Feds Looking for Company to Run 'National Data Warehouse' for Obamacare, Medicare

    The Department of Health and Human Services (HHS) is looking for vendors to run its "National Data Warehouse", a database for "capturing, aggregating, and analyzing information" related to beneficiary and customer experiences with Medicare and the federal health insurance Marketplaces. Although the database primarily consists of quality control metrics related to individuals' interactions with customer service, potential contractors are to "[d]emonstrate ... experience with scalability and security in protecting data and information with customer, person-sensitive information including Personal Health Information and Personally Identifiable information (personal health records, etc.)." Vendors are also instructed that one of the requirements of a possible future contract would be "[e]nsuring that all products developed and delivered adhere to Health Insurance Portability and Accountability Act (HIPAA) compliance standards[.]"
    For a number of years, the Centers for Medicare and Medicaid Services (CMS), the division of HHS responsible for Medicare and now Obamacare also, has maintained a "national data warehouse" (NDW) related to the 1-800-MEDICARE helpline. The passage of the Affordable Care Act and subsequent establishment of the Marketplaces has expanded the scope of the NDW. The CMS notice explains the NDW as follows:

The NDW performs a significant role with oversight and monitoring functions under the Virtual Call Center Strategy (VCS) initiative and Medicare Reform legislation. The NDW acts as the central repository for capturing, aggregating, and analyzing information related to the beneficiary experience with Medicare and the consumer experience with Marketplaces. The NDW also serves as a foundation for operational and management reporting to support improved decision-making, business practices, and services to callers. 

    The type of data included in the NDW "includes information for CMS’ Virtual Contact Center operations including, but not necessarily limited to" items such as "Workforce management data", "Quality monitoring", "Medicare disenrollments", "Beneficiary satisfaction surveys", and "Web Chat metrics." The NDW is part of CMS's larger $15 billion "Virtual Data Center" program awarded to multiple vendors in 2012. The eventual vendor for the NDW must be able to integrate and share data with the other Virtual Data Center vendors.
    The description for the "NDW Functional Requirements" included thirty-six items, several with multiple subpoints, and even this list is not meant to be "all inclusive" according to CMS. In addition to these functions, the "contractor shall implement a security program that adheres to CMS security standards." Interested vendors have until January 19, 2015, to respond.

Note: A version of this post first appeared at The Weekly Standard.

Cost of Healthcare.gov Exceeds $2.2B After Latest Contract Award

    With the announcement Monday of a five-year, $563 million contract award to Accenture, the Healthcare.gov contractor that rescued the Obamacare marketplace after 2013's disastrous launch, the total cost of the site will well exceed $2.2 billion. The new award is on top of the $1.7 billion in contracts reported by the inspector general (OIG) of the Department of Health and Human Services (HHS) in August.
    Accenture was first hired in January after HHS replaced CGI Federal, the original contractor. Accenture reported the new award on its website, noting that not only will the company maintain current services, but is expanding its work to include the small business health plans marketplace (SHOP), and will also assist those state-based exchanges that have decided to transition to the federal site:

As the 2014 enrollment period closed successfully with Accenture’s support, work began to prepare for the 2015 enrollment. Accenture focused on simplifying the process for issuers to update plans, and implemented tools and processes to expedite the resolution of citizen inquiries.  At the same time, Accenture worked with CMS to find new ways to streamline and improve the customer experience. CMS later expanded Accenture’s scope of work to include enhancements and additional functionality of the FFM, the SHOP and state-based exchange transitions.  All of these efforts helped create a successful launch of the 2015 Open Enrollment season that continues through February 15, 2015.

     Although the transition from CGI Federal to Accenture appears to have been successful, the government is still struggling with other aspects of the marketplace. Although Hewlett-Packard was selected to replace Verizon (Terremark) in June 2013 as the host for Healthcare.gov, Verizon was awarded an emergency contract just four weeks before the current open enrollment period began, extending its contract into 2015. The new Hewlett-Packard system is acting only as backup system and a "development environment" for the current open enrollment period.


Note: A version of this post first appeared at The Weekly Standard.

Obama to Host 'Off the Record' Obamacare Conference Call With Faith Leaders

    Close on the heels of an Obamacare-related "off the record" conference call hosted by Vice President Biden, President Obama will host one of this own on Monday, March 10 with faith leaders.  According to the announcement, the president "wants to thank all of the faith and community leaders across the country" for their help in enrolling people in Obamacare.  The exact content of the call will not be known, however, because the "call is off the record and not for press purposes."

    The call was announced on the Health and Human Services (HHS) website under the heading "Calling All Faith Leaders!":

Calling All Faith Leaders! Conference Call with President Obama on the Affordable Care Act 

March 10, 2014 | 1:00 PM EST 

Teleconference 

The White House Office of Faith-based and Neighborhood Partnerships invites you to join President Obama for a conference call on Monday, March 10th at 1:30pm ET. 

President Obama wants to thank all of the faith and community leaders across the country who are working hard to help millions of Americans access affordable, quality health coverage. As you know, one of the President’s top priorities is to ensure that Americans get covered by enrolling in the health insurance marketplace before the March 31st deadline, and he looks forward to discussing these issues with you 

Thank you for your work and continued support. Please feel free to share this invitation with other community contacts who would be interested in this work. We hope you will be able to join us. 

*This call is off the record and not for press purposes.

