Hidden Costs Of Health Care And The CLASS Act

Individuals in the United States spend $363 billion more on health care than is traditionally reported by the Centers for Medicare and Medicaid Services, according to a new Deloitte report.

More than half of that additional spending (55%) was for the estimated value of supervisory care, or care given by unpaid relatives and friends.

The connection to health care reform? Sec. 8002(a)(1) of the Patient Protection and Affordable Care Act (ACA, P.L. 111-148), as I explain below.

Would These Alternative To Health Reform Mandates Work?

Nine categories of “voluntary alternatives” to the mandates in the Patient Protection and Affordable Care Act (ACA, P.L. 111-148) might encourage more individuals to enroll in private insurance coverage, according to the assessments of health care experts interviewed by the Government Accountability Office (GAO).

After looking over the alternatives, let us know if you think they would reduce the number of uninsured by more than 30 million (the approximate reduction predicted for the ACA)?

Illinois Health Care Reform Implementation Council releases initial recommendations

States have been active in analyzing the reform requirements of the Patient Protection and Affordable Care Act (ACA) during the past year. Many have formed task forces or commissions to sort out those requirements. Illinois is among the states that has taken action.

Health care reform law turns one year old

Guess what today is? Go ahead – check your calendar (I’ll wait). That’s right! It’s March 23, 2011. I know what you must be thinking: “So what?” But after I remind you that today the Patient Protection and Affordable Care Act (ACA) turns one year old, you might be thinking, “Wow, that was a year ago?”

Yes, one year ago on this date, President Obama signed into law a historic piece of legislation aimed at expanding health care access and coverage. Since then, there’s been a plethora of health reform-related activities. Let’s take a look:

U.S. wants brakes put on Virginia’s request for Supreme Court review of health reform case

“This case would make a poor vehicle to address the constitutionality of the Affordable Care Act’s minimum coverage provision.”

That is one of the arguments in the United States’ brief in opposition to the state of Virginia’s request to fast track its health care lawsuit to the Supreme Court. In case you forgot, the Virginia Attorney General filed a petition last month asking the Supreme Court to take Virginia’s case now, as opposed to waiting for the case to first be decided by the court of appeals (see Health reform rollercoaster on fast track to Supreme Court?).

Appellate courts move on health reform challenges

The 11th Circuit Court of Appeals, which will review a Florida district court's decision that the Patient Protection and Affordable Care Act (ACA) violates the Commerce Clause of the Constitution, has agreed to an accelerated briefing schedule in the case (State of Florida v. U.S. Dept. of HHS (11-11021-HH)). The court has required all briefs to be filed by May 25, which is even earlier than requested by the Justice Department.

The State of Florida also asked the appellate court to hear the case during the week of June 6 en banc, or by all ten appellate court judges, rather than by a three-judge panel, which is customary for a first argument on appeal. The appellate court has yet to rule on this request.

Virginia cases. Meanwhile, in 2010 two Virginia district courts ruled on the constitutionality of the ACA. One found it to be constitutional (Liberty University v. U.S., No 6:10-cv-00015-nkm); one found it to be unconstitutional (Commonwealth of Virginia v. Kathleen Sebelius (No. 3:10CV188-HEH). Oral argument on both those cases in front of the 4th Circuit is scheduled for May 10 (Virginia v. Kathleen Sebelius, No. 10-1014).

In February the State of Virginia requested that the Supreme Court go ahead and review Virginia v. Sebelius prior to the 4th Circuit's review. The Justice Department has now asked the High Court to deny that request and allow the 4th Circuit review to proceed. "Given the Court of Appeal's imminent consideration of this case, there is no basis for short-circuiting the normal course of appellate review by granting a writ of certiorari before judgment," the DOJ explained in its motion.

For a comprehensive analysis of the ACA, including the full text of the law and additional information on health reform implementation and other recent developments in employee benefits, just click here.

