By Emily Ethridge, CQ Roll Call

February 12, 2014 -- More young people are signing up for coverage in the health insurance marketplaces, as well as more people who qualify for financial assistance for coverage, Health and Human Services (HHS) Secretary Kathleen Sebelius announced last week.

All told, nearly 3.3 million people selected plans in the state and federal marketplaces from Oct. 1 through Jan. 31, HHS said, with 1.1 million enrollments occurring in the month of January.

That January number is lower than the 1.8 million people HHS said enrolled in December, but administration officials emphasized that enrollment grew 53 percent in January over the first three months combined. Officials said they did not have data on how many of those who have selected plans have actually made a premium payment, or how many were previously uninsured or had their previous coverage cancelled because it did not meet the law's (PL 111-148, PL 111-152) requirements.

Officials also said that there is no internal discussion at HHS about extending the deadline to purchase insurance coverage past March 31.

Sebelius said 27 percent of the January enrollments came from young adults ages 18 to 34, which is up 3 percentage points from the previous three-month reporting period. That uptick offers hope to the administration that its outreach to young people is paying off.

Enrollment by healthy young adults is considered crucial for the stability of the new health insurance system, but administration officials rebuffed the idea that they had specific numbers they must reach.

"Every individual who is enrolled in a health plan is a success story," said Julie Bataille, a spokeswoman for the Centers for Medicare and Medicaid Services, on a recent call with reporters.

HHS officials said the numbers were consistent with the expectation that young people would wait until closer to the March 31 enrollment deadline to select a plan.

"We're encouraged by the enrollment numbers that we are releasing today and believe that we will see more enrollments in young people in the weeks to come," said Bataille.

The department said that young adult enrollment in January grew by 65 percent compared to the previous three-month reporting period, while enrollment for all other age groups combined increased by 55 percent.

Some observers say a lack of awareness about the young people is preventing young people from enrolling, even as the administration continues education efforts. A blog post in the journal Health Affairs noted that just 25 percent of young adults with incomes above 138 percent of the federal poverty level, and who are uninsured or have individual coverage, were aware of the marketplaces and subsidies. Just 41 percent were aware of the law's mandate.

The administration noted that 81 percent of young adults chose more pricey silver, gold or platinum plans. "The covered population is getting younger, and much younger Americans are choosing high-quality silver, gold or platinum plans," Sebelius said.

Only 1 percent of all enrollees selected catastrophic plans, but 97 percent of those who did so are young adults, according to the report.

The increased enrollment overall in January also indicates that people are having an easier time navigating the troubled website for the federally run exchange. "The site has supported the demand we've seen from consumers so far," said Bataille, who noted that work on the site continues "24/7."

HHS also found that 82 percent of people who selected a plan are eligible for financial assistance with their coverage, up from 79 percent during the period lasting from Oct. 1 through Dec. 28.

Of the 3.3 million who have selected a plan, 1.4 million did so in a state-based marketplace while 1.9 million did so in the federally facilitated marketplace. More than half—55 percent—of enrollees are women and 45 percent are men, HHS said.

Nearly one-third of the enrollees are age 34 and under, a statistic that includes children, while 25 percent are between the ages of 18 and 34.

In addition, about 3.2 million people have been assessed for their eligibility for Medicaid or the Children's Health Insurance Program through the marketplaces, HHS said.

House Minority Leader Nancy Pelosi, D-Calif, praised the enrollment numbers and called on Republicans to stop trying to repeal the law.

"Young adult enrollment is outpacing all other age groups, as more and more young people discover how the Affordable Care Act gives them coverage that meets their needs and their lifestyle," Pelosi said in a statement. "The Affordable Care Act is delivering on the historic promise of affordable, quality health coverage for all Americans."

But Republicans said the enrollment numbers were still below the administration's earlier goals.

"The Administration is a million short of its own goal for this month, and the young continue to reject ObamaCare," said House Ways and Means Committee Chairman Dave Camp, R-Mich., in a statement. His reference was to enrollment numbers that still fell short of being on pace to reach an earlier goal of enrolling 6 million people by March 31, or about 1 million people a month.

