Friday, November 29, 2013

Fwd: qotd: Never-ending rule making for ACA

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-------- Original Message --------
Subject: qotd: Never-ending rule making for ACA
Date: Fri, 29 Nov 2013 13:05:51 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

Department of Health and Human Services

To be published in Federal Register December 2, 2013

Proposed rule.

Patient Protection and Affordable Care Act; HHS Notice of Benefit and
Payment Parameters for 2015

Executive Summary

Qualified individuals and qualified employers are now able to purchase
private health insurance coverage that begins as early as January 1,
2014, through competitive marketplaces called Affordable Insurance
Exchanges, or "Exchanges" (also called Health Insurance Marketplaces, or
"Marketplaces").1 Individuals who enroll in qualified health plans
(QHPs) through individual market Exchanges may receive premium tax
credits to make health insurance more affordable and financial
assistance to reduce cost sharing for health care services. In 2014, HHS
will also operationalize the premium stabilization programs established
by the Affordable Care Act – the risk adjustment, reinsurance, and risk
corridors programs – which are intended to mitigate the impact of
possible adverse selection and stabilize the price of health insurance
in the individual and small group markets. We believe that these
programs, together with other reforms of the Affordable Care Act, will
make high-quality health insurance affordable and accessible to millions
of Americans.

HHS has previously outlined the major provisions and parameters related
to the advance payments of the premium tax credit, cost-sharing
reductions, and premium stabilization programs. This proposed rule
proposes additional provisions related to the implementation of these
programs. Specifically, we propose certain oversight provisions for the
premium stabilization programs, as well as key payment parameters for
the 2015 benefit year.
The Patient Protection and Affordable Care Act; HHS Notice of Benefit
and Payment Parameters for 2014 final rule (78 FR 15410) (2014 Payment
Notice) finalized the risk adjustment methodology that HHS will use when
it operates risk adjustment on behalf of a State. This proposed rule
proposes minor updates to this risk adjustment methodology for 2014 to
account for certain private market Medicaid expansion plans, and seeks
comment on how to adjust the geographic cost factor in the payment
transfer formula to account for less populous rating areas in future
benefit years. In this proposed rule, we also propose to clarify the
counting methods for determining small group size for participation in
the risk adjustment and risk corridors programs.

Using the methodology set forth in the 2014 Payment Notice for
determining the uniform reinsurance contribution rate and uniform
reinsurance payment parameters, we propose in this rule a 2015 uniform
reinsurance contribution rate of $44 annually per capita, and the 2015
uniform reinsurance payment parameters – a $70,000 attachment point, a
$250,000 reinsurance cap, and a 50 percent coinsurance rate. We also
propose to decrease the attachment point for 2014 from $60,000 to
$45,000. Additionally, in order to maximize the financial effect of the
transitional reinsurance program, we propose that if reinsurance
contributions collected for a benefit year exceed the requests for
reinsurance payments for the benefit year, we would increase the
coinsurance rate on our reinsurance payments, ensuring that all of the
contributions collected for a benefit year are expended for claims for
that benefit year.

We also propose several provisions related to cost sharing. First, we
propose a methodology for estimating average per capita premium and for
calculating the premium adjustment percentage for 2015 which is used to
set the rate of increase for several parameters detailed in the
Affordable Care Act, including the maximum annual limitation on cost
sharing and the maximum annual limitation on deductibles for health
plans in the small group market for 2015. We also propose to set the
same reduced maximum annual limitations on cost sharing for the 2015
benefit year as we established for the 2014 benefit year for
cost-sharing reduction plan variations. Additionally, we are proposing
certain modifications to the methodology for calculating advance
payments for cost-sharing reductions for the 2015 benefit year. We also
propose standards for updating the actuarial value (AV) calculator.

This proposed rule provides for a 2015 Federally-facilitated Exchange
(FFE) user fee rate of 3.5 percent of premium. Additionally, we propose
a user fee adjustment allowance for administrative costs in the 2015
benefit year to reimburse third party administrators that provide
payment for contraceptive services for enrollees in certain self-insured
group health plans that receive an accommodation from the obligation to
cover these services in 2014.

On November 14, 2013, the Federal government announced a policy under
which it will not consider certain non-grandfathered health insurance
coverage in the individual or small group market renewed between January
1, 2014, and October 1, 2014, under certain conditions to be out of
compliance with specified 2014 market rules, and requested that States
adopt a similar non-enforcement policy.

