In 2012, the Medical Loss Ratio (MLR) provision of the Affordable Care Act saved consumers approximately $2.1 billion, mostly in the form of reduced premiums, according to the Kaiser Family Foundation. The provision requires insurers to spend a certain percentage of their enrollees’ premiums on health care services and quality-improvement efforts, thereby limiting the portion that can be retained in profits or spent on administration and marketing. Insurers who do not meet the benchmarks must issue rebates to their enrollees; such rebates amounted to an estimated $1.1 billion last year.  Since the majority of savings are thought to be from premium reductions rather than rebates, however, the report noted: “Perhaps ironically, when the MLR provision is working as intended and insurers set premiums to meet the thresholds, consumers save money but are less likely to get a check in the mail as tangible demonstration of those savings.”

In its 2013 annual report, Medicare’s board of trustees indicates that Medicare’s hospital insurance (Part A) trust fund will remain solvent until 2026. As of last year’s annual report, the trust fund was expected to be exhausted 2 years earlier. The new projections are based on current law, including the implementation of cuts to physician payments dictated by the sustainable growth rate formula and the approximately 165 provisions of the Affordable Care Act related to the financing and delivery of Medicare services. The updated projection should therefore not be read as the trustees’ “most likely expectations of actual Medicare financial operations,” notes the board, but rather as “illustrations of the very favorable impact of permanently slower growth in health care costs.”  The report calls for “timely and effective action” to resolve the financial challenges plaguing Medicare, which currently has more than 50 million enrollees and spent more than $574 billion in 2012.

Last week, the Obama administration released its final rule for workplace wellness programs. Updating the relevant 2006 regulations, the rule enhances employers’ ability to provide incentives to their employees for engaging in healthy behavior. Wellness
programs can be either participatory — providing no reward for performance (for example, an offer of a free gym membership) — or health-contingent — rewarding
employees with reductions in the cost of their health insurance premiums for completing
an activity such as participation in a walking program or achieving a particular health outcome, such as quitting smoking.  Concurrent with the rule’s release, RAND
issued a report on the current state of wellness programs, stating that approximately half of all employers with more than 50 employees offer some type of wellness program, which “can help contain the current epidemic of lifestyle-related diseases.”

On May 21, the Senate Judiciary Committee passed a bill (S.744) that would provide a
pathway for citizenship for 11 million undocumented immigrants. It is expected to come before the full Senate next week. Before the committee’s action, the possibility of expanding the benefits of health care reform to undocumented immigrants had been taken off the table as part of a bipartisan effort to keep immigration reform alive. At the same time, House Republicans are tinkering with legislation that would require undocumented immigrants to obtain health insurance before gaining full citizenship status. Some observers have noted the political complications faced by such a move, drawing parallels between the proposal and the ACA’s individual mandate to obtain insurance coverage, which the GOP-led House has strongly opposed and voted to repeal yet again on May 16.  Meanwhile, a new report reveals that between 2002 and
2009, immigrants paid $115 billion more into Medicare than the program paid for
their medical expenses.

Last week, a number of appellate courts, including the 7th Circuit Court of Appeals, heard oral arguments related to the Affordable Care Act (ACA) provision requiring employers to cover (without cost sharing) certain preventive care, including FDA-approved contraceptive methods. Some nonprofit religious groups were afforded an exemption last year from fulfilling these requirements by the August 2012 deadline. Now, some for-profit employers, including the Oklahoma-based crafts-store chain Hobby Lobby and Grote Industries of Indiana, are seeking a similar exemption from the contraception-coverage mandate, contending that it conflicts with their religious beliefs. Many observers expect that one of the approximately 59 challenges to this mandate, which assert that it violates a variety of constitutional rights as well as the Religious Freedom Restoration Act, will eventually make its way to the Supreme Court.

As of May 23, health care professionals can use the Cobas Integra 800 Tina-quant HbA1cDx assay (Roche) to diagnose diabetes, which affects an estimated 25.8 million people in the United States. Although other glycated hemoglobin tests have been on the market for monitoring blood glucose and have been used unofficially for diabetes diagnosis, this is the first product to receive FDA approval to be marketed for the purpose of diagnosing the disease. Alberto Gutierrez of the FDA’s Center for Devices and Radiological Health remarked that “providing health care professionals with another tool to identify undiagnosed cases of diabetes should help them provide patients appropriate guidance on treatment before problems develop.”

As states continued to prepare for the January 1, 2014, deadline for launching their health insurance exchanges, California, the country’s most populous state, announced last week which insurers would be participating in its exchange and the expected premiums for individuals enrolling in their plans. Nearly three dozen insurers submitted bids to provide health coverage through Covered California — the state’s exchange that will operate as a one-stop shop for the 5.3 million Californians expected to receive federal subsidies to purchase health insurance — and 13 were selected.  Exchange leaders touted the rates proposed for the individual market as a “home run for consumers in every region of California.”  Consumers Union (the policy and action division of Consumer Reports) praised the exchange’s move, stating that its publicizing of this information “will make it dramatically easier for consumers to compare plans and make smart choices that fit their budget.”

On Wednesday, May 15, on 91-to-7 vote, Marilyn Tavenner became the first Senate-confirmed administrator of the Centers for Medicare and Medicaid Services since 2006. Tavenner has been serving as acting administrator of the $800 billion agency since December 2011, when her predecessor, Don Berwick, resigned after it became clear that Senate confirmation was politically infeasible. Though Tavenner enjoyed a rare level of bipartisan support throughout the nomination process, her confirmation was unexpectedly delayed by Senator Tom Harkin (D-IA) because of his concerns about the redirection of funding from prevention efforts to implementation of health care reform. The American Medical Association was among the many groups that applauded Tavenner’s confirmation, expressing its intent to “work with the administrator to strengthen the Medicare system to improve health outcomes for patients and the practice environment for physicians.”