EBSA will host April forum on health plan automatic enrollment

The Department of Labor's Employee Benefits Security Administration (EBSA) has announced a public forum on April 8, 2011, on the implementation of the health plan automatic enrollment provisions of the Fair Labor Standards Act (FLSA) Sec. 18A, added by the Patient Protection and Affordable Care Act (ACA, P.L. 111-148).

FLSA Sec. 18A requires employers that have more than 200 full-time employees to automatically enroll new full-time employees in one of the employer's health benefits plans (subject to any waiting period authorized by law), and to continue the enrollment of current employees in the employer's health benefits plan. Sec.18A further requires adequate notice and the opportunity for an employee to opt out of any coverage in which the employee was automatically enrolled.

Note that the DOL has previously said that until regulations are issued (and effective), employers are not required to comply with FLSA Sec 18A. The agency intends to issue final regulations by 2014.

The forum will be held on April 8, 2011, 1:00 pm to 5:00pm (EST) at the U.S. Department of Labor, Frances Perkins Building, Room C-5521 (#4),

200 Constitution Avenue, N.W., Washington, DC 20210.

Individuals and organizations interested in attending are requested to register electronically by emailing their name, organization, title, email address and phone number to e-ORI@dol.gov (use "Health Plan Automatic Enrollment Forum" as the subject line of the e-mail). For more information, contact June Solonsky in the Office of Regulations and Interpretations, EBSA, (202) 693-8500.

For a comprehensive analysis of the ACA, including the full text of the law and additional information on health reform implementation and other recent developments in employee benefits, just click here.

Florida reform case: DOJ asks for "expedited review"

After informing District Court Judge Roger Vinson that it would appeal his ruling on the constitutionality of the Patient Protection and Affordable Care Act, the Justice Department filed an appeal with the 11th Circuit U.S. Court of Appeals on an "expedited basis," as requested by Mr. Vinson in his January 2011 ruling.

Rather than file the expedited appeal, the Justice Department first asked Mr. Vinson to "clarify" his original ruling. In response, Mr. Vinson issued a brief stay of his original order, pending the DOJ's motion for appeal.

The motion for expedition of appeal asks the court to "establish the following briefing schedule, with oral argument to follow on an expedited basis as determined by the Court:"

• Defendants' Opening Brief: due 4/18/2011,
• Plaintiffs' Response Brief: due 5/18/2011,
• Defendants' Reply Brief: due 6/1/2011.

According to the Justice Department, "expedition in this case is particularly warranted because of the district court's unprecedented severability ruling, which presents issues that the federal government has not previously addressed in appellate briefs and covers numerous provisions of the Act already in effect."

The appellate case is State of Florida v. United States Department of Health and Human Services, No 11-11021.

For a comprehensive analysis of the ACA, including the full text of the law and additional information on health reform implementation and other recent developments in employee benefits, just click here.

Massachusetts After Health Reform – Do Medical Bankruptcies Spell Trouble for the Rest of Us?

So, now that Massachusetts residents have had an individual mandate for health care since January 2008, how has that impacted their rate of medical bankruptcies, which were projected to fall? According to a clinical research study recently published in the American Journal of Medicine (Medical Bankruptcy in Massachusetts: Has Health Reform Made a Difference?), medical bankruptcies in that state rose by more than one third between 2007 and 2009. The number of state residents who were uninsured decreased by approximately half, from 10.4% in 2006, when the Massachusetts health care reform was passed, to 5.5% in 2008, when the plan was implemented, lower than any other state, according to the study, which quoted Census Bureau figures.


But, we probably shouldn’t worry, because the Massachusetts health plan bears little resemblance to the ACA, right? Not according to doctors David U. Himmelstein, Deborah Thorne, and Steffie Woolhandler, who conducted the study and published the results on March 8. They claim that Massachusetts’ health reform law “closely mirrors” the ACA, and that the state’s law increased access to health insurance for its citizens but failed to substantially upgrade existing coverage or reduce costs.

In fact, as attorney Charles K. (Chip) Kerby, Liberté Group LLC, Washington, D.C. pointed out in a recent webcast (Looking Ahead to the Health Insurance Exchanges: What You Need to Know Now), both the Massachusetts health plan and the ACA have individual and employer mandates, health care exchanges, and premium subsidies. The Massachusetts plan can give all of us a good idea for what state exchanges will look like in the future, Kerby says.