Issuers have set their 2014 premiums for individual and small group
market plans by estimating the health risk of enrollees across all of
their plans in the respective markets, in accordance with the single
risk pool requirement at 45 CFR 156.80. These estimates assumed that
individuals currently enrolled in the transitional plans described above
would participate in the single risk pools applicable to all
non-grandfathered individual and small group plans, respectively (or a
merged risk pool, if required by the State). Individuals who elect to
continue coverage in a transitional plan (forgoing premium tax credits
and cost-sharing reductions that might be available through an Exchange
plan, and the essential health benefits package offered by plans
compliant with the 2014 market rules, and perhaps taking advantage of
the underwritten premiums offered by the transitional plan) may have
lower health risk, on average, than enrollees in individual and small
group plans subject to the 2014 market rules.

If lower health risk individuals remain in a separate risk pool, the
transitional policy could increase an issuer's average expected claims
cost for plans that comply with the 2014 market rules. Because issuers
would have set premiums for QHPs in accordance with 45 CFR 156.80 based
on a risk pool assumed to include the potentially lower health risk
individuals that enroll in the transitional plans, an increase in
expected claims costs could lead to unexpected losses.

To help address the effects of this transitional policy on the risk
pool, we are exploring modifications to a number of programs. We have
outlined various options under consideration throughout this proposed
rule, including adjustments to the reinsurance and risk corridors
programs. We are seeking comment on these proposals, as well as
soliciting suggestions for alternate proposals. As the impact of the
transitional policy becomes clearer, we will determine what, if any,
adjustments are appropriate.

The success of the premium stabilization programs depends on a robust
oversight program. This proposed rule expands on provisions of the
Premium Stabilization Rule (77 FR 17220), the 2014 Payment Notice (78 FR
15410), and the first and second final Program Integrity Rules (78 FR
54070 and 78 FR 65046). In this proposed rule, we propose that HHS may
audit State-operated reinsurance programs, contributing entities, and
issuers of risk adjustment covered plans and reinsurance eligible-plans.
We also clarify participation standards for the risk corridors program,
and outline a proposed process for validating risk corridors data
submissions and enforcing compliance with the provisions of the risk
corridors program.

We also propose several provisions regarding the HHS-operated risk
adjustment data validation process. On June 22, 2013, we issued "The
Affordable Care Act HHS-operated Risk Adjustment Data Validation Process
White Paper" and on June 25, 2013, we held a public meeting to discuss
how to best ensure the accuracy and consistency of the data we will use
when operating the risk adjustment program on behalf of a State. In this
proposed rule, we propose standards for risk adjustment data validation,
including a sampling methodology for the initial validation audit and
detailed audit standards. These proposed standards would be tested for 2
years before they are used as a basis for payment adjustments. This
proposed rule also includes a proposal to implement, over time, the
requirements related to patient safety standards that QHP issuers must
meet, and proposes reducing the time period for which a State electing
to operate an Exchange after 2014 must have in effect an approved, or
conditionally approved, Exchange Blueprint and operational readiness
assessment from at least 12 months to 6.5 months prior to the Exchange's
first effective date of coverage. We also propose provisions related to
the privacy and security of personally identifiable information (PII),
the annual open enrollment period for 2015, the annual limitation on
cost sharing for stand-alone dental plans, and the meaningful difference
standards for QHPs offered through an FFE. We also propose certain
standards for the Small Business Health Options Program (SHOP) and for
composite rating in the small group market.

Proposed rule (255 pages):

Comment: Thousands of pages of rules regarding the Patient Protection
and Affordable Care Act have already been published. This proposed rule,
which updates previous rules, is being published in the Federal Register
to allow a period of comment before the rule becomes final.

As you review these and other rules, it becomes ever more evident that
the process is inordinately complicated for one overriding reason: These
rules are established to try to squeeze private insurers in between
patients and their health care professionals and institutions. They do
not fit.

As an example of how ridiculous the process is, just look at the
proposal for reinsurance payments for 2014. A previous rule set the
attachment point (when reinsurance would begin) at $60,000. This rule
reduces the attachment point to $45,000. Thus, once the insurer reaches
$45,000 in claims for an individual, the insurer is insured for further
losses, though a coinsurance is applied along with a $250,000
reinsurance cap.

With the higher deductibles that characterize these new plans and with a
reinsurance attachment point of $45,000, the private insurer seems to be
much more of a superfluous intermediary that introduces profound
administrative waste. Yet the rule states that "these uniform
reinsurance payment parameters will support the reinsurance program's
goals of promoting nationwide premium stabilization and market
stability." By all means, let's stabilize markets for the benefit of the
private insurers. Forget the turmoil for the rest of us.

Go ahead and read the 255 pages of this rule and then just imagine how
that would extrapolate to the many thousands of pages of other rules
that have been advanced, with more to come. Then tell us why we should
continue with these acrobatic, bureaucratic twists and turns that are
designed merely to keep the private insurers in the action, especially
with all of their waste and unwanted intrusions.

Enough. As those from the right and left are now saying, single payer is
coming. Let's not wait any longer. Let's do it now.

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