FEHBlog

OPM updated its healthcare reform web page today, reiterating its assurance that the agency is working to implement the new law (and I know that to be true.)  Sen. Ben Cardin (D MD) has introduced a Senate companion to the House bill (HR 5200) which would conform the FEHB Act’s dependent eligibility provisions to the health care reform law effective January 1, 2011 (increasing the dependent child age ceiling from 22 to 26 and removing the marriage cut off).  The bill also would authorize the OPM Director to accelerate the change into this year.

I was surprised by the statement in Sen. Cardin’s press release that “The non-partisan Congressional Budget Office has confirmed that this bill has no cost associated with it.” This conflicts with HHS’s projection that the dependent child expansion will increase premiums by seven tenths of a percent on average as discussed in a previous entry.There is no such thing as a free lunch.

The Washington Post reports on the Justice Department’s first opportunity to file a brief opposing one of the lawsuits challenging the Constitutionality of the health care reform law. This brief was filed in an action brought by a advocacy group in Michigan, not one of the lawsuits brought by the States.  On a related note, the Post also reports that

President Obama‘s new health-care law could potentially add at least $115 billion more to government health care spending over the next 10 years, if Congress approves all the additional spending called for in the legislation, congressional budget referees said Tuesday.

That would push the 10-year cost of the overhaul above $1 trillion — an unofficial limit the Obama administration set early on.

As OPM’s call letter for 2011 benefit and rate proposals calls for FEHB plan assistance with the First Lady’s initiative to control childhood obesity, it’s worth pointing out the Task Force’s first report.

Under the health care reform law, HHS is required to issue a regulation implementing the provision that extends dependent coverage to children up to age 26 regardless of marital status.  The HHS interim final rule, fact sheet, and frequently asked questions were issued today. As I anticipated, HHS took the most expansive approach to implementing this law. Under the regulations, the only permissible basis for dependent child coverage is the existence of a family relationship — financial dependency and residency with the enrollee are no longer required.

Modern Healthcare notes that  “According to HHS, the new benefit will cost $3,380 for each dependent, which will raise premiums by 0.7% in 2011 for employer plans. Premiums are also expected to rise by 1% and 1.2%, respectively in 2012 and 2013, although HHS expects the actual increase across the entire individual market will be smaller than these estimates.”  That’s likely on the low side for the FEHB Program which is an older group with (I expect) more adult children than the typical employer group.

The interim final rule requires a special open season for re-enrollment of the adult children, which may be combined with the general Open Season. That ball is in OPM’s court.

These changes take effect on January 1, 2011, absent Congressional action. Interestingly, Federal News Radio columnist Mike Causey described Congressman Van Hollen’s bill that would permit OPM to accelerate this change as a “long shot.” OPM has explained the available options for coverage until then.

Last Monday May 3 was the deadline for submission of public comments on one of the most flawed federal regulations ever issued, the interim final rule implementing the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 “MHPAEA”).  This law became applicable to the FEHB Program on January 1, 2010, and OPM did a good job implementing it with its 2010 call letter guidance. The agencies that produced this rule threw a monkey wrench into the works with a rule that does not produce parity and goes far beyond the the terms of the statute.  For more details, I direct your attention to the comments of the Blue Cross Blue Shield Association, United Health Group, and the National Association of Health Underwriters.

I have mentioned that a group of managed behavioral health organizations called the Coalition for Parity has filed a lawsuit alleging that the government violated the Administrative Procedure Act by issuing the MHPAEA rule in final form rather than following the normal path of issuing a proposed rule for comment. On May 3, the Government filed its brief in opposition to the Coalition’s summary judgment motion, and on May 7, the Coalition filed its reply brief. The case is now teed up for U.S. District Judge Colleen Kollar Kotelly who may decide to hear oral argument before issuing a ruling.

Following up on Sunday’s post, the House Oversight and Government Reform Committee held a business meeting today, and the FEHBP PBM transparency and price setting bill (HR 4489) was not considered. 

Also, as mentioned on Sunday, the Senate Homeland Security and Governmental Affairs subcommittee on federal workforce management held a hearing about federal work-life programs on Tuesday May 4.   Mr. Jonathan Foley, who testified on OPM’s behalf, provided an in-depth description of OPM’s federal workforce wellness initiatives.

Today, the House Energy and Commerce Health Subcommittee held a hearing on trio of health care transparency bills.  I found Harvard Professor Regina Herzlinger’s testimony to be thought provoking. Modern Healthcare reports that Subcommittee Chair Frank Pallone (D NJ) “said he would not commit to advancing legislation that requires providers, payers and vendors to publicly disclose the cost of their services.”

PPACA or the Affordable Care Act, of course, is the health care reform law that Congress passed in March 2010. Today, I discovered a consolidated version of PPACA that puts all of the pieces — the original Senate bill, the Senate amendments, and the reconciliation bill (HCERA) together for ease of reference.

Congressman Chris Van Hollen (D Maryland) introduced a bill today that would amend the FEHB Act so that it conforms with the dependent child eligibility provision in PPACA (Sec. 1001 creating Public Health Service Act Section 2714 — try out the consolidated PPACA).  In other words, the bill would increase the FEHB Act’s dependent children age ceiling from 22 to 26 and it would remove the current FEHB Act provision that terminates coverage if a dependent child marries. The effective date for the change is January 1, 2011, but the bill would allow the OPM Director to accelerate the changes into this year presumably by regulation.

HHS issued today an interim final rule creating PPACA’s Early Retiree Insurance Program effective June 1, 2010. Business Insurance explains that “Under a $5 billion program—authorized by the new health care reform law—employers with health care plans covering retirees from age 55 through 64 will be reimbursed for 80% of such retirees’ claims between $15,000 and $90,000. The HHS rule, however, excludes expressly FEHB plans from participation in the Program, notwithstanding the fact that FEHB plans are employer sponsored, cover millions of early retirees, and are underwritten by private sector carriers, not the federal government.