By Rebecca Adams, CQ HealthBeat Associate Editor

February 11, 2014 -- Most employers won't upend their health insurance strategies based on the Obama administration's delays in the employer mandate, according to policy analysts who were evaluating the impacts.

The number of people whose coverage changes because of the delays may be in the range of hundreds of thousands, rather than millions, although it is hard to get a firm estimate.

The postponement of some parts of the mandate announced last week mostly affects the 8 million workers at medium-sized businesses. And while some medium-sized businesses that don't offer coverage now may wait to provide it, others may choose to ignore the delay and start offering it sooner than required.

The administration recently said that companies who have 50 to 99 workers will have an extra year, until 2016, to comply with the law's requirements to offer affordable coverage to workers.

Companies with 100 workers or more will have new leeway in implementing the rule. Changes for those businesses include a requirement that large companies show they covered 70 percent of workers in 2015, rather than the original requirement to cover 95 percent of workers, and more flexibility in counting workers.

The Congressional Budget Office (CBO) said last week in its revision to baseline estimates that a previous delay that the Obama administration made in July would have little net effect on the number of people covered by employer-sponsored insurance and through the new marketplaces.

That's significant because the reprieve in July had more of an impact than the one announced last week. That earlier reprieve affected all companies with 50 or more workers. That includes the approximately 8 million workers at companies with 50 to 99 employees and the 74 million workers at companies with 100 or more staffers.

Last summer, CBO Director Doug Elmendorf said in a letter to House Budget Committee Chairman Paul D. Ryan, R-Wis., that the original delay meant that "roughly 1 million fewer people are expected to be enrolled in employment-based coverage in 2014 than the number projected in CBO's May 2013 baseline, primarily because of the one-year delay in penalties on employers."

Of those 1 million people, about half would be expected to get coverage from the marketplace, Medicaid or other private insurance, while about half would be uninsured.

Now, the scenario has shifted again, though how much is not clear. "For the most part, employers already have a plan to comply with the employer mandate in 2015 especially because it was originally scheduled for 2014," said Tracy Watts, a senior partner at the Mercer consulting firm, which surveys businesses every year about their health insurance coverage. "Most employers are prepared. They've been preparing for a couple of years now."

Urban Institute researcher Linda Blumberg, who modeled the effects of the employer mandate in a paper released last year, said she expects a very small number of workers to get coverage through the marketplaces instead of through their employers because of the delays.

In a paper Blumberg did last year before the first delay was announced in July, she found that 158.3 million people would get coverage through their employers if the health care law was fully implemented in 2013. Without the law's employer mandate, about 158.2 million would get job-related coverage—for a difference of less than 100,000 people.

The Urban Institute model showed that the requirement for most individuals to buy insurance had a more significant impact, so that if it were removed, only about 151.8 million people would get work-related coverage.

And the administration's loosening of the rules doesn't let employers totally off the hook, said Watts and attorney Paul Hamburger at Proskauer Rose in Washington.

An employer who meets the rule's requirement of offering coverage to at least 70 percent of its workers would not have to pay the penalties that are levied on businesses who don't offer insurance to their employees. The law says that if an employer doesn't offer any coverage and an employee gets subsidized coverage through the new marketplaces, the company is supposed to pay $2,000 per worker. The company can subtract the costs of the first 30 workers.

In some cases, the company could still face a different fine in the law. That penalty occurs if an employer's coverage is not affordable or does not cover at least 60 percent of medical costs, and a worker gets subsidized coverage in the marketplace. The fine is whichever is less: $3,000 for every full-time worker getting a subsidy, or $2,000 per full-time worker, minus the first 30 workers.

Coverage is considered affordable if it reimburses, at least 60 percent of medical costs and the cost of single coverage in the employer's cheapest plan does not cost more than 9.5 percent of each employee's household income.

Another reason why many employers' behavior may not change a great deal is because big employers have been offering coverage voluntarily for decades. That's not because they had to do it for legal reasons but because it helps them attract and retain workers.