According to Himmelstein, Thorne, and Woolhandler, while the new Massachusetts health care system has increased coverage for many people who were previously uninsured, the new health coverage was insufficient to counteract the high cost of premiums and gaps in coverage consisting of such things as copayments, deductibles, and uncovered services, problems that were in place before the law was passed, and that continue to exist. This is why, perhaps, that most medical bankruptcies in general appear to affect middle-class families with health insurance, they said.

Amended complaint filed Bryant v. Holder - but it's still flawed

The plaintiffs in Lt. Gov. Phil Bryant v. Eric Holder Jr. (Civ. Act No. 2:10-CV-76-KS-MTP), have filed an amended complaint, after the U.S. District Court for the Southern District of Mississippi issued a ruling, without prejudice, that they did not have standing to file suit. At this level, the plaintiffs only have to allege facts necessary for the suit to proceed, but it will be interesting in the coming weeks and months to hear them explain the specifics of what they've alleged.


The court held that they failed to plead exemptions to the penalty, failed to plead they’re above the income threshold, failed to show impending injury and failed to show they didn’t meet a religious exemption in the ACA. In the original complaint, the plaintiffs alleged injury from (1) having to purchase health insurance, (2) economic harm of a tax penalty if they don’t purchase health insurance, and (3) economic harm from having to rearrange their affairs in order to pay the penalty for not purchasing health insurance. These allegations were reiterated in the amended complaint.


The plaintiffs have now further alleged that they are “applicable individuals” under the ACA, are not incarcerated, that they do not meet the requirements for the ACA's religious exemption, and that they are not individuals who cannot afford coverage. The complaint further alleges that the ACA is causing them to ". . . currently experience fear, anxiety and emotional distress over their loss of medical privacy, . . .”


The plaintiffs are further arguing that the ACA's religious exemption violates the constitution by discriminating against various faiths because it would allow members of certain religions, ". . . who otherwise would be subject to the Individual Mandate to not comply with the mandate or be subject to any penalties for such noncompliance, while followers of other faiths (like the religious faiths of Petitioners) are subject to the Individual Mandate and to penalties for noncompliance.” But, don't other federal laws, such as the FMLA, already make allowances for members of certain religions if they have prohibitions against certain kinds of medical treatment? For example, in the recent First Circuit decision Tayag v. Lahey Clinic Hospital, Inc., No. 10-1169, (CA-1), January 27, 2011, the court pointed out that there is a "Christian Science exception" adopted by Congress, which extends FMLA protection for leave to those seeking care from religious institutions. That exception applies, however, only if the acceptance of standard medical care would be antithetical to a patient's religious beliefs. That is why one cannot expect to be given FMLA leave both for standard medical treatment and for religious nonmedical healing.

Form 1099 Repeal has support, but lawmakers disagree on payment method

It would appear that lawmakers in Washington are in agreement on the repeal of new Form 1099 reporting requirements, but can't agree on how to accomplish that. On March 3, the House passed the "Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011" (H.R. 4), which is designed to repeal the expansion of information reporting requirements contained in the section of the ACA that required businesses to file Form 1099 for payments of expenses of $600 or more.

Rep. Daniel Lungren (R-CA), who introduced the bill, has stated that it would "finally provide assurance to small business owners that they will not be subject to this unfair and unnecessary tax reporting burden." The repeal of the expanded reporting requirements has received wide bipartisan support, but many lawmakers are less than pleased with this particular bill, and it is possible that it won't pass the Senate.

Obama Administration Gets Seven Days To Appeal Repeal Ruling

Phew! Now those implementing the provisions of the Affordable Care Act can breathe easier—Florida Judge Roger Vinson has delayed his order repealing the entire law and generously granted the Administration of Barack Obama seven days (count them) to appeal his ruling before it takes effect. Assuming the appeal is made, implementation of the law will continue until the case is resolved.

