FEHBlog

The FEHBlog nearly fell off his chair when he read this morning that the omnibus appropriations / tax extenders package also places a one year moratorium on the onerous health insurer tax for 2017.  The Affordable Care Act is a large scale income redistribution scheme. One of its craziest features was to impose a massive tax on health insurers which principally raises premiums for small business, people buying coverage in the exchanges and FEHBP enrollees.   Prof. Timothy Jost provides a more detailed review of the ACA provisions of the package here.

Today, the House approved the tax extenders bill on a bipartisan vote as the Hill reports.  Tomorrow, the House takes up the omnibus appropriations bill and send the package over to the Senate which is expected to pass the package right away so Congress can head home. The omnibus appropriations bill includes the protections for September 11, 2001, first responders which the third piece of must pass legislation for this month.

Yesterday, the Internal Revenue Service released more ACA guidance which really does not impact the FEHBP.  Prof. Jost review the Service’s actions here.

The omnibus appropriations and tax extenders bills are moving forward in Congress. The package does include the two year delay in the effective date of the ACA’s 40% excise tax on high cost employer sponsored coverage (from 2018 to 2020).  The first vote is expected in the House of Representatives on Friday.

Govexec.com reports that the package does not upset the 1.3% raise that federal employee and military service members expect for 2016.

The package also includes cybersecurity provisions intended to advance the following policies

• Promote responsible and voluntary information about cyberthreats
• Protect privacy by requiring companies to remove any personally identifiable information before sharing
• Provide liability protections to companies that share information in a responsible manner
• Establish the Department of Homeland security as the sole portal for companies to share information with the federal government, stopping unnecessary confusion.

About eight years ago, the FEHBlog attended a NASCAR race in Richmond Virginia. Dale Earnhardt Jr was driving a beautiful car with an etching of Elvis on the hood.  That is the essence of America. In any event, I learned from another race fan that this was the last race before the championship series and the only way that Junior could make the chase would be for him to place at least third and for two other drivers did not finish. Toward the end of the race, Junior was in third place and the two other drivers were in the pits with engine problems.  Junior’s fan in my section screamed, “It’s happening” and Junior promptly crashed.  The other two drivers wound up finishing. In other words, it’s not over until it’s over.

That lesson came to mind this morning when the FEHBlog read the Hill’s headline that Congress is on the verge of delaying the 40% excise tax on high cost employer sponsored health plans for two years (from 2018 to 2020).  The reports notes significantly that

The White House has opposed repealing the tax, but officials have signaled that President Obama would not veto the package over a two-year delay.

A two year delay would be a big relief for FEHBP carriers and other employer group health plan sponsors and insurers.

Here’s a link to the latest Hill article on the appropriations and tax extender bill negotiations. “Negotiators were settling the final details of the deal late Tuesday, setting up a House vote as soon as Thursday.”  The whole enchilada should be wrapped up this week. Congress likely will need another brief extension of the continuing resolution funding the federal government in order to complete its work.

The FEHBlog noticed this Tammy Flanagan article about an unscientific but interesting FEHBP experiment which is an appropriate link for the last day of Open Season. The FEHBP remains competitive.

The Federal Benefits Open Season ends tomorrow. Also coming down to the wire is Congressional action on federal appropriations and tax extenders (as well as financial assistance for first responders to the September 11, 2001, tragedy).  Fox News offers a comprehensive overview of the upcoming busy week on Capitol Hill while the Week in Congress reviews the last week’s actions.  The FEHBlog will be keeping an eye out for the possible two year extension of the effective date for the 40% excise tax on high cost employer sponsored health benefits coverage (from 2018 to 2020).  Fox explains that the House version of the must pass bills will be posted tomorrow.

The FEHBlog noticed that the OPM Inspector General has posted his semi annual report to Congress for the period ended September 30, 2015 together with the agency’s management response. Always interesting reading.

In other OPM news, Kaiser Health News reports on the status of the multi-state program that OPM operates in the ACA healthcare exchanges and Federal News Radio reports that

A former federal counterintelligence official [Doug Thomas] says the White House is poised to stand up a new agency that will own the federal security clearance process. The formation of a new organization, the National Investigative Service Agency, would move ownership of the security clearance process away from the Office of Personnel Management, which assumed oversight of the program from the Defense Department in 2004.

Drug Channels provides five prescription drug benefit takeaways from the recently issued CMS report on U.S. healthcare spending for 2014.  The fifth takeaway surprised the FEHBlog because it contrasts with the report’s general view that prescription drug costs are rising sharply:

In 2014, consumers’ out-of-pocket expenses—cash-pay prescriptions plus copayments and coinsurance—grew by $1.2 billion, from $43.5 billion in 2013 to $44.7 billion in 2014. However, consumers’ share of outpatient prescription drug expenditures expenses shrank, from 16.4% in 2013 to a historically low 15.0% in 2014. The consumer’s share is predicted to keep dropping, as [Drug Channels] explain[s] in Here’s Who Will Pay For Prescription Drugs in 2024.

