The Affordable Care Act: Supporting Innovation, Empowering States

On February 28, President Obama reiterated his belief that States should have the power and flexibility to innovate and find the health care solutions that work best for them and announced his support for accelerating State Innovation Waivers and allowing states to apply for them starting in 2014.

Beginning in 2017, the law allows States the flexibility to receive a State Innovation Waiver so they may pursue their own innovative strategies to ensure their residents have access to high quality, affordable health insurance. These strategies – which must provide affordable insurance coverage to at least as many residents as the Affordable Care Act and must not increase the federal deficit – could include allowing large employers to purchase coverage through State Exchanges or increasing the number of benefit levels to provide more choices for individuals and small businesses.

Under the bipartisan “Empowering States to Innovate Act” introduced by Senators Ron Wyden, Scott Brown, and Mary Landrieu, State Innovation Waivers would be available three years earlier than under current law, so long as States meet certain criteria, including certifying that their proposals would cover at least as many of their residents as the policies in the Affordable Care Act would have covered.

The proposal offers States more flexibility while ensuring that all Americans, no matter where they live have access to affordable, accessible health insurance. Additionally, the proposal includes built-in protections to ensure that these waivers do not increase the Federal budget deficit.

The Affordable Care Act already creates a critical role for States. It provides them with the flexibility and resources necessary to innovate and implement reform in the manner that works best for them. The law has already made nearly $2.8 billion available to states and every State has taken steps – and, in some cases, bold actions – to implement the law and improve health insurance accountability and affordability for their citizens. States can design their own Exchanges, shape their Medicaid programs, and take the lead in enforcing patient protections and reviewing rates increases of private insurers.

Empowering States to Innovate

Under the Affordable Care Act, State Innovation Waivers allow States to propose and test alternative ways to meet the shared goals of making health insurance affordable and accessible to all Americans, including those living with pre-existing conditions. Specifically, State Innovation Waivers are designed to allow States to implement policies that differ from the new law so long as they:

• Provide coverage that is at least as comprehensive as the coverage offered through Exchanges – a new competitive, private health insurance marketplace.

• Make coverage at least as affordable as it would have been through the Exchanges.

• Provide coverage to at least as many residents as the Affordable Care Act would have provided.

• Do not increase the Federal deficit.

State Innovation Waivers are provided for up to five years, with the option of renewal. If a State’s innovation fails to meet the criteria outlined above, the policies outlined in the Affordable Care Act would take effect.

Potential State-Based Innovations

The Affordable Care Act offers considerable flexibility to States without waivers. It also recognizes that new, creative effective ideas may emerge. While States have the freedom to develop their own proposals that may qualify for a State Innovation Waiver, some proposals that could qualify include:

* A streamlined system that links tax credits for small businesses with tax credits for low-income families.
* Alternatives to the individual responsibility provision – such as automatically enrolling individuals in health plans – that achieve similar outcomes.
* Alternative health plan options to increase competition and provide consumers with additional choices.
* An increase in the number of benefit levels to provide more choices for individuals and small businesses.
* Immediately allowing large businesses interested in doing so to purchase health insurance through the new private marketplace, the State-based health insurance Exchange.

The law also allows States to submit a single application that includes Medicaid waiver requests which could, for example, seek to give people eligible for Medicaid the choice of enrolling in Exchange plans.

Maintaining Important Consumer Protections

The Affordable Care Act ends the worst insurance company abuses and gives Americans more freedom and control over their health care choices. Already, under the law, most insurance companies:

• Cannot impose lifetime limits on the dollar amount they will spend on health benefits.

• Must offer young adults without access to job-based coverage the option of remaining on their
parent’s plan until their 26th birthday.

• Must cover recommended preventive services without cost sharing.

• Must allow patients to choose their own doctor in their network.

• Cannot drop your coverage solely due to your getting sick.

• Must spend at least 80 percent of premium dollars on health care, rather than executive salaries
and administrative costs.

Starting in 2014, insurance companies cannot charge more, carve-out benefits, or deny coverage because of a pre-existing condition. States that receive a State Innovation Waiver would be required to maintain these important consumer protections that prevent insurance companies from denying, capping or limiting care.

Waiver Evaluation

Under the Affordable Care Act, the Secretaries of Health and Human Services and Treasury are responsible for evaluating State Innovation Waiver applications and ensuring proposals will meet the shared goals of making health insurance affordable and accessible to all Americans, including those with pre-existing conditions. Under the proposed legislation, the Secretaries would continue to play this role and be empowered to grant waivers beginning in 2014. Once complete, State Innovation Waiver applications must be reviewed within 180 days of being received. The Departments of Health and Human Services and Treasury will issue proposed regulations outlining the process for applying for a State Innovation Waiver this spring. The Departments will accept public comment, including comments from States, on this proposed regulation.