     The call will take place with exactly three weeks remaining in the open enrollment period for obtaining 2014 coverage through the insurance Marketplaces.  HHS recently acknowledged that insurance companies may still offer coverage directly to consumers outside the marketplace after March 31 as long as the policies conform to Affordable Care Act requirements and are available to anyone.  At this point it is unclear whether or not insurers will take advantage of this opening.  Those purchasing individual coverage outside the marketplace after March 31 will not be able to receive subsidies and will likely face a tax for the portion of 2014 in which they were uninsured.


Note: A version of this post first appeared at The Weekly Standard.

HHS Clarifies: Open Enrollment Deadline Applies Only To Obamacare Marketplaces, Not All Private Insurance

    The March 31, 2014 deadline for Obamacare open enrollment has been widely publicized since Healthcare.gov launched in October 2013, but, until recently, information about purchasing coverage outside of the open enrollment period was ambiguous at best.  For most of February, a page on the federal Marketplace website entitled "How can I get coverage outside of open enrollment?" answered the question as follows: "Outside open enrollment, you can enroll in a private insurance plan only if you have certain life events that give you a special enrollment period."  A screenshot of the archived page appears here, emphasis added:

    The statement did not specify where coverage could be purchased outside of the open enrollment period. An email inquiry to the Centers for Medicare and Medicaid Services (CMS) on Wednesday, February 26, seeking clarification elicited the following response on Thursday, February 27, from the agency's press office (emphasis added):

Marketplace plans will not be available until the following enrollment period, unless the person has a qualifying life event. For more information, visit: https://www.healthcare.gov/how-can-i-get-coverage-outside-of-open-enrollment/.

Some insurers off the Marketplace may choose to allow individuals to enroll in a plan at any time provided they comply with new regulations such as not discriminating based a pre-existing condition or current health status. The insurer must also make sure that the plan is available for anyone who may want to purchase it.

    Following the email inquiry, the informational page at Healthcare.gov was updated on February 27, now reading (emphasis added): "Outside open enrollment, you can enroll in Marketplace insurance only if you have certain life events that give you a special enrollment period."  Here is a screenshot of the page as it presently appears:

 
    The original version of the page (first cached on 11/13/13) was different that either of the two versions above:

    The page stayed this way until the week of February 5, 2014, when the second version that was on the site for most of February appeared.
    The application of the open enrollment period inside and outside of the Marketplace has been a source of confusion even to experts in the field.  Kaiser Health News is part of the Henry J. Kaiser Family Foundation, which bills itself as "a leader in health policy analysis, health journalism and communication."  The White House has cited Kaiser's work dozens of times in support of Obamacare. But on November 18, 2013, Kaiser Health News answered readers' questions about the open enrollment period this way (emphasis added):

Q. I know there's an enrollment period for the health law's insurance marketplaces, but people can also buy a policy directly from a company or agent, outside the marketplaces. So will people be able to buy a regular health insurance policy from a company or agent after March? If so, won't people wait until they're sick or injured to buy insurance? 

A. The open enrollment period, when people can buy an individual plan for 2014 directly through the health insurance marketplace or outside it from an insurer or agent, began in October and runs until the end of March.

The law requires that health plans sold either through the marketplace or outside it be comparable in many ways, including the benefits that are covered and consumer cost-sharing requirements, such as the rule that plans pay at least 60 percent of medical costs. In addition, all plans sold on the individual market, whether through the exchange or outside it, must offer open enrollment during the same time period.  

So there's no easy way to game the system by waiting to buy a plan until you get sick. If you skip open enrollment, you've generally missed your chance to buy coverage for the year unless you have a significant change in circumstance, such as losing your job-based insurance. You'll also face a penalty for not having insurance: $95 or 1 percent of your income in 2014, whichever is greater.

    Since the penalty for not having insurance in 2014 is based on lacking coverage for three months or longer during the year, anyone who waits until after March 31 to buy coverage outside the Marketplace will likely incur some penalty, which according to the IRS is "1/12th of the annual payment for each month you (or your dependents) do not have coverage and are not exempt."  Additionally, such individuals will not have access to subsidies as those are available only for policies purchased through the Marketplace.  But the fact remains that even absent the "life events" that are necessary to qualify for Marketplace coverage outside of open enrollment, coverage may be purchased directly from private insurers during that time.  Such offerings, of course, will be up to the individual carriers; CMS's response says that "insurers off the Marketplace may choose to allow" consumers to purchase plans outside of open enrollment, not that they are compelled to do so.
    Obviously it would be in the government's interest for the public to assume that no coverage, either inside or outside the Marketplace, may be purchased between April 1 and November 15 unless there is a qualifying "life event."  But as the recent clarification from CMS spells out, the private insurance market (as opposed to "Marketplace") will remain an option for those who for one reason or another resist Obamacare's deadline.


Note: A version of this post first appeared at The Weekly Standard.

Obamacare Website Encourages the Incarcerated to Enroll in Medicaid

    Nearly five months after the launch of Healthcare.gov, the federal government's flagship Obamacare exchange added a new informational page without fanfare over the weekend aimed at a captive audience: the incarcerated.  The new page is designed to tell those currently serving sentences in prison or jail all they need to know about the Obamacare Marketplace.  Although private insurance may not be purchased through the insurance exchanges by such individuals, the website may be used to apply for Medicaid.  While Medicaid will not pay the cost of care while incarcerated, those seeking coverage are told that signing up now "may help you get needed care more quickly after you’re released."

