November 17, 2014 -- Federal and state health insurance exchange officials said last week that individuals at the opening of the health law's second open enrollment period were able to log on, shop for plans, and complete applications.

A total of 23,000 visitors to the federal website healthcare.gov submitted an application in the first eight hours of the enrollment period, according to the Department of Health and Human Services (HHS).

Last year, only about half a dozen people were able to submit an application on the glitch-filled first day of the open enrollment period. Despite nightmarish technical difficulties at both the federal and state marketplaces, more than 7 million people signed up and pay for health coverage, exceeding Congressional Budget Office projections.

Volume picked up over the weekend. "Yesterday, we had 100,000 folks submit their new applications," HHS Secretary Sylvia Mathews Burwell said on Sunday. "And there were over 500,000 people who logged in effectively yesterday as well. So I think the vast majority of people coming to the site were able to get on and do what they were intending to do."

Over the weekend, more 1 million people visited the site, HHS said.

Massachusetts state officials said that some 5,000 people were able to use the Bay State's portal to enroll in Medicaid, a step that meant their coverage began immediately. "Throughout the entire weekend we saw excellent performance of the system," a state official told a telephone press briefing early last week.

Blue state exchanges performed miserably during the first open enrollment period, despite a strong commitment to the health law from political leaders and millions of dollars in federal grants to get them started. That wasn't the case at the start of year two.

Overall, the Massachusetts Health Insurance Exchange website determined that 11,920 individuals and families were eligible for insurance under the law (PL 111-148, PL 111-152), the state said in a recent press release.

"Over the weekend, the revamped Exchange attracted a total of 57,208 visitors and enrolled 4,948 into immediate ACA-compliant MassHealth [Medicaid] coverage in real-time, a function last year's website was never able to complete," according to the state. "The remaining 6,972 individuals and families were successfully determined eligible for Health Connector insurance plans." Health Connector is the part of the exchange offering private coverage.

Washington State, however, was forced to shut down its exchange shortly after it opened. Its website was taken offline to resolve a problem in which 2015 tax credit amounts were being incorrectly calculated, according to news reports. The site reopened appeared to be operating afternoon a day later.

The opening weekend metrics gave officials something to talk about but did not foretell whether the second enrollment period would prove successful.

To maintain their coverage without interruption, individuals must submit their applications by Dec. 15, which means the volume of renewal applications is likely to expand dramatically. Early February is another key barometer, with open enrollment ending at the middle of the month—three months shorter than the first open enrollment, which lasted six months.

The upbeat talk doesn't mean big technical problems won't yet materialize.

"We think the vast majority were able to" get into their accounts, Burwell said on NBC's "Meet the Press." "Some people forget their user names. Some people are renewing their passwords and other things. If there are any other technical problems, our customer service folks are ready and able to help people. There were over 100,000 calls yesterday."

November 21, 2014 -- The Obama administration will propose on Monday significant changes to a program within the health care law that was intended to increase competition in the new insurance marketplaces by offering coverage sold in multiple states.

The law envisioned the coverage to be offered statewide, with options for both individuals and small businesses. However, the Office of Personnel Management (OPM) in a March 2013 final rule allowed those requirements to be phased in for multistate plans. Now the administration is poised to get rid of the statewide requirement and ask for public comment on when insurance companies should have to offer coverage in the small business market.

The proposed rule also will suggest giving insurers more flexibility in offering benefits by allowing companies to choose the standard that they will follow as a benchmark on a state-by-state basis or letting insurers offer two types of plans, using different benchmarks as a guide for setting benefits, within the same state.

OPM officials said they want to "attract additional issuers" and spur more competition.

So far, about 371,000 individuals have signed up for a multistate plan, according to the proposed rule. Department of Health and Human Services  (HHS) officials have said that almost 7 million people are enrolled in marketplace plans under the health law (PL 111-148, PL 111-152).

This year, the first year that the marketplaces under the health law were open, OPM contracted with insurers to offer more than 150 plan options in 31 states, including the District of Columbia. For the 2015 plan year, the multistate program will expand into five additional states, for a total of 36 states. The program will offer more than 200 different plan choices for individuals to consider.

