six online applications were caught by an identity checking system. But investigators simply contacted a call center and all six were then approved. Kind of a big hole in the security net.

—The GAO also tried to check the reliability of counselors providing in-person assistance. In five out of six cases, investigators were unable to get help. In the final case, the counselor correctly told the undercover investigator that their stated income would not entitle them to subsidized coverage.

Does this give anyone confidence that those who don’t qualify for subsidies won’t get them anyway?

And finally, probably the most interesting is…….

Dueling Court Decisions
Two U.S. appeals courts delivered opposite opinions on the legality of the subsidies under the ACA. The U.S. Court of Appeals for the District of Columbia Circuit ruled that the Internal Revenue Service lacked the authority to allow subsidies to be provided in exchanges not run by the states. If it stands, this ruling could put at risk the subsidies given to millions of people who bought insurance in the 36 states where the online insurance exchanges are run by the federal government. Judge Thomas Griffith, writing the majority opinion, said they concluded "that the ACA unambiguously restricts" the subsidies to "exchanges ‘established by the state.’ "

But wait! Just hours later, a unanimous three-judge panel for the Fourth U.S. Circuit Court of Appeals in Richmond, Va., ruled exactly the opposite in King v. Burwell – that Congress intended to allow subsidies to be provided regardless of whether the exchange was run by the state or the federal government. "It is therefore clear that widely available tax credits are essential to fulfilling the Act’s primary goals and that Congress was aware of their importance when drafting the bill," said Judge Roger Gregory.

Yes, the Obama administration said it will appeal the DC District decision and that it is confident that the ruling will be overturned.

Jonathan Adler, law professor at Case Western Reserve University, disagreed. "The heart of the decision today is a reaffirmation of the principle that the law is what Congress enacts, not what Congress wanted to enact or what some, with the benefit of hindsight, wish Congress had done differently," he said.

No less interesting is that these two decisions were split along party lines, essentially going by which sitting president appointed the various judges. Gee, I thought justice was supposed to be impartial and not influenced by politics. Silly me.

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