    The page is entitled "What do incarcerated people need to know about the Marketplace?"  Only those serving sentences upon conviction are considered incarcerated for purposes of the Marketplace, not those locked up pending disposition of charges.  Those on probation, on parole, or in home confinement are not included either.  The medical care of incarcerated individuals is provided by the government institution in whose custody those individuals are held, so Medicaid and private insurance are unnecessary. But those seeking information about Medicaid at Healthcare.gov are encouraged to get a step ahead in preparation for eventual release, as the following partial screenshot shows:

    Incarcerated individuals interested in preemptive enrollment are cautioned that state rules regarding Medicaid may impact their situations:

    Additional information is provided as well:

• Although the incarcerated may not use the Marketplace to buy private insurance, they have 60 days upon release to purchase a plan, even if the time falls outside the normal open enrollment period.
• Those held on charges but not yet convicted may use the Marketplace for private insurance.
• The incarcerated are not subject to the individual mandate and will not have to pay the penalty that "some others without insurance must pay beginning in 2014."

    According to the latest survey by the Bureau of Justice Statistics on Correctional Populations in the United States, there were 2,228,400 persons in the custody of state or federal prisons during 2012.  Many jurisdictions now allow limited, supervised internet access by those in jail or prison.


Note: A version of this post first appeared at The Weekly Standard.

State Department Insures Artwork for $200M

    The Art in Embassies program of the U.S. State Department just turned 50 last year, but its growth in the last decade has been particularly dramatic if the insured value of the artwork is any indication. Although Art in Embassies purchases original works, such as the $1 million sculpture for the new U.S. Embassy in London, much of the artwork on display at various State Department installations throughout the world is in fact borrowed.  In 2002, the State Department maintained a $20 million policy for artwork.  By 2010, it had grown to $65 million.  This year, the agency is looking to renew its current level of coverage, informing interested providers that "[i]nsurance must cover all items in any location in a Department of State facility abroad up to a value of $200,000,000."  Last year, the $200 million policy cost the government $86,932.
    While the policy covers up to $200 million, the latest itemized list of values by location (updated December 2013) totals only a little over $41 million, but the State Department notes the list is not comprehensive.  Dozens of countries are listed, but more than $23 million alone is for artwork in Beijing, China.  The State Department established a permanent collection in 2008 at the US Embassy in Beijing entitled Landscapes of the Mind, which consists of "48 paintings, photographs, sculptures and mixed-media works by 28 prominent American and Chinese artists."
    Additionally, although Italy is not included on the values by location list, the solicitation also seeks "War and Terrorism Coverage for $15 million for Rome, Italy."  That coverage may be intended to cover a permanent display of a significant body of artwork at Villa Taverna in Rome, although an inquiry to the State Department to confirm this has not yet been answered.  The display in Rome includes this untitled 1970 work by artist Cy Twombly:

    While the State Department does not provide a comprehensive list of all covered items, the 2010 solicitation (when the total insured value was $65 million) included a long list of items, artwork and antiques, owned by the State Department.  The items range from $5 million for a "slant-front desk," $470,000 for a "coffee/tea service," and $500,000 for a commemorative painting of the Declaration of Independence, all the way down to $15 for "documents."  The exact locations of the items are not identified, though a considerable number list "storeroom" as where they currently reside.
    Based on the loss history for artwork for the last several years, the State Department is an ideal customer.  Claims range from a high of only $9,089 in 2008 to a low of $0 in 2013 when no claims were made.  Most losses seem to stem from damage during transit to or from State Department facilities, though sometimes improper handling of the artwork while on display has been to blame.
    When asked in December for a response to the latest round of purchases for Art in Embassies, the State Department released the following statement about the program:

The Department of State’s Office of Art in Embassies curates permanent and temporary exhibitions for U.S. embassy and consulate facilities. For the past five decades Art in Embassies has played a leading role in U.S. public diplomacy with a focused mission of cross-cultural dialogue and understanding through the visual arts and artist exchange.  Art in Embassies is a public-private partnership engaging over 20,000 participants globally, including artists, museums, galleries, universities, and private collectors, and encompasses over 200 venues in 189 countries.

Note: A version of this post first appeared at The Weekly Standard. 

Biden to Hold ‘Off the Record’ Obamacare Conference Call

    As the clock ticks down toward the end of Obamacare's first open enrollment period on March 31, the White House continues to invest considerable resources in publicizing the president's signature domestic program.  On Thursday, Vice President Biden will host a 30-minute "off the record" conference call targeted at young people to follow up on last weekend's National Youth Enrollment Day.  

    Wednesday, Kyle Lierman, Associate Director of the White House Office of Public Engagement, sent out email invitations to select recipients who are requested to RSVP, and are asked to "note that this call is off the record and not for press purposes":

    The text of the letter reads in part:

Young Americans Update: Conference Call with Vice President Biden  

Dear Friends:  

As many of you know, last Saturday was National Youth Enrollment Day and young leaders hosted more than 100 events across the country to get the word out about health care enrollment. Volunteers – including many of you – worked that day to make sure that young people across the country know their health care options to get covered by March 31st.  

But we all know that more work needs to be done. That’s why we would like for you to join us on a conference call with Vice President Joe Biden at 4:00 PM EST on Thursday, February 20th. Please note that this call is off the record and not for press purposes.  