But supporters of the law had hoped for more robust participation nationwide.

The final rule that was published last year said that OPM would delay the requirement for insurers to offer coverage statewide. Most, but not all, of the multi-state plan options available to consumers this year and next year provide coverage statewide.

Insurers "in particular states have not consistently been able to offer statewide multistate plan coverage," said the rule. "We believe some of the challenges to providing statewide coverage in all states will continue to impede expansion or participation in the program."

Administration officials said they will consider consumers' needs for statewide coverage and insurers' ability to provide it.

The requirement for insurers to offer coverage to both individuals and small businesses has also been delayed. OPM officials suggested that requirement is not practical, noting that "very few" insurers have actually offered small business coverage yet.

The rule also said that OPM may begin collecting the fee from insurers as early as plan year 2015. The fee will fund OPM work on the multistate program. The fee would be "no more than 0.2 percent of premiums," said the proposed rule.

A new multistate program advisory board also is in the works. Some of the members would be representatives of consumers who are enrolled in the plans.

November 21, 2014 -- The House filed its long-awaited lawsuit last week against the Obama administration, asking the federal courts to declare the president acted unconstitutionally and to stop payments to insurance companies under the health care law.

The lawsuit is a Republican response to a series of President Barack Obama's unilateral executive actions that lawmakers say are unconstitutional. It comes the day after Obama further angered Republicans by announcing more immigration executive actions.

"Time after time, the president has chosen to ignore the will of the American people and rewrite federal law on his own without a vote of Congress," House Speaker John A. Boehner said in a statement.

"If this president can get away with making his own laws, future presidents will have the ability to as well," Boehner said. "The House has an obligation to stand up for the Constitution, and that is exactly why we are pursuing this course of action."

The lawsuit, however, faces what could be insurmountable legal barriers, constitutional law experts say. The House will have to demonstrate that the institution has been harmed by Obama's actions, and has little recourse otherwise, according to an analysis by The Heritage Foundation.

The House has other options—like impeachment or a resolution condemning the president—and the federal courts have been reluctant to referee disputes between the other two branches of government.

The lawsuit focuses on two ways the Obama administration implemented the health care law, claiming the House has been injured because the executive branch has, "among other things, usurp[ed] the House's legislative authority."

First, the House challenges how the administration twice waived the health care law's employer mandate and the penalties for companies failing to comply with it.
Second, lawmakers challenge what they call "the unlawful giveaway" of $175 billion over the next 10 fiscal years to insurance companies under a Department of Health and Human Services cost-sharing program, even though Congress has never appropriated funds for the program.

The administration is making Section 1402 Offset Program payments from the same account as Section 1401 Refundable Tax Credit Program payments—something the health care law does not permit, the lawsuit states.

"The Constitution does not permit such a sleight of hand," the lawsuit states. It names as defendants the Department of Health and Human Services and the Department of Treasury, along with the secretaries of those agencies.

The focus on the offset program is a surprising twist to the lawsuit and puts a focus on an unsettled debate about one of the more obscure parts of the health care law—cost-sharing subsidies.

The cost-sharing subsidies from Section 1402 are not the same thing as the health care law's premium tax credits from Section 1401. The tax credits help pay monthly premiums charged by plans in the health insurance marketplaces. The cost-sharing subsidies help pay for such out-of-pocket expenses as deductibles and copays and also are used to lower the total amount someone has to pay for health care in any given year.

If the House can press its case on the merits, there could be an appropriations law dispute about whether the Section 1402 spending is considered discretionary or mandatory under the health care law.

Republicans think that the statute does not have "the right language" to appropriate funds for the cost-sharing reduction payments, said Timothy S. Jost, a law professor at Washington and Lee University who supports the law.

"The position of the Administration apparently has been that this is mandatory spending because it's part of the premium tax credits and that's the way the CBO scored it," Jost said, referring to the Congressional Budget Office. "It's all part of the same package."

The House lawsuit asks the U.S. District Court for the District of Columbia to find the actions unconstitutional. And the House wants the court to stop Treasury Secretary Jacob J. Lew and the Treasury Department from making any additional Section 1402 Offset Program payments to insurers unless and until Congress enacts a law appropriating funds for those payments.

