UnitedHealth Group, both the nation’s largest health insurer and largest employer of physicians, just announced plans to continue to rapidly grow the number of physicians in its Optum division.
This week CEO Dave Wichmann told investors in the company’s fourth quarter earnings call that Optum entered 2021 with over 50,000 employed or affiliated physicians, and expects to add at least 10,000 more across the year.(For context,HCA Healthcare, the largest for-profit US health system, employs or affiliates with roughly 46,000 physicians, and Kaiser Permanente employs about 23,300.) Optum is already making progress toward its ambitious goal with the announcement last week that the company is in talks to acquire Atrius Health, a 715-physician practice in the Boston area.
As was the case with other health plans, United’s health insurance business took an expected hit last quarter due to increased costs from COVID testing and treatment, combined with rebounding healthcare utilization. Optum, however, saw revenue up over 20 percent, which drove much of the company’s overall fourth quarter growth.
Expect United, and other large insurers, flush with record profits from last year, to continue to expand their portfolio of care, digital and analytics assets(see also Optum’s recently announced plan to acquire Change Healthcare for $13B) as they looks to grow integrated insurance and care delivery offerings.
It’s part of what we expect to be a 2021 “land grab” for strategic advantage in healthcare, as providers, health plans, and disruptors look to create comprehensive platforms to secure long-term consumer loyalty.
Although only 17 states are currently reporting data on the racial and ethnic breakdown of vaccine recipients, the early data indicate that there are significant disparities in who is getting vaccinated, with the share of Black and Latino people among vaccinees lower than their share of the total population in those states.
Alarmingly, in our recent conversations with health system executives,those same disparities seem to be present among healthcare workers employed by hospitals and health systems. Anecdotally, across a half-dozen health systems we’ve spoken with in the past week, most report that they’ve had about 70 percent of their workers agree to get the first dose of the COVID-19 vaccine.
However, that number looks significantly different when broken down by race and ethnicity:on average, the uptake rate among White, Asian, and Pacific Islander workers has been closer to 90-95 percent, while among Black and Latino workers, it’s been closer to 30-40 percent. Bear in mind these are employees of health systems—in many cases they’re frontline caregivers—and given their work environments you might expect them to be less hesitant to get the vaccine.
That 30-40 percent uptake rate is very worrisome, in two ways:caregivers outside of hospital settings, especially home care and nursing home workers, likely include a larger number of workers hesitant to get vaccinated. And in the general population, among whom health literacy is presumably much lower than among healthcare workers,it’s precisely those populations who are at highest risk of COVID infection, hospitalization, and death. (A further complication: health systems made it easy for their employees to get the shot. With vaccines for the general population still scarce, at-risk populations will inevitably have the most difficult time getting signed up, even if they want the vaccine.)
If health systems are the canary in the coal mine for vaccine hesitancy rates, we’re in for a tough challenge in getting the most vulnerable populations vaccinated in the months to come.
If you, like us, wanted to reach into your television this week, tap former President Bill Clinton on the shoulder and remind him to pull up his mask while attending the inauguration, a piece by New York Times science writer James Gorman says you weren’t alone, posing the question: “Is mask-slipping the new manspreading?”
Just as every man on a plane or bus does not “manspread” into the middle seat, not every man’s mask slips off his nose. But whether you’re watching the inauguration or milling around the grocery store, it does seem that men are far more likely than women to be found with their mask dangling at their chins. Gorman notes it’s unlikely that the shape of men’s noses or their need for more air flow account for the mask-slipping.
And, examples seem to abound across the political spectrum (see also Chief Justice John Roberts at the inauguration), so it’s not a Republican or Democratic thing.It’s a man thing. Also in this category: the dude on every airline flight we’ve taken in the past year, often outfitted in a Titleist cap and Greg Norman polo, who sports a neck gaiter plucked from his ski bag instead of a real mask (despite the large body of highly publicized evidence noting the gaiters’ inferior performance).
His demeanor says, “I am paying lip service to this mask rule, but I don’t like it. Now I will pull down my gaiter and slowly nurse this whiskey and soda until we land.” Perhaps men are less afraid of catching COVID, or, as some surveys suggest, ignoring mask rules is seen as a sign of machismo. But regardless of the motivation, fellas, we need you to wear your masks.And pull them up over your nose.