In Massachusetts, which implemented a smaller-scale version of the law (PL 111-148, PL 111-152), the employer penalties were tiny, said Blumberg. But after the law passed, the number of workers who were covered by job-related insurance rose, in part because more employees accepted coverage from their companies.

"Employers are offering this even without penalties and have been for a long time," she said. "There may be some movement. Some employers may make a different decision than they would, with some increasing offers, some decreasing. On net, though, there's little change."

By Emily Ethridge, CQ Roll Call

February 10, 2014 -- The American Medical Association (AMA) will fully support the bipartisan compromise "doc fix" bill to replace how Medicare pays physicians, but the organization is not yet offering ideas on how to pay for the measure.

In addition, the influential physicians' group is throwing cold water on the idea of a nine-month patch that's currently being floated in Congress.

AMA President Ardis Hoven announced the group's support for the replacement measure in a press call last week, calling the bipartisan deal (HR 4015, S 2000) "landmark legislation that would build a stronger Medicare program."

The group plans to ramp up its advocacy and advertising efforts to encourage lawmakers to pass the deal before the current "doc fix" patch (PL 113-67) expires March 31 and cuts current payment rates by about 24 percent under the sustainable growth rate formula.

Rich Deem, AMA's senior vice president for advocacy, said that grassroots activity is already underway, and the group will supplement it with social media and paid media activities over the next few weeks.

"Decisive congressional action is needed in the next 49 days," said Hoven.

Hoven said the group is "adamantly opposed" to another series of short-term patches, including a possible nine-month patch. Without a patch, lawmakers have a very short period of time to find an offset for the replacement bill and bring the measure to the floors of both chambers.

But Hoven said that more time would not necessarily help lawmakers reach an agreement. "Is it going to make the process any easier? Is it going to answer all the questions?" she asked of passing a short-term patch.

Lawmakers have discussed adding a nine-month payment patch to legislation that would raise the debt ceiling this month, but no decisions have been made.

Although the bipartisan, bicameral group of lawmakers reached an agreement on the policy parameters for their bill, finding agreement on how to pay for the measure is essential to its passage. Lawmakers say they are looking to find about $130 billion in offsets to pay for the replacement bill.

Several provider groups have suggested possible pay-fors, or requested to protect their own members from cuts, but the AMA is not yet giving an opinion on potential offsets.

"Right now we have no ideas what they might be considering," said Hoven. "So I think what we have to do—we have to wait until they present us with a proposal."

The negotiated deal would provide for annual payment updates for physicians of 0.5 percent over five years. Providers could also get bonuses by participating in an improved-quality program in Medicare's traditional fee-for-service system or in alternative payment models.

Hoven said the deal "is a reasonable place to start" but that the AMA would continue to look at the proposal and any suggested changes, and work for improvements.

"I trust the members of Congress to get this right. They have the ability to do it and I am confident that they will make this a priority," Hoven said.

By Rebecca Adams, CQ HealthBeat Associate Editor

February 14, 2014 -- The Obama administration and New York state officials are working on implementing an $8 billion, five-year waiver plan to allow the state to update the health care delivery system and provide more funding for hospitals.

Gov. Andrew M. Cuomo had been pushing since 2012 to get as much as $10 billion in federal money. Federal officials confirmed that they had reached an agreement in principle with the state and will finalize additional details with state officials in the next few weeks.

The waiver will allow the state to shift Medicaid money within the health care system.

"While the state will be reviewing the terms and conditions of this agreement, it is clearly the biggest step forward towards a positive conclusion for our communities, particularly in Brooklyn, that have suffered from diminishing health care services," Cuomo said in a statement.

"Over the last several months we have worked with dedicated leaders in New York on a waiver agreement that represents a significant commitment to improve care delivery in Medicaid that will result in better health outcomes for patients and lower health care costs for the program," said Centers for Medicare and Medicaid Services (CMS) spokeswoman Emma Sandoe. "Today we are pleased to have notified the state that we have reached an agreement in principle. We are encouraged that this agreement is entering the final stages of approval, and we look forward to continuing work with the State to achieve meaningful delivery system reform in New York."