In order to receive more information about the call, please submit your RSVP by clicking here.  

Talk to you soon,
Kyle Lierman
Associate Director
White House Office of Public Engagement
Youth@who.eop.gov  

P.S. For those of you I haven’t met yet, I recently took over as the liaison to Young Americans for the Office of Public Engagement. I look forward to working with all of you. 

Note: A version of this post first appeared at The Weekly Standard.

Emergency $8.7M Contract Awarded on Eve of Healthcare.gov Launch

    In a stunning admission, a recently released government document reveals that the original contract for Healthcare.gov contained no "specific concurrent user performance requirement".  The federal government's online marketplace was plagued from the outset, in part due to the lack of ability to handle the amount of traffic to the site.
    Less than a week before the long-anticipated launch of the Obamacare marketplaces, testing revealed that the cloud computing services needed for the operation of Healthcare.gov and the Data Services Hub could only handle 20% of the projected traffic beginning October 1.  The Centers for Medicare and Medicaid Services (CMS) executed an $8.7 million contract modification on September 30 with Terremark Federal Group in an attempt to rectify the situation.  The Justification document for the modification claims that CMS "could not have anticipated the need"  before the testing conducted on September 26, because the original "task order did not have a specific concurrent user performance requirement":

CMS could not have anticipated the need to add these additional services. Previous resource estimates gave CMS reasonable assurance that the capacity procured through this order was sufficient for the expected demands. CMS learned through performance and stress testing conducted on September 26, 2013 that the Terremark cloud would only be able to handle about 10,000 concurrent users. This was far short of the expected peak traffic of 50,000 concurrent users. The task order did not have a specific concurrent user performance requirement. OIS quickly realized that the cloud services would have to be expanded in order to be able to meet the expected user demands. 

    While the documents authorizing the contract modification were signed by those immediately responsible on September 30, months passed before signatures were obtained for those farther up the chain of command.  Some signatures were added throughout November, but the final signature, that of then-Chief Operating Officer Michelle Snyder, was not added until December 18.  Snyder retired at the end of 2013.

    The $8.7 million modification increased the value of the Terremark contract from $37.3 million to $46 million.  CMS believed that without the additional capacity, the "Exchanges would not function as designed and citizens would not be able to comparison shop for affordable health care insurance." Internal emails at CMS from the week preceding the launch revealed the major testing debacle when the system could not even handle 10,000 concurrent users, much less 50,000, but the emails do not appear to directly reference this cloud computing contract modification.  Subsequent events, however, confirmed CMS's fears, although lack of capacity was far from the only problem ultimately faced by the troubled website.


Note: A version of this post first appeared on The Weekly Standard.

Paid Obamacare Enrollment Data Likely Not Released Until February

    The Obama administration has come under fire for weeks now for selectively releasing "enrollment" data for Healthcare.gov and the state exchanges.  The latest figure of 2.1 million was met with skepticism by many observers, even some who are sympathetic to the administration.  Based on previously published guidance for insurers by the Centers for Medicare and Medicaid Services (CMS), however, it is likely any data the administration has on paid enrollments is substantially incomplete.
    On October 3, two days after the launch of Healthcare.gov, CMS published a document called "Federally Facilitated Marketplace Enrollment Operational Policy & Guidance."  The manual begins with a preamble that reads in part:

This draft manual will go into effect with minimal changes as of October 1, 2013. All enrollments made on or after October 1, 2013, must be processed in accordance with these requirements. It is CMS’ intention that this will be a living document, updated regularly, and supported by clarifying bulletins in the interim between updates.

    Although CMS says the manual will be "updated regularly", it appears from the Regulations and Guidance page of CMS's website that the October 3 draft of the manual is the most recent version.  That same page does, however, include various updates relating to the Affordable Care Act, including one just issued on December 31.
    The pertinent guidance relating to the reporting of enrollment data is found in the October 3 draft manual in Section 2.4 Relationship between Premium Payments and the Confirmation/Effectuation 834 Transaction. Some of this guidance is already outdated, such as these statements: "Issuers do not have the ability to grant grace periods for payment of the initial month’s premium" and "...issuers may receive payments the day prior to the enrollee’s coverage effective date."  Once it became clear that January 1 coverage would be jeopardized for many due to problems with the website, CMS worked with insurers to extend payment due dates to January 10 in some cases.  California, which operates its own exchange, extended the payment deadline to January 15.  Several Blue Cross Blue Shield plans, including Illinois and Texas, have extended their deadlines all the way to January 31 according to a Wednesday report from Reuters.
    The portion of the guidance from the October 3 manual that directly impacts the timing of reporting, which technically only applies to the Federally Facilitated Exchanges (FFEs) but practically speaking would affect the state exchanges also, reads as follows [emphasis added]:

For purposes of generating the confirmation transaction, full payment occurs when the issuer receives full payment... of the portion of the premium for which the enrollee is responsible. We realize that some enrollees will wait until just prior to their coverage effective date to make payment, and therefore issuers may receive payments the day prior to the enrollee’s coverage effective date. In such circumstances issuers may not be able to transmit all confirmation transactions prior to the coverage effective date. However, the FFM expects QHP and QDP issuers to send all confirmation transactions by the fifth calendar day of the effective month of coverage. 

