Subcommittee to Examine Barriers to Lower Health Care Costs

***MEDIA ADVISORY***Subcommittee to Examine Barriers to Lower Health Care Costs

WASHINGTON, D.C. – On Thursday, May 31 at 10:00 a.m., the Subcommittee on Health, Employment, Labor, and Pensions, chaired by Rep. Phil Roe (R-TN), will hold a hearing entitled “Barriers to Lower Health Care Costs for Workers and Employers.” The hearing will take place in room 2175 of the Rayburn House Office Building. Independent reports continue to highlight the rising cost of health care. A study by the Kaiser Family Foundation revealed the average annual premium for a family health care plan increased by 9 percent in 2011 and now exceeds $15,000. Additionally, a survey by Pricewaterhouse Coopers estimates employer health care costs will rise by 8.5 percent this year. The 2010 health care law failed to lower costs and continues to undermine employers’ and workers’ ability to access affordable health care options. For example, the law restricted the use of health savings accounts and limited the ability to contribute to a flexible spending account. Furthermore, a recent regulatory bulletin issued by the Obama administration may actually discourage employers from offering these kinds of consumer-directed health plans. Thursday's hearing will provide committee members an opportunity to examine federal policies that make it more difficult for workers and employers to control health care costs. To learn more about Thursday’s hearing, visit http://edworkforce.house.gov/hearings.

# # # WITNESS LIST Mr. Bill Streitberger Vice President of Human Resources Red Robin International Greenwood Village, CO Mr. Ed Fensholt Senior Vice President and Director of Compliance Services Lockton Benefit Group Kansas City, MO Mr. Roy Ramthun President HSA Consulting Services Washington, D.C. Jody Hall Owner Cupcake Royale and Verite Coffee Seattle, WA

Majority Speaker Cantor's Memo to Republicans on Summer Agenda

MEMORANDUM

TO: House Republicans

FR: Eric Cantor

DT: Friday, May 25, 2012

RE: Summer Legislative Agenda

In line with our underlying principles for legislation, the House will move forward this summer with a number of proposals aimed at addressing job creation and the economy, reducing spending, and shrinking the size of the federal government while protecting and expanding liberty. Above all, we must continue to focus on economic growth and small business—producing results that get Americans back to work. The summer legislative schedule is detailed below for your review.

MEMORIAL DAY TO FATHER’S DAY

Nearly 7,000 American servicemen and women have lost their lives in Operation Enduring Freedom and Operation Iraqi Freedom. There’s no question that these tragic losses have made our country safer. Every day that goes by quietly on American soil is yet another silent reminder of the courageous blanket of freedom that our men and women in uniform have selflessly provided for us.

As we observe Memorial Day, it is critical that we ensure for the care and support of our returning heroes. To that end, the House will take up the Military Construction and Veterans’ Affairs Appropriations bill on Thursday May 31, and Friday, June 1. This year’s bill maintains funding at the FY12 appropriated level, taking into account our commitment to our Armed Forces and veterans and the reality of today’s fiscal challenge. Chairman Hal Rogers and Subcommittee Chairman John Culberson should be commended for their work.

We will also pass our third authorization of the nation’s intelligence community and its activities since taking the majority. I expect Chairman Mike Rogers’ bill (H.R. 5743) to be brought forth and passed on Thursday, May 31, in a bipartisan manner. The Intelligence Committee’s work this Congress has been truly impressive in restoring both the role of congressional oversight and bipartisanship, as well as needed policy solutions in rising threat areas like cyber security.

Members should be prepared to vote on Chairman Fred Upton’s FDA user fee reform bill (H.R. 5651) on Wednesday, May 30. Chairman Upton’s bipartisan bill brings needed reform to the federal drug and medical device approval process, enhancing the environment for American innovation and job growth. Though these programs expire at the end of September, the Energy and Commerce Committee hopes to complete negotiations with the Senate on a final bill by July 4th.