As vaccine eligibility guidelines have expanded to include adults over 65, we’ve heard from several friends and acquaintances looking for the inside scoop on getting a place in line. They’ve heard that their local health system is taking appointments, but only for established patients—do we know someone at the local system who could help them (or their mother, or their aunt with Stage IV cancer) get the shot?
One acquaintance was livid that his local hospital was prioritizing established patients:“They’re just rewarding people who have already paid them money. Is that fair?” It’s likely that system was making decisions based not on prior business relationships, but rather logistics. If patients are already “in the system”, they can be contacted and scheduled through the patient portal, fill out information online, and have their doses tracked in the EMR.
As health systems have been thrust into leading frontline vaccine distribution some have recognized an unprecedented opportunity to earn loyalty by connecting current and potential patients with the vaccine.
Outreach must provide clear information around vaccine access and how eligibility decisions are made(consider the difference in message between “we’re offering vaccines to current patients only”, and “because established patients can be quickly scheduled and monitored, we are beginning with this group, and plan to expand quickly”).
Systems’ ultimate goal should be getting vaccines to as many people as possible, as fast as possible, given supply and resource constraints.
As one of his first official actions upon taking office Wednesday, President Biden signed an executive order implementing a federal mask mandate, requiring masks to be worn by all federal employees and on all federal properties, as well as on all forms of interstate transportation. Yesterday Biden followed that action by officially naming his COVID response team, and issuing a detailed national plan for dealing with the pandemic. Describing the plan as a “full-scale wartime effort”, Biden highlighted the key components of the plan in an appearance with Dr. Anthony Fauci and COVID response coordinator Jeffrey Zients.
The plan instructs federal agencies to invoke the Defense Production Act to ensure adequate supplies of critical equipment, including masks, testing equipment, and vaccine-related supplies; calls for new nationalguidelines to help employers make workplaces safe for workers to return to their jobs, and to make schools safe for students to return; and promises to fully fund the states’ mobilization of the National Guard to assist in the vaccine rollout.
Also included in the plan is a new Pandemic Testing Board, charged with ramping up multiple forms of COVID testing; more investment in data gathering and reporting on the impact of the pandemic; and the establishment of a health equity task force, to ensure that vulnerable populations are an area of priority in pandemic response.
But Biden can only do so much by executive order. Funding for much of his ambitious COVID plan will require quick legislative action by Congress, meaning that the administration will either need to garner bipartisan support for its proposed “American Rescue Plan” legislation, or use the Senate’s budget reconciliation process to pass the bill with a simple majority (with Vice President Harris casting the tie-breaking vote). Even that may prove challenging, given skepticism among Republican (and some moderate Democratic) senators about the $1.9T price tag for the legislation.
We’d anticipate intense bargaining over the relief package—with broad agreement over the approximately $415B in spending on direct COVID response, but more haggling over the size of the economic stimulus component, including the promised $1,400 per person in direct financial assistance, expanded unemployment insurance, and raising the federal minimum wage to $15 per hour.
Some of the broader economic measures, along with the rest of Biden’s healthcare agenda and his larger proposals to invest in rebuilding critical infrastructure, may have to wait for future legislation, as the administration prioritizes COVID relief as its first—and most important—order of business.
At the last minute, President Donald Trump granted pardons to several individuals convicted in huge Medicare swindles that prosecutors alleged often harmed or endangered elderly and infirm patients while fleecing taxpayers.
“These aren’t just technical financial crimes. These were major, major crimes,” said Louis Saccoccio, chief executive officer of the National Health Care Anti-Fraud Association, an advocacy group.
The list of some 200 Trump pardons or commutations, most issued as he vacated the White House this week, included at least seven doctors or health care entrepreneurs who ran discredited health care enterprises, from nursing homes to pain clinics. One is a former doctor and California hospital owner embroiled in a massive workers’ compensation kickback scheme that prosecutors alleged prompted more than 14,000 dubious spinal surgeries. Another was in prison after prosecutors accused him of ripping off more than $1 billion from Medicare and Medicaid through nursing homes and other senior care facilities, among the largest frauds in U.S. history.
“All of us are shaking our heads with these insurance fraud criminals just walking free,” said Matthew Smith, executive director of the Coalition Against Insurance Fraud. The White House argued all deserved a second chance. One man was said to have devoted himself to prayer, while another planned to resume charity work or other community service. Others won clemency at the request of prominent Republican ex-attorneys general or others who argued their crimes were victimless or said critical errors by prosecutors had led to improper convictions.