    Under the original guidance, this would have meant all insurers would have been required to send confirmations to CMS by January 5.  However, with the payment deadlines extended to as late as January 31, those insurers presumably have until as late as February 5 to transmit the confirmation of paid enrollments for coverage effective January 1 to CMS.  Again, although this guidance applies specifically to FFEs, state exchanges will need to transmit confirmations to CMS as well in order to have tax credit subsidies processed and paid to insurers.  As noted in the guidance, insurers must send confirmations after receiving payment from consumers and not wait for the balance of the payment from ant government subsidy.  It is unclear when and how those subsidies will be remitted to insurers since the "back end" of the system is apparently still under construction.

    February 5 may actually be an optimistic estimate of when complete paid enrollment data will be available.  The following diagram is from a March 2013 version of a CMS document regarding transaction information in the FFEs:

    Although revisions of this process will have changed the information flows illustrated by this diagram, the inclusion of information from state exchanges will certainly not make the accumulation of aggregate enrollment data any simpler.  The public may have to wait until mid-February or later to find out the true Obamacare enrollment as of its January 1, 2014 debut.


Note: A version of this article first appeared at The Weekly Standard.

Healthcare.gov Still Promoting Coverage Effective January 1 [Updated]

    Six days into the new year and fourteen days after the extended December 23 deadline, the federal Obamacare website Healthcare.gov is still holding out hope of coverage beginning January 1 to some consumers.  The notice, which first appeared on December 24 (the unofficial extra-extended deadline), advises consumers who had "problems" with the website to call the Marketplace Call Center which may offer the option of "starting a new application over the phone to get coverage effective on January 1."

    No additional details are given about what type of "problems" might qualify one for the special treatment or what kind of proof might be required from consumers that they experienced a qualifying problem.  Also unclear is how the government could require an insurer to offer coverage retroactive to January 1 to a consumer who began a "new application" almost a week past the effective coverage date.

    A Healthcare.gov chat agent contacted late Sunday night said that the option is no longer available, and that the "earliest your coverage could start now is February," yet the notice has not been removed.  An email to the Health and Human Services press office about the website page offering coverage effective January 1 was not immediately returned.

UPDATE: Some time on Tuesday, the website was updated to remove the above message.  It was replaced with this:

    The change was not notated.

Note: A version of this article (before the update) first appeared at The Weekly Standard.

Three Month Grace Period Mandated for Delinquent Consumers Who Receive Obamacare Subsidies

    Though the Obama administration has been promoting the benefits of Obamacare for several years now, one perk of coverage through the exchanges that has gone largely unnoticed is a mandated three-month grace period for unpaid premiums.  The rule, however, only applies to those receiving subsidies via tax credits advanced to the insurers by the government (§155.430 and §156.270 of the Code of Federal Regulations.)

    Perhaps most notable about the rule is that, as long as a consumer has paid at least one full month's premium during the year, the insurer must continue to pay claims for services rendered during the first month of the grace period after a premium goes unpaid.  Further, even if coverage is eventually terminated, the effective date must be the last day of the first month of the grace period. The consumer thus receives a free month of coverage for which no direct premium was paid.  The insurer is compensated only to the extent of the advance payment of the tax credit for that month.  The tax credits for the second and third months of the grace period, which the insurer is mandated to continue to collect from the government, must be returned to the government if coverage is ultimately cut off.

    Other burdens relative to delinquencies are placed on the insurers as well.  The insurer must notify not only the consumer of past due status, but HHS as well.  Also, while any claims submitted during the second and third month of the aforementioned grace period may be held by the insurer pending payment from the consumer, the insurer is required to notify providers that claims may be ultimately denied if the grace period expires.

    The regulations do not specify a minimum subsidy required for this regulation to take effect, so even a consumer whose subsidy represents only a small portion of the monthly premium may benefit from the extended grace period.  Also not spelled out in the rules is whether the insurer has any legal recourse for the unpaid premium for the month during which coverage was extended.  Nor is it clear if HHS has recourse against the consumer for the tax credit paid to the insurer for that same month.

    The implementation of the advance payments of tax credits to insurers on behalf of consumers is one of the tasks of Obamacare's financial management system, which is still under development as Deputy Chief Information Officer Henry Chao for the Centers for Medicare and Medicaid Services (CMS) told Congress on Tuesday.  Chao testified the system was approximately 60% complete.  However, as we reported on Thursday, the contract for the financial management system was just awarded this past August on a no-bid, emergency basis.  At the time of the award, CMS admitted that its acquisition of "contractor financial services to assist CMS in developing and testing its Marketplace financial activity implementation solution is already minimally two months overdue[.]"  It is not clear if the 60% figure Chao used on Tuesday includes the testing of the system or simply the development phase.

    Less than six weeks remain before the system will need to go live and, among a multitude of other financial tasks, begin remitting funds to insurers on behalf of consumer who purchase coverage through the exchanges.  CMS does not appear to have an alternative if the system is not ready.  In CMS's own words from the August contract award notification, the consequences, "financial and other," of such a failure would be "severe."


Note: A version of this article first appeared at The Weekly Standard.

UPDATE:  After I wrote my article for The Weekly Standard, I found that Reason had already covered this topic earlier in November.