President’s Plan to Cut Red Tape, Give States Flexibility

President Obama will also take an additional important step to help States, improve outcomes, and lower costs for the American taxpayer. This week, the President will issue a memorandum directing Executive Departments and Agencies to work with State, Tribal, and local governments to reduce unnecessary regulatory and administrative burdens in order to focus resources on achieving better outcomes at lower cost. In this memorandum, the President is:

* Instructing the Director of OMB to lead a collaborative process of Federal agencies, State, Tribal, and local governments to coordinate and streamline procedures that cut across agency, program and geographic bounds.

* Requiring agencies to work closely with States, Tribes, and local governments to identify administrative, regulatory, and legislative barriers in Federally-funded programs that currently prevent them from efficiently using tax dollars to achieve the best results for their constituents.

The White House • 1600 Pennsylvania Avenue, NW • Washington DC 20500 • 202-456-1111

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Mailboxes wait out a blizzard

Snow flies during a blizzard. View of mailboxes and city park.
Mailboxes sit out another Minnesota blizzard.

Snow, snow, and more snow. That’s been the winter of 2010-11 here in Minnesota and much of the continent. This view shows the city park in the background with the mailboxes waiting for their one purposeful moment in the day – the postal carrier.

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Justice Department Settles with National Board of Medical Examiners Over Refusal to Provide Testing Accommodations

WASHINGTON – The Justice Department today announced a settlement under the Americans with Disabilities Act (ADA) with the National Board of Medical Examiners (NBME), a private, non-profit organization that administers the U.S. Medical Licensing Examination (USMLE), a standardized examination related to medical licensing. Under the terms of the settlement agreement, NBME is committed to providing reasonable testing accommodations to persons with disabilities who seek to take the USMLE, in accordance with the requirements of the ADA. In addition, it will grant Frederick Romberg, a Yale Medical School student, the accommodations of double the standard testing time and a separate testing area to take the USMLE.

“In the past, demands for unnecessary or redundant documentation, burdensome and expensive repeated professional evaluations, or irrelevant evaluative testing unrelated to the ability to demonstrate one’s knowledge or skills on an examination prevented individuals with appropriately documented disabilities from pursuing their chosen professions.” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “By entering into this agreement, NBME is doing its part to ensure that people with a reading disability like Mr. Romberg will have the opportunity to take the USMLE with the reasonable testing accommodations they need to demonstrate their knowledge and ability.”

Under the agreement, the NBME will:

• Only request documentation about (a) the existence of a physical or mental impairment; (b) whether the applicant’s impairment substantially limits one or more major life activities within the meaning of the ADA; and (c) whether and how the impairment limits the applicant’s ability to take the USMLE under standard conditions;

• Carefully consider the recommendations of qualified professionals who have personally observed the applicant in a clinical setting and recommended accommodations based upon their clinical judgment that the individual is substantially limited in one or more major life activities within the meaning of the ADA and needs the requested test accommodations in order to demonstrate his or her ability and achievement level; such recommendations are to be based on generally accepted diagnostic criteria and supported by reasonable documentation.

• Carefully consider all evidence indicating whether an individual’s ability to read is substantially limited within the meaning of the ADA, including the extent to which it is restricted as to the conditions, manner or duration as compared to the reading ability of most people.

The Justice Department opened an investigation in response to a complaint from Mr. Romberg who alleged that the NBME had twice denied him reasonable testing accommodations to take the USMLE because of his disability, dyslexia, in violation of the ADA. Subsequently, the department and the NBME sought to resolve the investigation by reaching a settlement agreement.

The settlement was reached under Title III of the ADA which prohibits discrimination against individuals with disabilities by private testing entities that administer examinations related to professional licensing. More information about the Civil Rights Division and the laws it enforces is available at the website www.justice.gov/crt. More information about the settlement with NBME can be found at www.ada.gov or by calling the toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TTY).

The White House • 1600 Pennsylvania Avenue, NW • Washington DC 20500 • 202-456-1111

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Obama Administration Continues Its Strong Support for Community Living

Nationally, $4.3 Billion in New Funds Announced to Help Establish and Expand Community-based Alternatives to Institutional Long Term Care

States will see significant new federal support in their efforts to help move Medicaid beneficiaries out of institutions and into their own homes or other community settings now and in the near future, Health and Human Services (HHS) Secretary Kathleen Sebelius announced today.

The Affordable Care Act provides additional funding for two programs supporting that goal, the Money Follows the Person (MFP) demonstration program and the Community First Choice Option program. Today, Secretary Sebelius announced thirteen States would together receive more than $45 million in MFP grants to start that program in their States, with a total of $621 million committed through 2016. In addition, HHS has proposed rules to allow all States to access a potential of $3.7 billion in increased federal funding to provide long-term services and supports through the Community First Choice Option program.

