Waivers under fire
IT grants given as GOP escalates criticism of ACA
HHS is continuing to roll out grants and programs implementing the federal healthcare reform law, while congressional Republicans turn up the heat on the agency’s practices. Last week, House Republicans questioned senior leadership at HHS about the number of waivers the agency has granted to employers and health plans to delay coverage mandates in the law.
“I think it is an understatement to say that these waivers have been controversial,” said Rep. Cliff Stearns (R-Fla.), chairman of the House Energy and Commerce Subcommittee on Oversight and Investigations. “Obamacare was sold as all benefit—no downside.”
To date, HHS has granted waivers to more than 900 health plans representing 2.4 million people. The waivers allow insurers and employers to continue offering “mini-med” plans, which provide bare-bones coverage to workers at low cost. The waivers are one-year reprieves from the law’s requirement that plans provide at least $750,000 in annual essential benefits, including hospital, outpatient and pharmacy coverage.
“I think it’s a tacit admission that the Patient Protection and Affordable Care Act is fundamentally flawed,” Rep. Fred Upton (R-Mich.) said at the Feb. 16 hearing.
But Rep. Henry Waxman (D-Calif.), the ranking member, disagreed. He said the com- mittee was “using its oversight as an attempt at blocking the law.” As for the waivers, he said “the process has been fair.”
Plans granted waivers represent about 1% of the employer-based coverage market overall, according to HHS. Florida, New Jersey, Ohio and Tennessee are among the waiver recipients.
In his testimony before the subcommittee, Steve Larsen, director of the CMS’ Center for Consumer Information and Insurance Oversight, said the waivers aim to prevent care disruptions.
“To be sure, limited-benefit plans are not adequate coverage and can leave consumers with unexpected medical bills in the event of hospitalization or chronic disease,” Larsen said. But he added that the waivers are needed so enrollees don’t “experience a significant increase in premiums or decrease in access to benefits.”
As of Feb. 1, HHS has approved 90% of waiver applications. Of those, more than 95% were granted to health plans that include selfinsured employer plans, health reimbursement arrangements and collectively bargained multi-employer plans. The agency began accepting waiver applications in September 2010.
Larsen said HHS is analyzing data about mini-med plans and determining what approach to take for next year.
Starting in 2014, mini-med plans will become obsolete and individuals will be able to purchase coverage through the health insurance exchanges.
HHS last week moved forward with the exchanges by issuing “early innovator” grants totaling $241 million to six states and one multistate cooperative. The grants will allow each to design and deploy the information technology infrastructures to operate the exchanges.
Kansas, Maryland, New York, Oklahoma, Oregon, Wisconsin and a consortium of New England states led by the University of Massachusetts Medical School won the funding. Originally, HHS had planned to issue grants to only five states, but it got seven applications and agency officials said they liked them all.
“We really do want the exchanges to be first in class,” Joel Ario, director of the Office of Health Insurance Exchanges at HHS, said on a conference call with reporters.
The goal is for the seven early innovators to come up with models that can be replicated. “This will speed up the process for other states,” HHS Secretary Kathleen Sebelius told reporters. “We know that states understand their healthcare needs better than anyone else.”