Health Care and Life Sciences > Health Reform Resource Center
28 Jun '12

Today, led by Chief Justice John Roberts, the Supreme Court upheld the constitutionality of the Affordable Care Act in almost all respects.  While upholding the controversial individual mandate to purchase health insurance, the Court did alter one important aspect of the law, however, in that it limited the government’s ability to withhold all Medicaid funds from a state contingent on the states’ acceptance of the significant Medicaid expansion called for under the Act.  Under the Court’s ruling, a state must be allowed to opt out of the Medicaid expansion without threatening the state’s current Medicaid coverage and federal funding.  The text of the decision can be found here.

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13 Mar '12

On March 12, 2012, the Department of Health and Human Services (HHS) published a final rule that outlines a framework for states to establish Exchanges .  The final rule combines policies from two proposed regulations that were issued last summer, and addresses eligibility and enrollment in Exchanges as well as employer eligibility for the Small Business Health Options Program (SHOP).   According to the final rule, Exchanges will perform a variety of functions, including:

  • certifying health plans as “qualified health plans” in order to be eligible to participate in the Exchanges;
  • operating a website to facilitate consumer comparisons among plans offered in the Exchange;
  • operating a toll-free hotline for consumer support and conducting other consumer outreach and education;
  • determining eligibility for premium tax credits and other reductions in cost-sharing; and
  • facilitating enrollment of consumers in qualified health plans.

The final rule provides minimum standards that health insurers must meet to participate in an Exchange; however, states are given flexibility in determining the number, type and overall requirements for eligible health plans.   HHS will accept further comments on certain sections of the rulemaking, which are issued as an interim final rule, including provisions related to the role of agents and brokers.  Future rulemaking will address other areas related to Exchanges, including standards for issuing exemptions from the individual mandate, the definition of essential health benefits and standards relating to quality.

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26 Aug '11

The Department of Health and Human Services (HHS) recently issued a proposed rule regarding the establishment of non-profit CO-OP insurance plans as required by the Affordable Care Act.  CO-OPs must operate with a strong consumer focus and use profits to lower premiums, improve benefits or improve the quality of care delivered to plan members.  The proposed rule sets forth the eligibility standards to become a CO-OP, stating that health insurance issuers and government entities are not eligible to directly participate in the program.   The proposed rule also provides standards for CO-OP governance and describes loan eligibility criteria  that will help achieve the agency’s goal of having at least one CO-OP in every state.

Organizations seeking to establish a CO-OP are also eligible to apply for a portion of the $3.8 billion in repayable loans available to cover start-up and capitalization costs.  Along with the proposed rule, CMS announced a funding opportunity that provides two types of loan opportunities: 1) joint start-up and solvency loans; or 2) solvency loans only.  Loan recipients will be allowed to draw down funds as they reach “milestones” proposed in their loan application.  HHS anticipates that the first round of loans will be awarded to 51 applicants by January 12, 2012.  All CO-OP loans must be repaid with interest and loan recipients will be subject to audits and reporting requirements.   Start-up loans must be repaid within five years and solvency loans must be repaid within 15 years.

Link to proposed rule.

Link to funding opportunity.

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26 Aug '11

The Department of Health and Human Services and the Department of the Treasury issued three Notices of Proposed Rulemaking (“NPRMs”) on August 12, 2011 on eligibility and enrollment in Insurance Exchanges and the Small Business Health Options Program (“SHOP”), health insurance premium tax credits, and eligibility changes to Medicaid and the Children’s Health Insurance Program (“CHIP”).  

  • The Exchange Functions in the Individual Market: Eligibility Determinations and Exchange Standards for Employers (“Exchange Eligibility and Employers”) NPRM proposes processes for individual enrollment in qualified health plans (“QHPs”) and insurance affordability programs as well as standards for employer participation in SHOP. 
     
  • The Health Insurance Premium Tax Credit (“Tax Credit”) NPRM outlines proposed eligibility standards for the premium tax credits for coverage purchased through the Exchanges (available to taxpayers with household incomes between 100 percent and 400 percent of the Federal Poverty Level (“FPL”) starting in 2014) and explains how such tax credits will be calculated.  
     