“Our country recognized in the Americans with Disabilities Act that everyone who can live at home or community-based setting should be allowed to do so,” Secretary Sebelius said. “The Affordable Care Act provides States critical new dollars toward achieving that goal.”

Thirteen States Receive Money Follows the Person Program Grants

The Money Follows the Person (MFP) demonstration program, which was set to expire in fiscal year 2011, is extended through the Affordable Care Act for an additional five years. The 13 States receiving awards today (see list and award amounts below) join the 29 States and the District of Columbia already operating MFP programs. Together, these States will receive more than $45 million in the first year of the program, and more than $621 million through 2016.

The MFP program provides individuals living in a nursing home or other institution new opportunities to live in the community with the services and supports they need. Groups benefiting from these home-and-community based programs include the elderly, persons with intellectual, developmental and/or physical disabilities, mental illness or those diagnosed with several of these conditions. To date, these programs have helped 12,000 individuals move out of institutions and back into their communities. Today’s grants are expected to help an additional 13,000 people.

“The Money Follows the Person program is hugely important to improving the lives of Medicaid beneficiaries,” said Donald Berwick, M.D., administrator of the Centers for Medicare & Medicaid Services (CMS), which will implement the demonstration program. “This helps bring everyone, even those who in the past may have had no choice but to live in an institution, into the community where they can become full participants in the activities most of us take for granted.”

New Community First Choice Option Available to States

Many of the same goals under the MFP demonstration are shared and supported by the Community First Choice (CFC) Option, created by the Affordable Care Act. Today, nursing homes and institutions are too often the first or only choice for people with Medicaid who need long term care. The goal of this new option is to give States additional resources to make community living a first choice, and leave nursing homes and institutions as a fall back option.

Starting in October, this option will allow States to receive a six percent increase in federal matching funds for providing community-based attendant services and supports to people with Medicaid. Over the next three years—through 2014—States could see a total of $3.7 billion in new funds to provide these services. States currently receive Federal Medicaid matching funds for these activities at the State’s normal matching rate.

Services and supports that can be provided under CFC include, but are not limited to, attendant services and supports that help individuals with activities of daily living such as bathing and eating, and health-related tasks through hands-on assistance or supervision. States may also cover costs related to moving individuals from an institution to the community, such as security and utility deposits, first month’s rent, and purchasing basic household supplies.

To qualify for the increased Federal funds, States must develop “person-centered plans” that allow the individual to determine how services are provided to achieve or maintain independence. States must also establish implementation councils with a majority membership consisting of persons with disabilities, elderly individuals and their representatives to advise in the design and implementation of Community First Choice option. The proposed rule, posted today, describes the details of this program and solicits public comment. The rule can be found at: http://www.ofr.gov/OFRUpload/OFRData/2011-03946_PI.pdf.

“There is more evidence than ever that people who need long-term care prefer to live in their own homes and communities whenever possible,” said Dr. Berwick. “To restrict these individuals to institutions where even the simplest decisions of the day such as when to get up, what to eat and when to sleep are made by someone else must no longer be the norm. This new Federal funding will make a difference in people’s lives.”

MONEY FOLLOWS THE PERSON DEMONSTRATION GRANTS

See below for the list of States receiving MFP grants today.

Money Follows the Person Grant Awardees

State
Grantee
1st YR. Award
Funds committed through 2016

Colorado

Colorado Department of Health Care Policy & Financing

$2,000,000

$22,189,486

Florida

Florida Agency for Health Care Administration, Medicaid

$4,203,999

$35,748,853

Idaho

Idaho Department of Health and Welfare, Division of Medicaid

$695,206

$6,456,560

Maine

Maine Department of Health and Human Services

$699,970

$7,151,735

Massachusetts

Massachusetts Executive Office of Health & Human Services, Office of Medicaid

$13,486,888

$110,000,000

Minnesota

Department of Human Services

$13,421,736

$187,412,620

Mississippi

Mississippi Division of Medicaid, Office of Health Services

$1,341,394

$37,076,814

Nevada

Nevada Department of Health & Human Services, Division of Health Care Financing & Policy

$800,000

$7,276,402

New Mexico

New Mexico Human Services Department, Medical Assistance Division, Long Term Services & Supports Bureau

$595,839

$23,724,360

Rhode Island

Rhode Island Department of Human Services, Division of Health Care Quality, Financing & Purchasing / Medicaid Division

$2,503,021

$24,570,450

Tennessee

Tennessee Bureau of TennCare

$2,357,733

$119,624,597

Vermont

Vermont Department of Disabilities, Aging and Independent Living

$2,123,975

$17,963,059

West Virginia

West Virginia Department of Health & Human Resources, Bureau for Medical Services

$1,267,373

$22,220,423

TOTAL

$45,497,134

$621,415,359

The White House • 1600 Pennsylvania Avenue, NW • Washington DC 20500 • 202-456-1111

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