Obamacare Exchange Confirms: 'We Are Required to Respond to Certain Requests from Law Enforcement'

    On October 8, THE WEEKLY STANDARD reported that the privacy policy of the Maryland Health Connection (MHC), the state's Obamacare insurance marketplace, included a statement that the marketplace "may share information provided in your application with the appropriate authorities for law enforcement and audit activities."  An email had been sent to the MHC on October 3 requesting clarification of the policy, and included these inquires: Does that include both federal and state authorities?  What type of information from the application might be of interest to law enforcement and/or state/federal auditors?  However, no response was received, and the story was published.

    A follow up email sent to the MHC a day after the story ran was answered by the MHC with the promise of a response the following day, but none was forthcoming.  A third email sent on Friday, October 11, was finally answered late that evening by Communications Manager Betsy Charlow.  The full response reads as follows:

The Maryland Health Connection Privacy Policy has been developed in compliance with federal regulations codified at 45 C.F.R. § 155.260 and 45 C.F.R. § 155.280 to ensure consumer protections and operations of the insurance marketplace. Like all state agencies, we are required to respond to certain requests from law enforcement.

     The regulations cited by Ms. Charlow, while stating that sharing personally identifiable information is proscribed for reasons "that are not permitted or required by law," do not specifically address what types of law enforcement and/or audit activities might qualify for an exception, nor do the regulations detail who is authorized to make the determination for what qualifies for an exception.


Note: A version of this article first appeared at The Weekly Standard.

Obamacare Website Admits: You May Not Be Able to Keep Your Plan

    On the very day the Obamacare insurance marketplaces opened for business, a new topic appeared on the HealthCare.gov website:

    Although the topic was just added, it is already listed as "most popular":

    The write up on this new topic begins:

Starting 2014, most individual plans must offer new benefits and protections. Some plans will be changed or replaced with plans that offer these protections. 

If this happens, you can choose to buy a plan in the Health Insurance Marketplace instead. If you switch to a Marketplace plan, you may qualify for lower costs based on your income.

    Further down, the post states:

Your plan or choices may change
Given the changes required in 2014, insurance companies offering individual plans have two choices:

• They can make changes to your plan to provide these benefits. If they do, you’ll see these changes to your plan by the time you renew during 2014. For example, if your renewal date is in July 2014, you’ll see the changes no later than July.

• Your insurance company may decide to offer you other individual plans rather than renew the particular plan that you have today.

    While the post says that "insurance companies offering individual plans have two choices," this does not take into account that some insurance companies will simply choose to cancel the plan and not offer any alternatives, as some have already done.
    President Obama and his supporters have been insisting since before the Affordable Care Act was signed into law that if "you like your plan", you can keep it.  Now that the Marketplaces are open, the administration is finally acknowledging that that will not always be the case.
 

Note: A version of this article first appeared at The Weekly Standard under the headline "New Topic on HealthCare.gov: What If My Plan is Not Offered in 2014?" 

To Avoid 'Severe Consequences' From Delays, HHS Awards No-Bid Contract for Marketplace

    In August, the U.S. Department of Health and Human Services' Centers for Medicare and Medicaid Services (HHS/CMS) quietly awarded a $11.6 million contract (maximum) to Novitas Solutions of Camp Hill, PA, already a CMS contractor, for financial management services related to the agency's implementation of the new Health Insurance Marketplace, due to open on October 1.
    The contract was awarded without competition to the firm as "an interim, transitory solution to meet the Agency's immediate and urgent need" because development and testing of the financial management services system "is already minimally two months overdue."  The documents accompanying the contract award notice state the reasons for the no-bid contract in rather dire terms [emphasis added]:

With the impending and mandated October 1, 2013, Marketplace enrollment and January 1, 2014 go-live deadlines nearing, CMS' need for contractor-provided financial management services has reached an unusual and compelling level of urgency. The prospect of a delay in implementing the Marketplace by the operational date of January 1, 2014, even for a few days, would result in severe consequences, financial and other. The effect of those consequences would most importantly be measured by the impact to the estimated millions of Americans and small businesses that have no health care today or access to affordable health care. Furthermore, if payments are not made and debts are not collected, with critical consideration given to timeliness, accuracy and integrity, the Agency's implementation and operation of the Marketplace and the Affordable Care Act will certainly be jeopardized.

    HHS explains in the Justification and Approval document that CMS recently realized that "specialized financial management services and expertise are needed beyond what was initially anticipated and beyond CMS' currently available resources."  The description of the services required include:

• accounting
• printing and mailing
• tracking of accounts receivable and accounts payable
• documenting funds collected by CMS
• data validation
• activity reporting
• debt management functions
• application of receipts to appropriate transactions
• referral of debt to the Department of the Treasury
• specified batch payment functions in HIGLAS [Healthcare Integrated General Ledger Accounting System]
• systems interface testing and support for HIGLAS functionality.

    The agency said the awarding of this contract is a temporary measure and stated its intention for "full and open competition and to award a resulting contract no later than July 2014."  The paperwork approving the awarding of the emergency interim contract was signed by several HHS employees in the chain of command, up to and including CMS Chief Operating Officer A. Michelle Snyder.
    With more than three years having passed since the Affordable Care Act was signed into law, it is unclear why HHS did not recognize this need until less than two months before the launch of the Marketplace.


Note: A version of this article first appeared at The Weekly Standard.

Planned Parenthood: ObamaCare IS Birth Control [SWA]

    Planned Parenthood (PP) has been a vocal advocate for ObamaCare.  A search of PP's website returns dozens of results, and a cursory look reveals that most, if not all, appear to be positive in nature.  The organization even features a special page entitled "What Does Obamacare Mean for Me?" 