Related to the medical device industry is the draconian tax that is scheduled to go into effect under ObamaCare. This tax, to fund a flawed law, will have a negative impact on jobs in the medical device industry. Chairman Dave Camp and the Ways and Means Committee



2

have done an excellent job highlighting this issue, as well as ObamaCare’s ban on the use of Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs), and other accounts to purchase over-the-counter (OTC) drugs. Regardless of the outcome of the Supreme Court’s decision on the constitutionality of ObamaCare, we should all be able to agree on Erik Paulsen’s bill to repeal the medical device tax (H.R. 436) and Lynn Jenkins’ bill to repeal the OTC ban (H.R. 5842). I expect a vote on the Paulsen and Jenkins bills as early as the week of June 4.

The remainder of our pre-Father’s Day legislative agenda will be spent considering additional appropriations bills. Though we continue to work with the Committee on an exact schedule, possible bills include Energy and Water Appropriations, Homeland Security Appropriations, and Legislative Branch Appropriations. Each bill conforms to the overall level of discretionary spending authorized under the House’s FY13 budget resolution and deserves our support.

As the Speaker has committed, these bills will be considered under an open and deliberative process, allowing all Members to offer amendments. In order to consider as many bills and amendments as possible, Members should be judicious in the issues they choose to raise, and expeditious in their remarks during consideration.

FATHER’S DAY TO INDEPENDENCE DAY

When we return from Father’s Day, the House will turn its attention on the floor to American jobs and out-of-pocket expenses affected by domestic energy production. According to AAA, the average national price of a gallon of gasoline was $1.84 when President Obama took office. The average today is roughly double that level. That additional cost acts as a drag on the already-sluggish economy and a tax on struggling American consumers, especially small businesses and the middle class.

Some Democrats argue that increasing domestic oil and natural gas leases and regulatory reform won’t affect the price at the pump today. This is the same argument they made 10 years ago that has prevented production today and contributed to domestic refinery closures.

The real tragedy is that thousands of jobs go unrealized as a result of the President’s energy policies—jobs that could bolster our slow economic recovery. It is critically important that we promote and invest in America’s energy resources, encouraging—not discouraging— states like North Dakota, Ohio, and Pennsylvania to lead a domestic energy boom.

Therefore, Chairman Doc Hastings and Chairman Upton will be bringing forward a series of bills from their respective committees during the week of June 18 to encourage production on federal lands and lessen the burden of job-inhibiting red tape. Mike Coffman, Cory Gardner, Bill Johnson, Doug Lamborn, Scott Tipton, and Ed Whitfield, as well as the entire House Energy Action Team (HEAT), will be instrumental in this debate.



3

Job creation often starts at the local level with small businesses but all too often federal policies stand in the way of economic growth. By employing sound, scientific management, government can play a role in fostering growth at no cost to the taxpayer. Where appropriate, through reducing bureaucratic delays, transferring or selling land, and modifying restrictive land use designations, we can give a green light to needed infrastructure. Members on both sides of the aisle have locally-tailored bills such as these and Chairman Hastings and the Natural Resources Committee have done an excellent job in bringing them forward. I expect a number of these bills to come to the floor the week of June 18.

Finally, we will close out the month of June with the consideration of additional appropriations bills and stop-gap measures.

INDEPENDENCE DAY TO AUGUST

Americans will rightly be focused on the effects of the Supreme Court’s ObamaCare decision when we return from July Fourth. Although we do not know how the Court will rule, we are prepared to move forward to ensure that the whole unworkable law is fully repealed.

Of course, we will also be focused on economic growth during the month of July. It’s too hard to be a small business owner in America right now and we’ve got to turn that around. First among our efforts will be passing Tim Griffin’s bill (H.R. 4078) aimed at cutting government red tape to make it easier for small businesses to create jobs. Under the Griffin bill, there will be a moratorium imposed on any new regulation, save for health and emergency, until unemployment drops below six percent nationally.

Additional Members, like Reid Ribble and Ben Quayle, have legislation to get government regulations off the back of our job creators. The Ribble bill (H.R. 4607) curtails so-called "midnight regulations," while the Quayle bill (H.R. 3862) shines a light on the preponderance of "sue-and-settle" agreements. We will be working with Chairman Lamar Smith and the Judiciary Committee to schedule as many of these proposals as possible throughout July.