A White House spokesman called the lawsuit "unfortunate" during a press gaggle.

"At a time where we—I think the American people want Washington focused on jobs and the economy, the House Republicans choose to sue us, sue the President for doing his job—and using taxpayer resources at the same time—for a lawsuit that their own Congressional Research Service could not identify any merit for," Principal Deputy Press Secretary Eric Schultz said.

House Minority Leader Nancy Pelosi, D-Calif., in a statement called the lawsuit a "bald-faced attempt to achieve what Republicans have been unable to achieve through the political process."

"The legislative branch cannot sue simply because they disagree with the way a law passed by a different Congress has been implemented," Pelosi said. "It is clear, as one leading legal scholar put it, that this lawsuit is 'an embarrassing loser.'"

The lawsuit does not challenge Obama's immigration action announced last week. Boehner's office told reporters the House might add immigration to the health care lawsuit.

November 21, 2014 – Last week federal officials proposed a rule that would sweeten financial protections for insurers, establish the dates for the next health law open enrollment period, offer consumers a chance to request being auto-renewed into lower-cost insurance plans, and ask insurers to update provider directories every month.

The next open enrollment period would run a shorter period than the one now underway—from Oct. 1, 2015, through Dec. 15, 2015.

Centers for Medicare and Medicaid Services (CMS) officials proposed to give insurers more money for high-cost cases. Instead of paying for half of the costs of cases in 2015 costing $70,000, as they previously suggested, CMS officials proposed to cover half of the costs that are $45,000 or more, under certain guidelines.

The rule also proposed that insurers pay a tax of $27 annually per enrollee in 2016. For that plan year, CMS officials proposed protections including that the administration would pay half of the costs for patients that incur more than $90,000 in costs, up to a cap.

Centers for Medicare and Medicaid Services officials also proposed that insurers pay a user fee that amounts to 3.5 percent of premiums.

Under the proposed rule, officials are considering giving consumers the option of being automatically re-enrolled in a lower if they decide not to remain in their current arrangement.

Responding to concerns about the accuracy of provider directories by plans, CMS officials said that insurers should put on their websites all of the current providers in a directory, without consumers having to create an account or enter a policy number. The rule proposes that the provider directory be updated at least monthly, and CMS is considering ways to make directories available in standard, machine-readable formats.

Patient advocacy groups may be pleased by a provision in the rule that would give patients more tools for requesting coverage of medications that were not included on the plan's formulary. The rule proposes more detailed procedures for the standard exception process, and would add a requirement for an external review of an exception request if the health plan denies the initial request. The rule also would say that cost-sharing for drugs obtained through the exceptions process must count towards the plan's annual limits on cost-sharing.

Consumer groups who have been asking for more information about insurers' requests to raise rates also may be interested in provisions creating a uniform timeline for both individual and small business plans that are offered both inside and out of the marketplaces. The rule's authors said they wanted to further protect consumers against unreasonable rate increases in the individual and small group markets.

The public will have 30 days to comment on the proposal.

November 19, 2014 -- The health law's coverage expansion would be undermined, but not entirely destroyed, if the Supreme Court declares that subsidies intended to help people buy insurance in 37 states are illegal, analysts say.

Such a ruling next year in King v. Burwell would keep the law intact in the 13 states and the District of Columbia that built and operate their own insurance exchange. It could also spur some states that rely on the federal exchange healthcare.gov to build their own online insurance marketplaces, to help eligible residents to qualify for the tax credits that sharply lower premium costs.

The case takes up whether Congress, in drafting the law, intended to limit subsidies to those states that create their own exchanges. Defenders of the law have strenuously rejected the assertion. But "you just have to factor in the possibility" the high court could strike down the subsidies based on the actual text of the law, said Potomac Research analyst Paul Heldman.

"There's a reasonable chance that the court could rule against the administration."

That could touch off bitter battles in Congress and in state legislatures. Almost 5 million Americans receiving subsidies in the states served by healthcare.gov would be shut out. A Kaiser Family Foundation report last week estimated that 13 million Americans who otherwise would get the subsidies in 2016 would be denied them if the King plaintiffs prevail.