    Although Obamacare is billed as comprehensive legislation covering every aspect of healthcare for all, the PP feature on Obamacare seems to have been designed with Sandra Fluke in mind.  In addition to the bold print for "birth control with no co-pay", there are five questions about Obamacare for which PP provides answers.  The fifth question is a very general question that has been of great concern to many ever since Obamacare was first proposed: "I Already Have Health Insurance. Does this Affect Me?"

    The answer, however, is anything but general [emphasis added]:

As part of the Affordable Care Act, health insurance plans must provide birth control with no co-pay. 

The full range of FDA-approved contraceptive methods — like the pill, the ring, and the IUD — may be available to you without a co-pay or other out-of-pocket expenses. The benefit begins at different times for different health care plans. Check with your health insurance company to find out if your plan covers this new benefit. 

The best way to find out whether your plan is covering birth control without a co-pay is to call your insurance company. Check out these tips for talking with your insurance company about covering birth control.

     None of this "can I keep my plan?" or "can I keep my doctor?" nonsense.  "Am I going to get free birth control?" is the burning question.  Apparently Planned Parenthood knows its clientele and just cuts to the chase.  No doubt the secret to its success.

HHS Admits: You Might Not Be Able to Keep Your Doctor Under Obamacare

    As the Affordable Care Act was pushed through Congress in 2010, the Obama administration and its allies were unequivocal in two claims about Obamacare: If you like your doctor and you like your current plan, you can keep them.  HHS Secretary Kathleen Sibelius and then-House Speaker Nancy Pelosi backed the president fully in this regard.  The White House went so far as to post a Health Insurance Reform Reality Check on its website where "Linda Douglass of the White House Office of Health Reform debunks the myth that reform will force you out of your current insurance plan or force you to change doctors."  President Obama upped the ante, putting the promise in the form of a "guarantee":

THE PRESIDENT: Here is a guarantee that I've made. If you have insurance that you like, then you will be able to keep that insurance. If you've got a doctor that you like, you will be able to keep your doctor. Nobody is trying to change what works in the system. We are trying to change what doesn't work in the system.

    While there has been sniping back and forth between the administration and its detractors about the real-world application of the Affordable Care Act since its passage, the new Healthcare.gov website has taken some of the mystery out of the controversy.  And President Obama and his administration do not fare well in this latest "reality check".  Among the questions that HHS recently added to the website: "Can I keep my own doctor?":

    "Depending on the plan you choose in the Marketplace, you may be able to keep your current doctor."  The bottom line is that Obamacare guarantees neither. Doctors may be only available through certain networks, just as in the current system.  And only plans that existed in their current form on March 23, 2010, are even eligible to be "kept." The vast majority of plans will be new, subject to a raft of new regulations, requirements, and restrictions.
    Now that Health and Human Services has confirmed that the suspicions of Obamacare opponents were justified, the Obama administration will have some explaining to do to friends and foes of the law alike. Because now everyone is finding out "what's in it."


Note: A version of this article first appeared at The Weekly Standard.

Aetna Letter Warns "Many People Will Pay More For Health Insurance" Under Obamacare

    Aetna, the third largest provider of medical insurance in the country, has mailed a letter to at least some customers this week warning that the "Affordable Care Act (ACA) is changing health insurance" and that "many people will pay more for their health insurance coverage in 2014 than they do today."  The letter is addressed to those whose plans are "non-grandfathered" under the ACA, as explained in a footnote, but says that customers "may have options that could cost less than the higher-priced 2014 plans":

    The White House website continues to claim that "...a family of four [under the ACA] would save as much as $2,300 on their premiums in 2014 compared to what they would have paid without reform," and that it is a "myth that reform will force you out of your current insurance plan..."  As Aetna notes in the letter, information on plan options will not be available until ACA open enrollment nears, October 1, 2013, giving people three months notice about how much more coverage will cost in the new year.

Note: A version of this article first appeared at The Weekly Standard.

CBO: Uninsured Under Obamacare Never Falls Below 30 Million

    On Monday, CNBC reported on a new survey that found that two-thirds of Americans currently without health insurance don't know if they will purchase coverage by the deadline, the first day of 2014.  The survey was released by InsuranceQuotes.com, a company that offers comparison shopping for insurance, similar to the "marketplaces" envisioned by the Affordable Care Act (ACA).  The results of the survey surprised Laura Adams, senior insurance analyst at the company:

"I was really shocked that 64 percent [of uninsured adults] said they haven't decided if they will purchase insurance by the Jan. 1 deadline," Adams said. "I was definitely surprised by the high number of people who really have no clue what they're going to do next year." 

"We don't want these consumers to miss this key deadline," she said, adding that new heath-care exchanges under Obamacare will begin accepting applications for insurance in less than four months. "They're going to potentially go without health care for the entire year."