The music industry and small business owners across the country watched nervously as the federal government recently raided Gibson Guitar. Whether intended or not, a 2008 law amending the over 100-year old Lacey Act resulted in the raid. Just as fast as Congress can create unintended consequences, we can also fix them. Jim Cooper and Marsha Blackburn have introduced a bill (H.R. 3210) that helps protect small business jobs from government criminalization. The Natural Resources Committee is currently working to advance the bipartisan Cooper bill so that it can be considered on the floor in July.

Our constituents have been—or will soon be—impacted by the closure and hours of operation changes to U.S. Postal Service (USPS) facilities across the country. This is the result of yet another government backed entity that cannot meet its financial obligations and is in need of vast reforms to its business plan and operations. Chairman Darrell Issa,



4

Subcommittee Chairman Dennis Ross, and the Oversight and Government Reform Committee have passed a responsible proposal (H.R. 2309) to reform the USPS, and we will be working to bring their bill to the floor.

In July, we will also be voting on Ron Paul’s bill authorizing an audit of the Federal Reserve and report to Congress (H.R. 459).

Very little of what we do this summer will be able to offset the harm to small businesses if the largest tax increase in American history is allowed to go into effect on January 1, 2013. In fact, the Congressional Budget Office (CBO) warned us earlier this week that this massive tax increase will likely contribute to what would "probably be judged to be a recession."

Working families and small business should not be saddled with the uncertainty of a looming tax increase as they attempt to invest and grow for the remainder of this year. That’s why Chairman Camp and the Ways and Means Committee have been working on pro-growth reform to simplify the tax code.

Knowing that comprehensive reform will take time, we must ensure that while Congress is working to bring about competitive change, government does not increase the cost of business. Therefore, before we leave for August, I expect to schedule a vote on legislation preventing the largest tax increase in history. The Senate should join us in providing this very basic level of certainty prior to November.

CONCLUSION

We have a busy legislative agenda planned this summer and our schedule will undoubtedly require further additions. I hope this memo provides you and your constituents with an outline of our pro-growth plan for the months ahead. Have a safe and blessed Memorial Day.

Sincerely,

Eric

Modern Healthcare Reports: Individual Plans Miss Reform-Law Targets: Study

By Jessica Zigmond

Modern Healthcare

May 23, 2012

The majority of individual health plans in a representative sample for the year 2010 did not meet the standards and benefits required by the Patient Protection and Affordable Care Act, according to the findings of a new Health Affairs study.

Researchers used the Kaiser Family Foundation/Health Research and Educational Trust 2010 Employer Health Benefit Survey to examine group plans and sampled enrollment data in five states through interviews with marketing managers at insurance carriers for the individual plans.

“More than half of Americans who had individual insurance in 2010 were enrolled in plans that would not qualify as providing essential coverage under the rules of the exchanges in 2014,” the study noted. “These people were enrolled in plans with an actuarial value below 60%, which means that the plans covered less than that proportion of the enrollees' health expenses.”

The report also showed that 51% of individual plans they evaluated had an actuarial value of less than 60%, which is the bottom of the so-called bronze range that is one of four levels established by the Affordable Care Act. That bronze level has an actuarial value of between 60% and 69%. Group health plans, however, fared better. According to the study, the average actuarial value for group health insurance plans was 83%, which falls in the “gold” level.

HHS offered additional guidance to states about the state exchanges last week.

Agents Survive 2012 Louisiana Legislative Session

Louisiana's Legislative Session had the Agents of Louisiana fighting the health insurance carriers against two bills and one house resolution.  Agents ask the health carriers and the House Insurance Committee for time to allow the Supreme Court to rule and the elections in November before going to the table and negotiating a change in the commission structure.

LAHU is currently looking for those interested individuals wanting to serve on a committee to investigate balance billing and will be coming to a city near you to start the discussion on agent compensation. 

In another positive note, HB 989 passed passed by Representative Mike Huval that provides claims transparency.  This bill followed Texas law and is headed to the Governor's desk for signature.  Renee Baker of NFIB worked throughout the last year and a half to pass this legislation.  I would like to also thank Senator Robert Adley, Danny Ford of NAIFA, Cheryl Tobert of LBGH and Mary Smith of IMA.

CMS Releases: Draft Blueprint for Approval of Affordable State-based and State Partnership Insurance Exchanges - Frequently Asked Questions

Below are a number of Frequently Asked Questions (FAQs) regarding the approval process for Affordable Insurance Exchanges as set forth in the Draft Blueprint for Approval of Affordable State-based and State Partnership Insurance Exchanges released by HHS on May 16, 2012.

