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Health Law and Policy Update: Exchange completes hiring executive director, approves grant application

This week's updates

Headlines of the week

Exchange completes hiring executive director, approves grant application
On Monday, Colorado's Health Benefit Exchange Board took the final steps necessary to hire Patty Fontneau, as Executive Director of the Exchange. "I am honored to lead an organization with such an important mission: to increase access, affordability and choice for individuals and businesses purchasing health insurance in Colorado," Fontneau said, according to a report on the Health Policy Solutions website. "Our goal will be to design an exchange that will best meet Colorado's unique needs."

As expected, the Board also adopted a Conflict of Interest policy. CCLP testified in support of the policy at the Board meeting praising the Governance Subcommittee of the Board for their open process and the conflicts policy. The single issue CCLP raised in testimony was whether conflicted board members should be permitted to participate in discussions on matters where they are conflicted. CCLP believes that the conflicts policy would be stronger if board members were required to recuse themselves from the discussion.

As expected, the Board also finalized their draft of the Level I federal grant application. On Thursday, the legislative Health Benefit Exchange Implementation Review Committee approved the application. Officials believe the $18 million federal grant to run the exchange is likely to be approved by February, the Denver Business Journal reported.

Find more information about the exchange on its website, and in previous editions of Health Law and Policy Update.

Department of Health and Human Services Releases Essential Health Benefits Proposal
The Affordable Care Act requires small group and individual health plans, including plans offered through the Health Insurance Exchange, to offer "essential health benefits" that include: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, including behavioral health treatment, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services and chronic disease management, and pediatric services, including oral and vision care. There has been a lot of speculation about the approach that HHS would take in defining standards for the essential health benefits package, particularly since the Institute of Medicine (IOM), which was charged with advising HHS on an approach, came out with a non-specific proposal in October. Many consumer advocacy groups have been very concerned about whether benefits that ensure treatment and services for particular populations will be covered as well as about how much decision making about coverage will be left to states. The concern is that significant state flexibility raises questions about the potential for lack of uniformity across the nation.

Today the Department of Health and Human Services (HHS) released a bulletin outlining proposed policies for essential health benefits. The bulletin is described as a preview of the approach HHS intends to follow in rulemaking on essential health benefits. http://cciio.cms.gov/resources/regulations/index.html#hie Interested parties may submit comments on the approach outlined. Comments are due by Jan 31, 2012 and can be sent to: EssentialHealthBenefits@cms.hhs.gov.

The approach outlined gives states significant flexibility, described as "maximum flexibility to states, employers and issuers" in implementing the essential health benefits requirement of the Affordable Care Act. States will select a benchmark plan comparable to a "typical employer plan". The four benchmark options include:

  1. One of the three largest (by enrollment) small group plans in the state;
  2. One of the three largest (by enrollment) state employee health plans;
  3. One of the three largest federal employee health plan options; or,
  4. The largest HMO plan offered in the state's commercial market.

If a state chooses not to set a benchmark package, HHS will use the largest small group plan in the state as a default.

The benefits and services included in the plan selected by the state would be the essential health benefits package. In addition, according to the bulletin, plans would be permitted to modify coverage within a benefit category so long as they do not reduce the value of coverage. This means that plans have flexibility to adjust benefits including specific services and set other limits, for example visit limits, so long as they cover the ten defined services and meet actuarial value standards. This is something consumer advocates are unlikely to be happy about since plan design and limitations may discourage high needs individuals from enrolling.

If a state selects a benchmark package that does not cover all of the required ten categories of coverage, the benefits must still be covered. HHS is soliciting comments on how states might go about supplementing benchmark coverage.

With respect to current state mandates, during 2014 and 2015, if a state chooses a benchmark plan that is subject to state mandates (for example, a small group market plan), the benchmark plan would include those mandates in the state's essential benefits package. If the state chooses a benchmark plan that does not include the states' benefit mandates, the state must cover the mandates so long so long as those mandates continue to be state law but the cost of that coverage must be paid by the state.

HHS intends to evaluate the benchmark approach in 2016.

For the essential health benefits bulletin, visit: The Centers for Medicare and Medicaid Services.

For a fact sheet on the essential health benefits bulletin, visit: Healthcare.gov.

For a summary of individual market coverage as it relates to essential health benefits, visit: The Department of Health and Human Services.

For information comparing benefits in small group products and state and Federal employee plans, visit: The Department of Health and Human Services.

What's new

Colorado Joint Budget Committee reviews HCPF budget
The Colorado Joint Budget Committee met this week to begin its review of the Department of Health Care Policy and Financing's budget. Look for a CCLP summary of issues raised by the hearing next week.

Family Voices Releases New Resource Directory
Family Voices Colorado has released a new resource directory. The Colorado Resource Directory is a tool designed to help families find assistance and resources. The directory includes a comprehensive guide of family and community services throughout the state of Colorado.

Advancing the debate

Number of uninsured rose sharply during Great Recession
The number of people lacking health insurance nationwide increased by 5.7 million since 2007, according to research issued Thursday by the Kaiser Family Foundation. An issue brief examines changes in health coverage during the past decade, particularly during the Great Recession of 2007 to 2009.

"Coverage, especially for children, through the Medicaid and Children's Health Insurance Programs helped to prevent even more people from being uninsured," the paper reports. "While the number of uninsured children declined in recent years, the number of uninsured adults rose. The only notable drop in uninsured adults was for young adults ages 19-25 in 2010, most likely due to the provision of the Affordable Care Act that permits young adults to stay on their parents' insurance."

2.5 Million young adults gain health coverage
The number of young adults, between 19 and 25, who lack health insurance, has decreased by 2.5 million, according to new survey information released by the Centers for Disease Control and Prevention. The decrease can be attributed to a new provision from the Affordable Care Act, which allows children to remain dependents on their parents' health insurance plans until they turn 26. The ability to remain on their parents' plans is an important protection for many young adults, who might otherwise have gone without health insurance in a difficult job market. The Department of Health and Human Services estimated that almost 36 percent of young adults lacked health insurance prior to the passage of ACA. According to the new report, this number had dropped to just over 27 percent in the second quarter of 2011.

Coverage can be found from the Associated Press and Kaiser Health News.

Health Law and Policy Update is issued weekly by the health staff of the Colorado Center on Law and Policy. Subscribe by e-mail or read previous editions.

Health Care Director
Elisabeth Arenales

Health Care Attorney
Adela Flores-Brennan

Special Counsel
Ed Kahn

Rice Fellow
Danny Rheiner

Communications Director
Perry Swanson

Released Dec. 16, 2011