That doesn't necessarily spell the demise of exchange-driven coverage expansion, though.

Insurance industry consultant Robert Laszewski said the 13 states fully implementing Obamacare would continue to be able to continue doing so. Coverage expansion could also be restored in other states.

"Obamacare is compartmentalized by state," Laszewski says. "Operationally, there wouldn't be an issue."

That is because each state has its own risk pool that's used to set rates in the individual market. Curtailment of coverage in one state wouldn't dictate what happens in another.

Joseph Antos, a scholar with the right-leaning American Enterprise Institute agrees. "The fact that some states would maintain state exchanges and subsidies and others would not is not a big deal," he said. "It's not a national insurance market."

Antos, who says he thinks a ruling against the Obama administration is very unlikely, noted that when New York imposed unreasonable regulations on insurers, their individual market premiums skyrocketed and all but Blue Cross Blue Shield left. Insurers didn't collapse in any of the surrounding states.

Dan Mendelson, president of the Avalere Health consulting firm, said "the exchanges and Medicaid expansions have a reasonable level of support in many blue states, and I think would be durable facets of the health care landscape even if the Supreme Court rules negatively."

Like Medicaid, exchanges could become more uniform over time. "Before Medicaid was a federal program, it was a patchwork quilt of state programs," Mendelson said. "It wasn't perfect, but was better than nothing."

"As we saw with the Medicaid program after 1995 and the Children's Health Insurance Program after 1997, it often takes a while for some states to opt into programs that have substantial federal funding support and that offer crucial benefits for a potentially large number of state residents," said Ron Pollack, executive director of Families USA.

Pressures could mount in states denied subsidies to set up their own exchanges. Kaiser estimates that in Florida in 2016, 2.5 million residents would be denied subsidies and 1.75 million in Texas.

"The law would continue to work in the states that are running their own exchanges and red state governors and legislatures would be under a lot of political pressure to find a way to keep the subsidies flowing," says Heldman.

States such as Texas and Florida that have Republican governors and legislatures hostile to the health law might continue to resist building their own.

Other Democratic-leaning healthcare.gov states such as Michigan and Illinois could feel pressure to set up exchanges to get subsidies flowing. Kaiser estimates 676,000 Michigan residents and 479,000 Illinois residents would be denied subsidies in 2016.

Meanwhile, lawmakers at the federal and state levels would feel enormous pressure to respond if the Supreme Court strikes down healthcare.gov subsidies.

Without the subsidies, the risk pool in healthcare.gov states would skew toward costly enrollees, driving up premiums that only the very ill would be willing to pay. Not only would millions lose their subsidies, they'd be stuck shopping for insurance on a market where premiums would soar.

"That is not a sustainable political equilibrium," said Michael Cannon of the libertarian Cato Institute, which spearheaded the subsidy challenge.

Negotiations on what to do next could begin when Republicans in the next Congress vote to repeal or weaken parts of the law. "One cannot predict the end of those negotiations," he said.

The safe betting is that Democrats would want to find a way to keep subsidies flowing nationwide while Republicans would target mandates that employers provide and individual carry coverage. The outcome is far from clear.

November 18, 2014 -- People who bought insurance through the marketplaces created last year by the health law, and who then were offered medical coverage through an employer, may feel as if they have more choices than ever before. But the arcane rules about federal subsidies for buying coverage could wind up costing them in the long run.

Under the law, those offered employer-sponsored insurance that meets certain federal requirements are not eligible for subsidies that can be used in insurance marketplaces. Those who accept aid they're not entitled to may wind up having to repay the government when they file their taxes in 2016.

In many cases, workplace insurance will be at least as generous as the plans sold in the marketplaces, noted Lynn Quincy, associate director of health reform policy for Consumers Union, the policy and action division of Consumer Reports. Even if job-based coverage isn't as generous, she said, people shouldn't accept federal subsidies that weren't intended for them.

The details could cause complications for people whose coverage will be renewed in the open enrollment period that started on Nov. 15.