Q1: My State is pursuing a State-based Exchange or a State Partnership Exchange for plan year 2014 (beginning on October 1, 2013). What do we need to do now?

A1: A State that intends to pursue a State-based Exchange or a State Partnership for 2014 should prepare to submit an Exchange Blueprint, which is comprised of two parts:

• An Exchange Model Declaration Letter from your Governor; and
• An Application describing readiness to perform Exchange activities and functions.

The Exchange Blueprint is due no later than 30 business days prior to January 1 (i.e., on or before November 16, 2012, for plan year 2014). The Exchange Model Declaration may be submitted with the Application or before submission of the Application. If a State’s model Declaration Letter is received at least 20 business days prior to the Application, a State may request a Blueprint consultation where CMS will provide technical assistance and guidance to the State in completing the Application.

Q2: My State is considering a Federally-facilitated Exchange. Is there anything we need to do?

A2: A Blueprint Application is not required. However, it is recommended that your Governor submit an Exchange Model Declaration Letter as described in the Exchange Blueprint. This will improve service to your residents by helping to ensure alignment between your existing State markets and the Federally-facilitated Exchange.

Q3: What happens if my State does not submit a Declaration Letter to HHS about its decision to pursue an Exchange Model?

A3: If a State does not choose an Exchange model, HHS will assume that the State is not planning to operate as a State-based Exchange or a State Partnership Exchange. HHS will operate the Federally-facilitated Exchange in the State and will perform the Exchange-related programs of risk adjustment and reinsurance. Your State will work with the Center for Medicaid and CHIP Services within CMS to determine whether the Federally-facilitated Exchange will make eligibility determinations or assessments for these programs.

Q4: Are there any advantages for a State if it submits a Declaration Letter prior to the submission of its Exchange Blueprint?

A4: Yes. A State pursuing a State-based Exchange or a State Partnership Exchange will be offered an opportunity to consult with CMS staff to discuss the Application portion of the Blueprint (“Blueprint Consultation”) when its Model Declaration Letter is received, provided the letter is received at least 20 business days prior to the submission of the application. A Blueprint Consultation is optional; it provides a State with the opportunity to ask questions and receive feedback on the preparation of the remainder of its Exchange Blueprint, prior to submission.

Q5: Where can I find the Blueprint? Must the application be filed electronically?

A5: The Blueprint Declaration Letter must be submitted through an email to State.Exchange.Group@cms.hhs.gov, as well as mailed to CMS Center for Consumer Information and Insurance Oversight (CCIIO), 200 Independence Ave SW, Suite 739H, Washington, DC 20201. The Blueprint Application must be submitted electronically, and will be available on the State Exchange Resource and Virtual Information System (SERVIS), available at: Https://servis.cms.hhs.gov on September 14, 2012. The individual(s) designated by the Governor in the Model Declaration Letter may complete and electronically sign the application.

Q6: When will approval of the Exchanges be granted by HHS?

A6: The Affordable Care Act directs HHS to make initial Exchange approval determinations no later than January 1, 2013, for Exchange operation in plan year 2014. However, States that submit their Blueprints early may receive an earlier determination. States seeking HHS approval to operate an Exchange for coverage years beginning after 2014 (e.g., plan year 2015 beginning on October 1, 2014), will submit a Model Declaration Letter and Blueprint in accordance with the same process and timeframes specified for States seeking to operate an Exchange, beginning January 1, 2014.

Q7: What information is required for the Blueprint?

A7: States are asked to submit a compilation of attestations, descriptions of processes, supporting documentation and reference files. The State may be asked to provide additional information after the Blueprint has been submitted, as determined necessary by CMS. In addition to completing the Exchange Blueprint, HHS may conduct on-site or virtual Exchange assessments, as part of its verification of an Exchange’s operational readiness. HHS will use the results from a State’s Reference File submissions to determine the timing for a State’s operational readiness assessment. HHS will make an approval or conditional approval decision based on the documentation and the completed Exchange Blueprint.
Additionally, the Establishment Review process has been designed to support States as they work toward Exchange approval. States may submit documentation from HHS that confirms successful Establishment Review performance, in place of certain Blueprint required documentation.