Trump commuted the sentence of former nursing home magnate Philip Esformes in late December. He was serving a 20-year sentence for bilking $1 billion from Medicare and Medicaid. An FBI agent called him “a man driven by almost unbounded greed.” Prosecutors said that Esformes used proceeds from his crimes to make a series of “extravagant purchases, including luxury automobiles and a $360,000 watch.”
Esformes also bribed the basketball coach at the University of Pennsylvania “in exchange for his assistance in gaining admission for his son into the university,” according to prosecutors.
Fraud investigators had cheered the conviction. In 2019, the National Health Care Anti-Fraud Association gave its annual award to the team responsible for making the case. Saccoccio said that such cases are complex and that investigators sometimes spend years and put their “heart and soul” into them. “They get a conviction and then they see this happen. It has to be somewhat demoralizing.”
Tim McCormack, a Maine lawyer who represented a whistleblower in a 2007 kickback case involving Esformes, said these cases “are not just about stealing money.”
“This is about betraying their duty to their patients. This is about using their vulnerable, sick and trusting patients as an ATM to line their already rich pockets,” he said. He added: “These pardons send the message that if you are rich and connected and powerful enough, then you are above the law.”
The Trump White House saw things much differently.
“While in prison, Mr. Esformes, who is 52, has been devoted to prayer and repentance and is in declining health,” the White House pardon statement said.
The White House said the action was backed by former Attorneys General Edwin Meese and Michael Mukasey, while Ken Starr, one of Trump’s lawyers in his first impeachment trial, filed briefs in support of his appeal claiming prosecutorial misconduct related to violating attorney-client privilege.
Trump also commuted the sentence of Salomon Melgen, a Florida eye doctor who had served four years in federal prison for fraud. That case also ensnared U.S. Sen. Robert Menendez (D-N.J.), who was acquitted in the case and helped seek the action for his friend, according to the White House.
Prosecutors had accused Melgen of endangering patients with needless injections to treat macular degeneration and other unnecessary medical care, describing his actions as “truly horrific” and “barbaric and inhumane,” according to a court filing.
Melgen “not only defrauded the Medicare program of tens of millions of dollars, but he abused his patients — who were elderly, infirm, and often disabled — in the process,” prosecutors wrote.
These treatments “involved sticking needles in their eyes, burning their retinas with a laser, and injecting dyes into their bloodstream.”
Prosecutors said the scheme raked in “a staggering amount of money.” Between 2008 and 2013, Medicare paid the solo practitioner about $100 million. He took in an additional $10 million from Medicaid, the government health care program for low-income people, $62 million from private insurance, and approximately $3 million in patients’ payments, prosecutors said.
In commuting Melgen’s sentence, Trump cited support from Menendez and U.S. Rep. Mario Diaz-Balart (R-Fla.). “Numerous patients and friends testify to his generosity in treating all patients, especially those unable to pay or unable to afford healthcare insurance,” the statement said.
In a statement, Melgen, 66, thanked Trump and said his decision ended “a serious miscarriage of justice.”
“Throughout this ordeal, I have come to realize the very deep flaws in our justice system and how people are at the complete mercy of prosecutors and judges. As of today, I am committed to fighting for unjustly incarcerated people,” Melgen said. He denied harming any patients.
Faustino Bernadett, a former California anesthesiologist and hospital owner, received a full pardon. He had been sentenced to 15 months in prison in connection with a scheme that paid kickbacks to doctors for admitting patients to Pacific Hospital of Long Beach for spinal surgery and other treatments.
“As a physician himself, defendant knew that exchanging thousands of dollars in kickbacks in return for spinal surgery services was illegal and unethical,” prosecutors wrote.
Many of the spinal surgery patients “were injured workers covered by workers’ compensation insurance. Those patient-victims were often blue-collar workers who were especially vulnerable as a result of their injuries,” according to prosecutors.
The White House said the conviction “was the only major blemish” on the doctor’s record. While Bernadett failed to report the kickback scheme, “he was not part of the underlying scheme itself,” according to the White House.
The White House also said Bernadett was involved in numerous charitable activities, including “helping protect his community from COVID-19.” “President Trump determined that it is in the interests of justice and Dr. Bernadett’s community that he may continue his volunteer and charitable work,” the White House statement read.
