ACA Marketplace – Executive Digest, 1st Issue

As we move closer to October 1, 2013, CMS will continue to issue more final rules regarding the implementation of the ACA and Insurance Marketplaces. In an effort to assist members, AACHC will provide a monthly summary of some of the issues and rules which may impact your operation.  If you read an article and you want to share with your peers, or if you have an ACA related question please contact Allen at  

In This Issue

  • Question: If an employer offers an employee an affordable health benefit plan, will the employee’s family be eligible for premium tax credits?
  • Question: Will the Federal Insurance Marketplace be ready on October 1?
  • Question: How do FQHCs fit into the new Insurance Marketplace?
  • Emerging Issues: Narrow Networks – In the News
  • Medicaid Expansion Update

Question: If an employer offers an employee an affordable health benefit plan, will the employee’s family be eligible for premium tax credits?
By Nancy Lopez, Posted on February 1, 2013
The IRS answered that question January 30, 2013, when it released its Premium Tax Credit Final Regulations amending 26 CFR Part 1. (The premium tax credit final regulations,[5] published in May 2012, reserved a rule for determining affordability of employer-sponsored coverage for related individuals.)
The final rule amends §1.36B-2(c)(3)(v)(A)(2) to read that an employer sponsored plan will be deemed affordable for a related individual if the portion of the employee’s required contribution for self-only coverage does not exceed 9.5% of household income. As a result, premium subsidies and cost-sharing assistance will not be available to the uninsured spouses and children of employees who have access to affordable self-only coverage but who cannot afford dependent coverage because the premium exceeds 9.5 percent of household income.
As noted previously, the Government Accountability Office has estimated that this interpretation of the ACA would leave an estimated 6.6 % of children uninsured, since they would be ineligible for premium tax credits and cost sharing reduction assistance even when employer-sponsored family coverage is unaffordable.

Question: Will the Federal Insurance Marketplace be ready on October 1?
 Interview with CCIIO Director Gary Cohen
Sara Rosenbaum (SR): In those states not running their own Marketplaces, will the federally-facilitated Marketplace be ready to operate in time for open enrollment on the 1st of October, 2013?
Gary Cohen (GC): Yes, they will. HHS is hard at work now building the infrastructure processes and information technology that’s necessary to support the federally-facilitated Marketplace, and we’ve made great progress. We’re on track so that consumers in every state will have access to affordable high quality coverage through the Marketplace for open enrollment October 1, 2013, and then coverage beginning January 1, 2014.