Q8: What are reference files?

A8: These are files and documentation that the State will submit to demonstrate its Exchange’s ability to perform a particular Exchange activity. Where noted, the State may attest to having received confirmation from HHS of successfully providing the relevant documentation as part of the Establishment Review. In such cases, the State does not need to upload the files, and HHS will confirm the State’s submitted files and documentation from the Establishment Review conducted during oversight of the § 1311(a) grants to ensure adequate compliance related to the activity. The following provides a description of the types of reference files that may be required:

1. Summary of results of State-developed testing: These summaries document comprehensive State-defined and executed system testing, including details of Exchange activities tested, the scope of testing activities conducted, and metrics detailing the results of that testing as they relate to each designated Exchange Blueprint requirement.
2. Results of State execution of CMS-developed test scenarios: These scenarios will be developed by CMS to confirm implementation of those Exchange activities that require standardization across all State Exchanges. These scenarios will be released to a central Test Library on the Collaborative Application Lifecycle Tool (CALT).
3. Summary of Independent Verification & Validation (IV&V) of applicable system components: These reports by an independent third party provide verification and validation that designated Exchange activities are built and operating as designed and in compliance with documented requirements.

Q10: What standard will be used for approval of a State-based Exchange?

A10: HHS will approve a State-based Exchange if the Blueprint and any additional operational readiness testing demonstrate that the State-based Exchange has the ability to perform Exchange activities. HHS recognizes that States will be in various stages of the Exchange development lifecycle and that some systems-development and contracting activities associated with building an operational Exchange will need to occur in 2013. Therefore, HHS will consider approving a State-based Exchange with conditions to operate for plan year 2014.

Q11: If my State cannot demonstrate that it meets all Exchange activity requirements, what will happen?

A11: HHS may Conditionally Approve an Exchange if the State can demonstrate that significant progress is being made on Exchange activities (listed in the Blueprint) at a pace that ensures that the State will have an operational Exchange by the initial open enrollment period (October 1, 2013).

Q12: What does a State need to do if it receives a conditional approval of its Exchange?

A12: A State that receives a Conditional Approval of its Exchange will be expected to sign an agreement that outlines the terms and conditions of its Conditional Approval determination. The agreement will include provision(s) that the Exchange adhere to monitoring reviews by HHS to ensure that the establishment of the Exchange continues to progress at a pace that will allow it to be operational for the initial open enrollment period. The frequency and focus of the monitoring reviews will depend upon the Exchange activities that remain outstanding. Technical assistance and systems testing will also provided in all States that receive Conditional Approval. In addition, HHS will approve a State to operate its Exchange once it has successfully completed an Operational Readiness assessment.

Q13: How long can a State stay conditionally approved?

A13: A State Exchange will remain Conditionally Approved until it meets all Approval requirements.

Q14: Can a State reference documents in its Blueprint that were submitted to CMS during the State’s Establishment Review?

A14: Yes. States that have received notification from CMS of their successful completion of portions of the Establishment Review may be able to reference the information as responses to certain sections of the Blueprint.

Q15: If a State has questions about the Exchange Blueprint, who is the appropriate contact person?

A15: The State’s State Officer at the CCIIO is the point of contact for all questions related to the Exchange Blueprint submission. General questions may be directed to State.Exchange.Group@cms.hhs.gov

Q16: This version says “Draft” on it. Is the posted version of the Blueprint the actual Blueprint States will need to complete?

A16: As a part of the Paperwork Reduction Act (PRA) of 1995, this Blueprint is open for public comment. This comment period provides another opportunity for the public to provide input and recommendations regarding the accuracy of the time estimate and the burden created by the required information collection. Comments will be taken into consideration before the final Blueprint is posted later this summer. However, as this Blueprint reflects what is set forth under the law and its implementing regulations, we anticipate very few changes in substance or format and do not anticipate that the requirements for the Exchange Blueprint will change significantly. We also do not expect there to be additional burden placed on States to complete this information collection. The Blueprint may be modified in the future to reflect new guidance and rules. However, States should feel free to rely on this Blueprint for contracting and design purposes.