Democratic Sen. Charles E. Schumer said in a statement that "it's not everything New York asked for, but it is a generous amount."

And Rep. Eliot Engel said, "This waiver will help transform New York's vital Medicaid program by giving Governor Cuomo the flexibility to invest in new initiatives that expand access to primary care and enabling health care professionals to provide higher quality care. Hospitals in both the Bronx and Westchester County will benefit from the resources and assistance made available through this waiver. I hope that CMS and the Cuomo Administration will work to finalize the details of this waiver quickly."

By Rebecca Adams, CQ HealthBeat Associate Editor

February 13, 2014 -- The Office of Management and Budget (OMB) is conducting its final review of a long-delayed rule that would allow states to create health insurance programs that are affordable and stable alternatives to marketplace coverage for low-income people.

A year ago, the Centers for Medicare and Medicaid Services announced that officials would delay the creation of the basic health program from 2014 to 2015.

The health care law (PL 111-148, PL 111-152) gives states the option of using federal funds to subsidize insurance coverage for low-income residents who would often qualify to buy coverage through a marketplace plan. The idea behind the program was to reduce the need for low-income consumers to change coverage if their income fluctuates between the thresholds that would qualify them for Medicaid and the marketplaces.

The basic health plan is intended to help those with incomes between the Medicaid-eligibility level of 139 percent of the federal poverty level and 200 percent of the federal poverty level.

The program may offer more affordable out-of-pocket costs for low-income people who enroll than they would face under the marketplace plans.

People who enroll in a state's basic health program also would not have to repay any extra subsidies that they should not have been entitled to receive. Consumers who enroll in marketplace plans do have to pay back any additional money that they should not have gotten when they file their taxes the next year.

States that decide to use this option would receive 95 percent of the amount of the premium tax credits and cost-sharing reductions that would have been provided in the exchange for this group of people.

The OMB is reviewing a final rule on the basic health program as well as a separate methodology. The OMB interagency review is often the last step before a rule is released, although the timing is unpredictable.

The final rule for the basic health program went to OMB for review on Feb. 7. The methodology notice was sent to the OMB analysts on Feb. 11.

The OMB also began looking over a different proposed rule on Feb. 11 that would establish standards for the marketplaces in 2015. That catchall rule is expected to include a range of issues. It appears to be on a slower timetable for release than the basic health program regulations.

By Kerry Young, CQ HealthBeat Associate Editor

February 12, 2014 -- Getting greater acceptance of telehealth services through Medicare could help spur wider use in general of video chats and other forms of remote communication between doctors and their patients, a development that could save money and improve care, said Rep. Gregg Harper, R-Miss.

As of last week, Harper has drawn only 14 cosponsors for his bill (HR 3306) that is intended to create financial incentives for telehealth and includes proposed changes to Medicare. But, the issue is gaining more attention as lawmakers weigh new approaches to designing Medicare payments with an eye toward saving money and improving care, Harper said.

"I really expect a lot of movement over this during the spring," said Harper at a recent meeting of the Alliance for Connected Care at the National Press Club.

At this time, Medicare largely limits its coverage of telehealth services to certain geographic regions, largely rural ones, and the contact must be made from designated centers, according to the newly launched Alliance for Connected Care. Led by former Senate majority leaders Tom Daschle, D-S.D., and Trent Lott, R-Miss., and former Sen. John Breaux, D-La., the new alliance has said that Medicare is lagging not only private insurers in use of telemedicine, but also the Department of Veterans Affairs and state Medicaid programs. With lawmakers looking to move away from the sustainable growth rate model in Medicare's payment to doctors, there's an opportunity to make gains for telehealth, Harper said.

"As Congress evaluates the use of alternative payment models and service delivery methods for Medicare, the time is ripe to grant providers the flexibility to improve telemedicine," said Harper, who serves on the House Energy and Commerce Committee.

His bill so far has drawn five Democratic cosponsors, including Peter Welch of Vermont and Mike Thompson of California.