Question: How do Community Health Centers fit into the Marketplace?
: In the federally-facilitated Marketplaces, you described earlier the kinds of consumer application support that will be available. Looking at what will be the single streamlined online Marketplace application—it’s a significant application. I’m wondering what kinds of outreach will be undertaken by the federal Marketplace to community organizations, advocacy organizations, and community health providers, that will be useful as in-person consumer assistance. For example, there are over 8,000 community health center sites in the country at this point, and I’m wondering what use might be made of those, or head start programs, or other programs that are heavily embedded in the community. Because in a state-based or partnership Marketplace, these places might well be part of a community assistance infrastructure of sorts. How might the federal Marketplace deal with this issue?
GC: You’ve actually answered the question. We plan very much to try to take advantage of all those resources that are out there in the community. The call has gone out to not only to all the sister agencies here at HHS, but really throughout the administration at the cabinet level, to bring together every element of the community as part of what is really a campaign to get the word out to people as to what this law is all about and what it offers them. I think you’ll see really a multi-faceted approach. The part of it that we are most directly responsible for here is the navigator program, and there will be a navigator funding opportunity announcement coming out very soon for grants. What we expect is that the navigator grants will very much be going out to local community organizations like the ones you’ve mentioned. And then there will be a training made available that will really educate those folks as to what they need to do to be able to provide information to consumers in their local communities. We have taken the approach that we want to begin this effort in a timely way in a time when it’s close to when people can actually take action and begin to enroll. It will be building, beginning now and through the spring and into the summer, so people really have all the information and tools that they need for October 1, 2013.
SR: I think the community health centers outlet is probably your most potent outlet. They have over 8,000 sites currently and will probably grow close to 12,000 sites in the next several years. Almost half their patients at this point are uninsured, most of that group is adults, and most sites have significant experience with online application assistance.
GC: I completely agree with you. I’ve been in several meetings with HRSA about making sure we take full advantage of that. For the full interview:  
Emerging Issues: “Narrow Networks” in the News 
From the Wall Street Journal
Hospitals and health insurers are locking horns over how much health-care providers will get paid under new insurance plans that will be sold as the federal health law is rolled out.
The results will play a major role in determining how much insurers will ultimately charge consumers for these policies, which will be offered to individuals through so-called exchanges in each state.
The upshot: Many plans sold on the exchanges will include smaller choices of health-care providers in an effort to bring down premiums.
To keep costs low, the insurers are pressing for hospitals to grant discounts from the rates hospitals usually get in commercial plans. In return, participating hospitals would be part of smaller networks of providers. Hospitals will be paid less by the insurer, but will likely get more patients because those people will have fewer choices. The bet is that many consumers will be willing to accept these narrower networks because it will help keep premiums down.
Tenet Healthcare Corp., THC +2.78% one of the biggest U.S. hospital operators with 49 hospitals, Tuesday said it had signed three contracts for exchange plans that would involve either narrow or “tiered” networks, in which people pay more to go to health-care providers that aren’t in the top tier.
Tenet said that in exchange for favorable status in these plans, it granted discounts of less than 10% to the three insurers, which it said were Blue Cross & Blue Shield plans covering 15 of its hospitals, or around 30%.
Read the full article:
Narrow Networks Found To Yield Substantial Savings
MANAGED CARE February 2012. ©MediMedia USA
An early managed care idea that the marketplace once rejected is now being embraced by employers and offered by health plans.
Joseph Burns, Contributing Editor
In the 2011 movie Moneyball, the general manager of the Oakland A’s is portrayed as one of the smartest executives in baseball. A former player and first-round draft choice, GM Billy Beane pores over player statistics, seeking hidden gems — high-value free agents other teams might overlook but would fit Beane’s idea of low-cost, high-quality players.
For Brett Morris, president of Health Net of Arizona, health care is like baseball, especially when putting together a narrow network of providers. Hospitals and physicians are free agents that health plans add to their teams after carefully scrutinizing their ability to deliver high-value, low-cost care, he says. Since 2006, Health Net has successfully developed such narrow networks in California and now it seeks to replicate that success in Arizona.
Health Net is not alone. Aetna, Harvard Pilgrim Health Care, and Blue Shield of California, among other managed care organizations, also have developed narrow networks in response to demands from employers seeking low-cost options that do not sacrifice quality. Since 2009, a slow economy has fueled much of the desire for these low-cost networks, but other factors are at work as well.
Read More:
Medicaid Expansion Update

Express Your Support: Capitol Times Polls
What should Arizona do with its Medicaid program at the end of the year, when the current AHCCCS agreement with the federal government expires?
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Coverage of Gov. Brewer’s March 5, Medicaid Rally 
Brewer supports expanding the program to cover an estimated 300,000 low-income residents – and accepting nearly $8 million in federal funding to do it. She explained why to a crowd of supporters and protesters at a rally Tuesday at the state capitol. Brewer was flanked by a few dozen medical professionals in white lab coats as she touted the expansion of the program. AHCCCS (pronounced “access”) suffered devastating cuts during recent years, resulting in more than 140,000 patients losing coverage. This plan brings the number back up using funds from the Affordable Care Act. Supporting this federal program is a striking departure for Brewer. Up until January, she harshly criticized it.
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Expansive Thinking – from St. Luke’s Health Initiatives – Thinking Out Loud
New Jersey Governor Chris Christie is in. Florida Governor Rick Scott is too. So far, seven Republican Governors have aligned with Governor Jan Brewer, and today a total of 24 states are publicly declaring steps toward Medicaid expansion. Of course, expansion is formally adopted through legislative process, so there is still much work to do, but one gets the impression that sentiment may be turning toward the practical aspects of offering more cost-effective care to more people in order to stem the rising tide of delayed and costly uncompensated care.
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