States with Republican governors kept up the pressure last week on Washington to give the states greater control over health care under the Patient Protection and Affordable Care Act (PPACA). Twenty-one Republican governors sent a letter to Health and Human Services (HHS) Secretary Kathleen Sebelius asking for greater authority over some provisions of health reform, including the ability to define "essential" health benefits and set minimum criteria for participating in insurance exchanges. They threatened not to run their own state-based exchanges if HHS does not act on their requests. Sebelius quickly responded with her own letter in which she reviewed the various options states have to reduce costs in their Medicaid programs, and she indicated she is continuing to review what authority she may have to "waive the maintenance of effort under current law." Senate bills have already been introduced to address the role of the states in health care reform, which is sure to keep the issue on the front burner. Visit Easy To Insure ME for more infoFederalThe House Committee on Ways & Means held a hearing last week on "The Health Care Law's Impact on Medicare and Its Beneficiaries," featuring testimony from CMS Administrator Donald Berwick, M.D., and CMS Chief Actuary Richard Foster. Berwick testified that the PPACA has had a positive impact on Medicare beneficiaries, noting that beneficiaries now have first-dollar coverage of key preventive benefits, additional assistance with prescription drug costs, and an annual wellness visit with the physician of their choice. In response to concerns noted by several committee members about the impact of funding cuts on Medicare Advantage, Berwick indicated that Medicare Advantage enrollment increased by 6 percent from 2010 to 2011. He suggested that the program is healthy and offers robust choices. Foster's testimony reiterated his prior projection that the PPACA will cause Medicare Advantage enrollment to decline by about 50 percent by 2017 -- from a projected 14.5 million under the pre-PPACA law to 7.3 million under the new law.?? His testimony further explained that Medicare Advantage enrollees will experience "a large increase in out-of-pocket costs" and "less generous benefit packages" because PPACA will reduce rebates to Medicare Advantage plans, with the reduction in rebates reaching $1,500 per beneficiary by 2019.The Administration last week issued favorable guidance with respect to student health coverage that will result in little disruption, if any, to this business until at least the 2012-2013 academic year. This guidance was announced in a Notice of Proposed Rule Making (rather than as an interim final regulation), which fortunately means that the rule is not effective immediately as has been the case with most regulations relating to PPACA reforms. The proposed student health rule would create a special class of individual coverage for student health pursuant to a set of factors, e.g., written contract between school and insurer, coverage only for students and dependents, health status may not be used as a condition of eligibility.?? As Aetna has advocated, the impact would be delayed, as the rule (whenever finalized) would not be effective until policy years beginning on or after January 2012. Until then, student health is not subject to PPACA reforms.?? And, when effective, student health would be excepted from the current guaranteed issue and renewability provisions of PPACA.
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