  • The Medicaid Program: Eligibility Changes under the Affordable Care Act of 2010 (“Medicaid Eligibility”) NPRM proposes to expand Medicaid  to most adults under  the age of 65 with incomes up to 133 percent of the FPL and consolidate eligibility categories into four groups:  children, pregnant women, parents, and a new adult group.  The NPRM would also increase the Federal Matching Assistance Percentage (“FMAP”) for newly eligible individuals and to states that expanded Medicaid coverage for adults before enactment of the Affordable Care Act. 

Together, the three NPRMs establish coordination across Medicaid, CHIP and the Exchanges and create a system in which Exchanges would conduct eligibility determinations for Medicaid and premium tax credits as well as facilitate enrollment in insurance affordability program.  Comments on all three NPRMs are due by October 31, 2011.

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26 Aug '11

On August 12, 2011, the Department of Health and Human Services (HHS) awarded a total of over $185 million to 13 states and the District of Columbia in Exchange Establishment grants.  States can use the Exchange Establishment grants to develop their Insurance Exchanges and Small Business Health Options Program (“SHOP”) through activities such as conducting background research, consulting with stakeholders, making necessary legislative and regulatory changes, establishing information technology (“IT”) systems, performing oversight, and ensuring program integrity.  States may apply for single (Level One) or multi-year (Level Two) funding through the Exchange Establishment grant process depending on their progress in establishing Exchanges.  All awards in this cycle were single-year grants. 

HHS previously distributed Exchange Establishment grants to three states in May 2011.  Additionally, 49 states and the District of Columbia received Exchange Planning grants in March 2011 to conduct studies on the feasibility of Exchanges and to hold community forums on how Exchanges should be established.  Six states and one multi-state consortium (led by the University of Massachusetts Medical School) received Early Innovator grants to develop model Exchange IT systems.

Additional opportunities to apply for Exchange Establishment grants will be available through June 2012.  Future applications for grants will be accepted quarterly, with the last deadline on June 29, 2012.  Awards will be made approximately 45 days after the application due date.

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11 Jul '11

The U.S. Department of Health and Human Services (HHS) issued two Notices of Proposed Rulemaking (NPRMs) on July 11, 2011 relating to state health insurance exchanges.  Both NPRMs will be published in the Federal Register on July 15, 2011.  Comments on both NPRMs are due by September 26, 2011.

The Patient Protection and Affordable Care Act (PPACA) requires each state to establish by January 2014 an American Health Benefit Exchange and a Small Business Health Options Program (“SHOP”) to facilitate health insurance purchasing by individuals and small employers.  Under PPACA, if a state fails to establish an Exchange and/or a SHOP by January 1, 2014, the Secretary of HHS must establish and operate the Exchange and/or SHIP  in that state.  PPACA provides that each Exchange will:  certify health plans that can offer coverage through the Exchange; assign ratings to each plan based on price and quality; provide consumer information on each plan (including an electronic calculator that consumers can use to assess the cost of coverage); determine eligibility for the Exchange, tax credits and cost-sharing programs, public health coverage programs (including Medicare, Medicaid, and CHIP), and exemptions from the individual mandate; and establish a “Navigator” program to assist consumers in making choices about their health care.

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20 May '11

On May 19, the Department of Health and Human Services (HHS) issued a final regulation implementing section 1003 of the Patient Protection and Affordable Care Act that requires review of certain health insurance premium increases.  Starting September 1, 2011,  premium increases of ten percent or more for non-grandfathered individual and small group health plans must be disclosed and reviewed by relevant officials.  States will primarily have the responsibility for reviewing rate increases and have already been awarded approximately $44 million in grants to obtain the necessary resources to conduct the reviews.  In September 2012, the ten-percent threshold will be replaced by state-specific percentages based on state cost trends.  The final rule also requires insurance companies to provide consumers with information and justifications for the rate increases in order to ensure transparency about consumer costs.  The rule does not provide HHS and states with authority to approve or reject the rate increases, but instead allows officials to enhance transparency in the insurance marketplace.

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28 Dec '10

The Departments of Health and Human Services, the Treasury and Labor (DOL) posted on the DOL website answers to new questions about the Patient Protection and Affordability Act and earlier healthcare legislation.  Previously issued answers are also available on the website.  The new  guidance addresses the design of preventive health care benefits; automatic enrollment in group health plans; notices to participants about material modifications in individual or group plans; coverage of dependent children up to age 26; pre-existing condition exclusions for children in the individual health insurance market; and grandfathered health plans.  The agencies anticipate issuing further guidance in response to stakeholder questions.

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