4 Headlines on the Affordable Care Act

As the Affordable Care Act eases closer to approval, these four articles from Health Affairs paint a picture of the pending changes and legal questions.

Health Care Economics 101 And The Supreme Court

The case that will decide the fate of the most important piece of health care legislation in the past fifty years has, perhaps unsurprisingly, broken a number of records.  The Supreme Court allowed six hours of oral argument in the case, the longest since 1967.  Friends of the court also filed a record 152 briefs.  Of these, the two that garnered the most interest from the Justices were drafted by economists, not lawyers.  These briefs, particularly the one favoring the respondents (sponsored by the American Action Forum, the “AAF”), figured prominently in the oral arguments and are likely to show up in the opinion.  But we hope that the Justices won’t repeat the economic and policy misunderstandings, discussed below, that pervade the economists’ brief for the respondents and were reflected in the arguments.

Here we focus on two key misunderstandings from the AAF brief, each repeatedly raised by the conservative Justices.  The first has to do with the uniqueness of health care markets, and the second has to do with the idea that it is unfair to require young adults to buy health insurance that is not a “good deal” for them.

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 Of Coverage Expansion And The Supreme Court

As the nation awaits the Supreme Court ruling on the Affordable Care Act, so do we at Health Affairs wonder what’s in store. Which notion of freedom and liberty will resonate with the nine distinguished justices? On the one hand, there’s today’s “freedom” to go without health insurance and not have to pay a penalty for that dubious privilege. On the other, there’s the freedom described by Solicitor General Donald Verrilli, who outlined the Obama administration’s case for preserving the law in oral arguments before the Court in March.

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Implementing Health Reform: The Minimum Loss Ratio & Summary Of Benefits And Coverage

The two most significant—and controversial–Affordable Care Act (ACA) insurance reforms of 2012 are the minimum medical loss ratio (MLR) rebate and the summary of benefits and coverage (SBC) requirement.  On Friday, May 11, 2012, further regulatory guidance was released on both of these initiatives.

The MLR rebates and the SBC disclosure will be the first concrete experience that millions of Americans will have with the ACA.  The administration continues to work toward ensuring that this experience in fact occurs, and that it will be a positive one.  ACA implementation presses on.

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Implementing Health Reform: State-Based, Partnership, And Federally Facilitated Exchanges

On May 16, 2012, the Department of Health and Human Services moved three steps closer to the implementation of the Affordable Care Act’s health insurance exchanges, which will happen on January 1, 2014.  First, HHS announced the award of 5 new level 1 exchange establishment grants (Illinois, Nevada, Oregon, South Dakota, and Tennessee) and one new level 2 exchange establishment grant (Washington state), totaling $188 million and bringing to 34 the total number of states (plus the District of Columbia) that have received exchange establishment grants.

Second, HHS released a guidance describing in greater detail how the federally facilitated exchange (FFE) will function.  The issuance of this guidance highlights the fact that there will be an operating exchange in every state in 2014, whether it is operated by the federal or by the state government.

Third, HHS issued a Draft Blueprint for Approval of Affordable State-Based and State Partnership Insurance Exchanges, setting out what states will need to do that seek to operate their own exchange or to operate an exchange in partnership with the federal government.  States have until November 16, 2012 to notify HHS whether they want a state exchange, a partnership exchange, or a federally facilitated exchange.

Section 1321 of the ACA asks the states to establish exchanges, but charges HHS with the responsibility to establish exchanges in states that choose not to do so.  The Guidance describes how HHS intends to carry out this responsibility.  Because establishing the FFE is a matter of internal organization, procedure, and policy, HHS does not need to proceed through notice and comment rulemaking, although HHS is requesting comments on the Guidance.  A FFE will be established for each state that HHS determines by January 1, 2013, will not have a state exchange operable by January 1, 2014.

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About thebenefitblog

Eric is a Producer at Lockton Insurance Brokers, Inc., the world’s largest privately held commercial broker. Eric has over 23 years of experience in the insurance industry and has spent the last 11 years with Lockton. Eric specializes in Health & Welfare Benefits, Retirement Planning, and Executive Benefits. Eric's clients utilize his expertise in the areas of Plan Due Diligence, Transaction Structure, Fiduciary Oversight, Investment Design, Compliance and Vendor negotiation to improve the operational & financial outcome for each client. The Benefit Blog is a place to share that expertise and industry news.
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