"Clearly, anyone who is cut out of a financially attractive marketplace plan, and has no [Children's Health Insurance Plan] or Medicaid alternative, is going to be mad," Quincy said. "But it may be hard for consumers to understand if they are in this situation."

Especially at risk are workers or their spouses who bought health marketplace plans last year and will re-enroll for 2015 without knowing about possible penalties.

"Is that something that the individual worker is necessarily going to know?" asked Jessica Waltman, senior vice president of government affairs at the National Association of Health Underwriters, which represents insurance agents and brokers. "One of our big concerns is perhaps not. Then someone could be getting a subsidy for more than a year and that's a significant problem."

Some employers that previously didn't sponsor health coverage may begin offering it, because starting in 2015, businesses with 50 or more workers must provide coverage under the law or face fines.

Further complicating matters is the fact that federal officials may renew coverage for ineligible workers because they don't know who works at businesses that offer insurance that meets minimal coverage and affordability standards.

The coverage for everyone who bought a marketplace plan for this year ends on Dec. 31, no matter when in 2014 their insurance started. Consumers have from Nov. 15 until Dec. 15 to go back and shop again, or put in new information about their income and life circumstances to make sure they still qualify for subsidies. But if customers don't return to the website by Dec. 15, then officials will automatically reenroll them for 2015 in the same plan and with the same subsidy.

That automatic renewal brings many dangers, including the possibility that federal officials will authorize subsidies for someone who no longer qualifies or whose subsidy should change.

Employees whose marketplace coverage is renewed could always cancel it if they have other coverage. In that case, they may face the hassle of getting billed for both a marketplace plan and job-related insurance.

"We are definitely on a potential collision course," said Kevin Kuhlman, legislative affairs manager for the National Federation of Independent Business.

Problems would intensify during the tax filing season of 2016. By that spring, employers will for the first time send the IRS information about covered employees. Once workers file their taxes, the agency could match the companies' rosters against information about which taxpayers got marketplace subsidies.

If the IRS has the resources and appetite to ask taxpayers to repay subsidy overpayments, then taxpayers could get IRS letters shortly before the 2016 presidential election.

The agency also could chase taxpayers later.

People who enrolled through healthcare.gov earlier this year and received subsidies cut their premiums by 76 percent on average, said federal officials. The average annual savings was $3,168.

Even consumers aware of penalties may have trouble sorting out if their employer-sponsored coverage disqualifies them from subsidies. An employer-sponsored plan must meet benefit rules and be affordable for the worker. Both are strictly defined and could be confusing.

For instance, "affordable" coverage means that the cost of job-based insurance for an individual worker—not coverage for the worker's family—is no more than 9.5 percent of the entire family's annual income. So an individual whose insurance through an employer costs, say, 10 percent of the family's income could get a subsidy. But the rest of the family would be ineligible.

The government has offered minimal warnings to workers. Last year, the Labor Department ordered companies to give workers a 3-page form outlining their coverage choices. But employers only have to give workers the information once, so now it's voluntary except for new hires, said a Labor Department spokeswoman.

Some companies, but not all, will keep providing the form, said Kulhman.

Steve Wojcik, vice president for public policy for the National Business Group on Health, said large companies hesitate to hand out the form "because this government notice is creating confusion."

The form does not give workers a simple "yes" or "no" answer about whether they qualify for federal marketplace discounts. Some workers could be puzzled by caveats such as, "Even if your employer intends your coverage to be affordable, you may still be eligible for a premium discount."

Many companies will just send employees the IRS forms showing that a worker is covered, Wojcik said.

Even the application for someone seeking coverage does not explicitly warn consumers that they can't get subsidies if their company offers affordable coverage. On the first page of the paper application, the administration urges people to "apply even if you or your child already has health coverage. You could be eligible for lower-cost or free coverage."

Aaron Albright of the Centers for Medicare and Medicaid Services said the system is designed so that "if consumers answer that they have employer coverage, and answer all the subsequent health coverage questions accurately, the system will determine that they aren't eligible for premium tax credits." But the questions are complex.

Albright noted that people who get a job should update their information.