Congress has extended the continuing resolution funding the federal government through next Wednesday December 16 according to the AP. The Wall Street Journal reports that Congress continues to consider a two year delay (from 2018 to 2020) in implementing the 40% excise tax on high cost employer sponsored coverage as part of these appropriations and tax extender negotiations. A United Benefit Advisors survey projects that 74% of employers will be impacted by this excise tax by 2022.  

CMS has announced that more quality data has been added to the Hospital Compare and Physician Compare websites.

Reuters reports on a Senate Special Committee on Aging hearing on drug price gouging held earlier this week.

The Federal Benefits Open Season’s last day is this coming Monday December 14.

Congressional leadership continues to make progress on the must pass omnibus appropriations and tax extenders bills according to the Hill.  Congress is likely to enact a brief extension of the current continuing resolution funding the federal government, which expires on Friday, in order to wrap up its work next week.  Happily, the Hill reports that “Senate negotiators are ready to sign off on a major tax deal that would include a two-year moratorium on two unpopular ObamaCare taxes, the Cadillac tax on expensive plans and the medical device tax.” That outcome would push back the Cadillac tax effective date from 2018 until 2020.

It’s a misnomer to say that it’s a tax on expensive plans because all robust health plans are expensive.  The Cadillac tax is a screwy Affordable Care Act provision that will impose significant burdens on insurers and employers.  No word on the tax extended initiative to repeal the health insurer tax, which only serves to push premiums closer to the Cadillac tax thresholds.

PriceWaterhouseCoopers issued a report today on the top health industry trends for 2016. One of those trends is increase attention on prescription drug pricing. The Wall Street Journal published an intriguing report today on how Pfizer priced a new cancer drug.

The Hill reports that as part of a must pass tax extenders bill, Congress is giving serious consideration to delaying for two years (until 2020) the 40% excise tax on high cost employer sponsored health benefits coverage and repeal of the onerous health insurer tax in 2018.  The AP reports on continuing negotiations over the FY 2016 omnibus appropriations bill to fund the federal government past December 11.  A partial government shutdown remains unlikely.  The FEHBlog will keep tracking these developments over the course of this week.

The Week in Congress discusses last week’s activities on Capitol Hill which included Senate passage of a bill to substantially repeal the Affordable Care Act.  This will be the first time that an ACA repeal bill actually reaches the President’s desk (for a veto).  The intriguing angle is the Hill report that as part of this process the Senate voted 90-10 to approve an amendment to this bill that would repeal the 40% excise tax on high cost employer sponsored health coverage.

Yesterday, the Centers for Medicare and Medicaid Services released their report on U.S. healthcare expenditures in 2014. Cost curve up.

Stars and Stripes reports on a Congressional hearing about TRICARE which provides health benefits to military family members and retirees. The report caught the FEHBlog’s eye because a blue ribbon panel had recommended replacing TRICARE with a program similar to the FEHBP.  The article indicates that Congress is more likely to seek to fix and not scrap TRICARE. Attention appears to be focusing on “a blended system that would direct more [TRICARE] beneficiaries to base hospitals, rely more on clinics in places with smaller military populations, and offer guard and reserve troops insurance plans like ones offered to federal workers.

Healthcare Data Management reports on findings stemming from a mock cyberattack involving twelve insurers conducted this past summer.

Identification and response gaps by the health plans during the attacks were revealing. Some of the plans, Gelinne said, did not even know who had authority to order taking down the claims processing system during the attack. That’s one reason it is important to establish formal integrated cyber response plans across the organization, he added. “It truly is a team sport.”
Other findings included: 

* As the attack unfolded, HITRUST shared intelligence with the plans, but participants—who were to share information such as threat indicators among themselves and with HITRUST—were reluctant to do so. That aligns with a recent HITRUST survey that found 85 percent of organizations use their own threat indicators but only five percent share the data.

* Participants were uncertain about how to quantify losses and submit insurance claims, and what to expect after reporting an attack. “Each insurer is likely to have distinct processes,” according to information from HITRUST. “Incident response plans should include information on how to engage insurers.”

* Only two of the 12 health plans referenced their organization’s incident response plan while responding to the attack. “While the pace of a live situation may make strict adherence to documented plans impractical, having ready access to key information and adhering to roles and responsibilities defined in the plan can improve efficiency,” according to HITRUST.

* Organizations need to bring in law enforcement at the appropriate time; several health plans engaged police before evidence of a crime had been established. “Law enforcement can aid in compiling and preserving evidence, but acting too soon may distract efforts from aspects of the investigation and recovery process,” HITRUST cautioned.

A valuable drill.