You may recall that Mr. Vinson made his ruling in response to claims made by Florida and 25 other states. In late January, Mr. Vinson issued his original order. Subsequently, the Obama Administration asked Mr. Vinson for a clarification as to whether he intended that the federal government cease implementing the law. In issuing the delay, Mr. Vinson “clarified” that his original order indicated the law could not be implemented.

In a sharp rebuke, Mr. Vinson said that he had not expected that the Administration “would effectively ignore the order and declaratory judgment for two-and-one-half weeks, continue to implement the Act, and only then file a belated motion to ‘clarify.’”

Nonetheless, Mr. Vinson said, “I agree that it would indeed be difficult to enjoin and halt the Act’s implementation while the case is pending appeal. It would be extremely disruptive and cause significant uncertainty.”

Mr. Vinson then concluded, “As both sides have repeatedly emphasized throughout this case, the Act seeks to comprehensively reform and regulate more than one-sixth of the national economy. It does so via several hundred statutory provisions and thousands of regulations that put myriad obligations and responsibilities on individuals, employers, and the states. It has generated considerable uncertainty while the constitutionality of the Act is being litigated in the courts. The sooner this issue is finally decided by the Supreme Court, the better off the entire nation will be. And yet, it has been more than one month from the entry of my order and judgment and still the defendants have not filed their notice of appeal.”

Thus, Mr. Vinson conditioned his delay upon the Administration filing its “anticipated appeal within seven (7) calendar days of this order and seeking an expedited appellate review, either in the Court of Appeals or with the Supreme Court.”

Some of the states involved in the case had delayed beginning implementation of portions of the law. After Mr. Vinson’s stay, at least one of those states, Alaska, finally decided it had better begin the process. In delaying implmentation, Alaska lost its opportunity to get $1 million in federal health care assistance. Money talks both ways.

For a comprehensive analysis of the Patient Protection and Affordable Care Act, including the full text of the law and additional information on health reform implementation and other recent developments in employee benefits, just click here.

Need For Health Reform Greater Than Ever

Two new reports from the Agency for Healthcare Research and Quality, the National Healthcare Quality Report and the National Healthcare Disparities Report, seem to bolster the need for provisions of the Patient Protection and Affordable Care Act. These reports found that health care quality and access are lower than is desirable, that access to and disparities in care are not improving and some are worsening.

In the report summary, the AHRQ wrote that “our analyses indicate that health care quality in America is suboptimal. The gap between best possible care and that which is routinely delivered remains substantial across the Nation.”

Access to health care services and disparities in care are especially connected to socioeconomic status, race, and ethnicity. For example, low income individuals overwhelmingly experienced worse quality of care (in 82% of measures) and access to care for all care measures than did high income; followed by Hispanics (in three-fifths of measures for quality of care and four-fifths of measures for access to care) compared with nonHispanic whites; and blacks (in two-fifths of measures for quality of care) compared with whites.

But it isn’t just the disadvantaged uninsured that experienced lower than desired quality and access to care—on average, individuals received recommended preventive services two-thirds of the time and appropriate acute care services and recommended chronic disease management services three-quarters of the time. Also, individuals reported barriers to care 20% of the time with 60% of individuals indicating that their “usual” medical provider hhad no office hours on evenings or weekends.

The AHRQ reports also found that individuals with private non-group health insurance are nearly three times as likely as those with private, employer-sponsored health insurance to pay high premiums and out-of-pocket medical expenses.

Adults age 18 through 44 and Hispanics are least likely among all age and ethnic groups to have health insurance. Of particular note is that the percentage of people with health insurance worsened for middle-income individuals. In the current, depressed economic climate, middle-income individuals are increasingly vulnerable to loss of health insurance.

“We need to improve access to care, reduce disparities, and accelerate the pace of quality improvement, especially in the areas of preventive care, chronic disease management, and safety,” the AHRQ concluded. The ACA is attempting to do just that, if only we will work with it.

For a comprehensive analysis of the Patient Protection and Affordable Care Act, including the full text of the law and additional information on health reform implementation and other recent developments in employee benefits, just click here.