Businessweek reported yesterday that

The U.S. Chamber of Commerce and 12 other business groups asked members of President Obama’s cabinet * * * for more leeway in implementing the health-care overhaul.

The groups said they’re being forced to make contract, employee-benefit and other decisions without guidance on how to comply with provisions that take effect in September. The letter dated April 30 was sent to {Treasury Secretary Timothy} Geithner, Health and Human Services Secretary Kathleen Sebelius and Labor Secretary Hilda Solis.

The groups, which include the Blue Cross and Blue Shield Association, the National Retail Federation and the American Benefits Council, requested at least six months to comply with the regulations once they are implemented, and a “good-faith” standard for measuring compliance.

I also discovered today that Senator Tom Coburn (R OK) has created a web page with links to all of the Congressional Research Service reports on PPACA’s impact.

In Sunday’s post, I noted that the House Oversight and Government Reform Committee will be holding a business meeting on May 6 at noon to mark up HR 626. I somehow mis-clicked on their calendar because it hit me today that the House passed HR 626 last summer. So I wound up informing you about a meeting that was held last year. The Committee’s May 2010 business meeting will be held on May 6 at 10 am. The agenda has not yet been posted.

On May 4, 2010, at 2:30 pm, the Senate federal workforce subcommittee will hold a hearing on work life programs for federal employees. On May 6, at 12 noon, the House Oversight and Government Reform Committee will hold a business meeting. The Committee will be marking up the the Federal Employees Paid Parental Leave Act (H.R. 626), but not the FEHBP prescription drug transparency and pricing bill (HR 4489) which cleared the subcommittee on March 24, 2010.

I subscribe to the AMA News. I ran across a couple of interesting articles in recent issues. The first discusses how patient safety and quality experts are hoping that PPACA delivers substantial improvements in healthcare.  You’ll find a helpful list of PPACA’s patient safety and quality measures. The second discusses a California Healthcare Foundation study titled Consumers and Health Information Technology: A National Survey.  The survey finds that “Although only 7% of adults currently use a [personal health record] PHR, the number is growing.” The AMA News notes “That survey also found that if patients are going to be pushed toward greater PHR adoption by anyone, it’s going to be by the health care system representatives they trust the most — their physicians.”

Following up on the mid-week update, I ran across this AP article on personalized medicine, which emphasizes that while progress is being made, this is a long term solution 

Finally, take a look at this AIS Health Plan Daily article  which discusses the adverse legal consequences that can befall health plans that fail to communicate adequately with providers and members in high risk situations — here a liver transplant.

Following up on Monday’s post, here is a link to the OPM website referenced in the Federal Times article which discusses the legal difficulties in accelerating the increase in the dependent child age limit from 22 to 26. It’s worth noting that effective January 1, 2011, the health care reform act (PPACA) not only increases the limiting age but overrides the FEHB Act’s provision that terminates coverage for a child under age 22 who marries.

Yesterday, the Internal Revenue Service issued Notice 2010-38 which discusses the PPACA provision that modifies the federal tax code (Internal Revenue Code Sections 105, 106) to ensure that the expanded dependent coverage will not create adverse income tax consequences for employees / parents.  Under current law, if employer coverage is extended to, for example, a domestic partner of an employee, the employer must impute the value of that coverage to the employee’s taxable income. Absent this tax law change, employers also would have found it necessary to impute the value of the adult dependent children coverage to the employee. The IRS confirms that “As a result of changes made by the recently enacted Affordable Care Act [or PPACA], health coverage provided for an employee’s children under 27 years of age is now generally tax-free to the employee, effective March 30, 2010.”  The IRS has a website dedicated to health care reform changes. We now await Health and Human Services guidance on PPACA’s dependent child coverage provision (Sec. 2714).

Enough PPACA for now, as you may know, I am enthralled with the long term prospects for personalized medicine. I therefore found interesting this San Francisco Chronicle article about an experiment which examined the genomes to twins — one who had contracted multiple sclerosis and the other who had not.
The study led by a UCSF neurologist took nine months to complete using some of the most advanced analysis equipment in the world, at a laboratory in Santa Fe, N.M. The results are published in Thursday’s issue of Nature.

Researcher Sergio Baranzini and his team couldn’t find a genetic trigger in the twin with multiple sclerosis, but that doesn’t mean it isn’t there, he said. Geneticists may just need to dig deeper, with even more advanced technology, or they may need to narrow their search.

Or, it’s possible that at least with this one pair of twins, genes weren’t what separated them – environmental factors may have caused one sibling to develop MS, Baranzini said.

“We did not find any genetic evidence that could explain why one individual developed a disease and not the other. In that regard, it’s a significant finding because no one has looked at this level of resolution before,” he said. “But I’m not surprised we didn’t find it. We may be looking for one cell in a million.”

The study isn’t just the first to fully analyze the genomes of a pair of twins, one of whom has MS, but it’s the first detailed genomic analysis of any pair of twins – period. It is also the first to analyze someone with an autoimmune disease.

That’s hope for the future.

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Yesterday, the FEHBlog reminded readers that FEHB plans cannot accelerate implementation of the increase in the dependent child limiting age from age 22 to 26 because the FEHB Act specifies the current age 22 ceiling. Today, the Federal Times reports that

The Office of Personnel Management is working with Congress to implement the health reform law early by allowing health insurance coverage of employees’ adult dependent children up to age 26 before Jan. 1. If current laws are not changed, however, dependents age 22 and older will have to wait until 2011 for coverage.

It occurs to me that OPM may be working with Congress to add this change to the pending bills that would extend FEHB coverage to same sex domestic partners.