    However, for those who have kept up with Congressional Budget Office (CBO) projections on the implementation and progress of ObamaCare over the next decade, the results will not be all that surprising.  On the contrary, the most recent report issued by the CBO in May appears pessimistic by comparison.  Of the 55 million "Uninsured Nonelderly People" the report lists for 2013, only 11 million, or 20%, are projected to obtain insurance during 2014; the number of uninsured falls only to 44 million next year according to the CBO.  This leaves a full 80% uninsured, significantly more than the 67% found by the survey.
    In fact, the CBO projects that under the ACA over the next decade, the number of uninsured will never fall below 30 million.  Here are the year by year projections from the report:

2013 - 55,000,000
2014 - 44,000,000
2015 - 37,000,000
2016 - 31,000,000
2017 - 30,000,000
2018 - 30,000,000
2019 - 30,000,000
2020 - 30,000,000
2021 - 31,000,000
2022 - 31,000,000
2023 - 31,000,000

     Despite the ACA's mix of requirements, mandates, subsidies and penalties, the CBO projects that the law will never be able to decrease the number of uninsured below 11% of the population.  During the decade projected by the CBO, the percentage of uninsured nonelderly persons decreases from 20% in 2013 to 11% by 2016, but then remains there for the rest of the ten year period.  Not everything in the CBO report is similarly static, however.  The "Average Exchange Subsidy per Subsidized Enrollee" increases 50% over the same time period, rising from $5,290 in 2014 to $7,900 in 2023.


Note: This article first appeared at The Weekly Standard.

Another IRS Scandal: Two ‘Sentenced for Unemployment Insurance Fraud’

    Congressional hearings over the last two weeks have been filled with stories of misconduct due to incompetence and inexperience among certain IRS employees.  Both Republicans and Democrats have leveled the accusations, and Internal Revenue officials testifying before Congress have admitted as much.  At the same time, all parties have stressed that the vast majority of IRS employees are hard-working, competent, and honest civil servants.

    This story isn't about them either.

    The Indiana Department of Workforce Development just announced the sentencing of two former IRS employees for unemployment insurance fraud.  Seven other former IRS employees have already been convicted and sentenced as a result of the investigation:

INDIANAPOLIS  – Over the past week two former United States Internal Revenue Service (IRS) employees have been sentenced for unemployment insurance fraud. Carmen Brown, also known as Carmen Smith, 41, of Indianapolis, and Terri Wardell, 48, of Fishers, both pled guilty to unemployment insurance fraud. The two filed for and received unemployment insurance benefits while working full-time for the IRS. Smith illegally received nearly $14,000 in benefits. Wardell fraudulently collected over $18,000... 

“It does not matter who you are or who you work for, we work diligently to make sure those who take funds they are not eligible for, are held accountable”, said Scott B. Sanders, Commissioner of the Indiana Department of Workforce Development. “These funds are for Hoosiers truly in need and we take our job safeguarding these funds very seriously.” 

    The IRS detected the original signs of fraud and reported the information to the DWD who then pursued the investigation resulting in these convictions.


Note: This article first appeared at The Weekly Standard.

CBO on ObamaCare: Uninsured Remain Above 30 Million Through 2023

    When the most recent Congressional Budget Office (CBO) report on the Affordable Care Act came out last week, most media outlets, particularly conservative ones like the Washington Examiner, focused on the doubling of the costs of the program since it was first scored in 2010.  Philip Klein writes:

When President Obama was selling his health care legislation to Congress, he declared that “the plan I’m proposing will cost around $900 billion over 10 years.” But with the law’s major provisions set to kick in next year, a new analysis by the Congressional Budget Office projects that the law will cost double that, or $1.8 trillion. 

    While the cost increase is certainly noteworthy and was predicted by the opponents of the legislation, the CBO report includes a second aspect of the effects of ObamaCare, or perhaps more appropriately the lack of effect.  Besides the promise that ObamaCare would help control costs, the elimination of barriers to obtaining health insurance to the current uninsured was one of its largest selling points.  It is interesting to note then that under CBO projections, the number of uninsured in the country never drops below 30 million.  Under the heading "Uninsured Under the Affordable Care Act", here are the projections for next decade for "Number of Uninsured Nonelderly People":

2013 - 55,000,000
2014 - 44,000,000
2015 - 37,000,000
2016 - 31,000,000
2017 - 30,000,000
2018 - 30,000,000
2019 - 30,000,000
2020 - 30,000,000
2021 - 31,000,000
2022 - 31,000,000
2023 - 31,000,000

    Also according to CBO projections, this level of uninsured persons persists despite the increase of those on Medicaid and CHIP (Children's Health Insurance Program) from 36,000,000 in 2013 to 47,000,000 in 2023.  Not even the heavily subsidized exchanges will apparently be able to shrink the uninsured population. By 2023, the number of subsidized exchange enrollees is projected at 20,000,000 with an average subsidy of $7,900 for a total of $158 billion.
    It is unclear from the CBO report exactly who these continued uninsured are and how they will obtain healthcare.  But assuming the CBO's projections are accurate, it seems fair to speculate that when the number of uninsured plateaus at 30,000,000 for several years or even begins to increase again, calls will begin afresh for healthcare reform that will provide insurance to those chronically uninsured.  And if ObamaCare's detractors are correct that the law will not lower costs and improve healthcare in the ways promised, the same reasons may be resurrected to push for ObamaCare II: the uninsured clogging emergency rooms, neglecting preventive care, and driving up costs for the rest who are "playing by the rules."
    The reviews coming in so far on ObamaCare are decidedly mixed, and full implementation is still seven months off.  It will be years before the story plays out.  If the Democrats still control the White House after 2016, those uninsured will be on display as 30,000,000 reasons to "finish what we started."  And as everyone knows, the sequel is never as good as the original.