Others who received pardons or commutations included Sholam Weiss, who was said to have been issued the longest sentence ever for a white collar crime — 835 years.“Mr. Weiss was convicted of racketeering, wire fraud, money laundering, and obstruction of justice, for which he has already served over 18 years and paid substantial restitution. He is 66 years old and suffers from chronic health conditions,” according to the White House.
John Davis, the former CEO of Comprehensive Pain Specialists, the Tennessee-based chain of pain management clinics, had spent four months in prison. Federal prosecutors charged Davis with accepting more than $750,000 in illegal bribes and kickbacks in a scheme that billed Medicare $4.6 million for durable medical equipment.
Trump’s pardon statement cited support from country singer Luke Bryan, said to be a friend of Davis’.
“Notably, no one suffered financially as a result of his crime and he has no other criminal record,” the White House statement reads.
“Prior to his conviction, Mr. Davis was well known in his community as an active supporter of local charities. He is described as hardworking and deeply committed to his family and country. Mr. Davis and his wife have been married for 15 years, and he is the father of three young children.”
CPS was the subject of a November 2017 investigation by KHN that scrutinized its Medicare billings for urine drug testing. Medicare paid the company at least $11 million for urine screenings and related tests in 2014, when five of CPS’ medical professionals stood among the nation’s top such Medicare billers.
Beyond the initiatives directly tied to COVID relief, President Biden’s healthcare agenda includes a broader bolstering of the protections and coverage mechanisms in the Affordable Care Act (ACA), as well as the rollback of several of the previous administration’s regulatory changes. We’ve outlined that agenda in the graphic below, as well as highlighting key members of the Biden healthcare team.
While much will depend on how the COVID pandemic continues to unfold, and how successful Biden is at striking bipartisan compromises with a closely divided Congress, we’re watching closely for the answers to several key questions:
(1) how aggressive can and will the new administration be in unwinding Trump-era reforms, particularly regarding Medicaid work requirements;
(2) what will be the thrust of Biden’s antitrust policyin the healthcare space;
(3) how hard will Biden be willing to push for expanded subsidies for individuals purchasing insurance on the ACA exchanges;
(4) how will the Biden team build on the transparency measures implemented by the Trump administration; and
(5) how will the new administration use payment reforms and other regulations to address racial and other disparities in healthcare?
All of that preceded by one burning question that has us holding our breath: who will Biden pick to run the all-important Centers for Medicare and Medicaid Services?
This aerial photo, taken on Jan. 20, 2021, shows the construction site of the Huangzhuang quarantine center in Shijiazhuang, north China’s Hebei Province.
When authorities came to Dr. Liu Chun’s hospital in the central Chinese city of Changsha with a request for 130 volunteers, it took just two hours for all slots to be filled. As a respiratory doctor specializing in ICU patients, Liu felt it was her duty to join the group of medical workers summoned 340 kilometers north, to Wuhan, where rumors of a mysterious pneumonia-like illness had been circulating for weeks. At first, Liu, 48, wasn’t terribly worried. Her husband and 12-year-old daughter were supportive; she didn’t bother telling her elderly parents of her plans.
But when she arrived in Wuhan on Feb. 8, 2020, she saw panic on the tear-streaked faces of her team members. One colleague was busy scribbling his will. Female staff had been instructed to cut their hair brutally short and men to shave it almost entirely.
“I was a little nervous,” she tells TIME.
Liu was charged with setting up a field hospital for COVID-19 patients outside Tongji Hospital in Wuhan. The city of 11 million had been sealed since Jan. 23 in an unprecedented lockdown that was to last 76 days. Officials ordered Liu to accept 50 patients within hours of her arrival, despite a dire shortage of medicine, PPE and ventilators.
It was only then that the severity of the disease became apparent. Liu would check on patients and return within an hour to find they had quietly passed.
“It really shocked me,” she says. “We began to call it the ‘silent killer.’”
She spent a lot of time calming and counseling terrified nurses. “I began to feel the burden of looking after everyone,” Liu recalls, while fearing for her own safety, even in a hazmat suit. Whenever a bead of sweat would drip from her cheek into her mouth, “I would get that salty taste and briefly fear that I’d been contaminated.”
Liu was among the first clinicians to confront COVID-19, and the panic and confusion she felt one year ago has sadly now burdened frontline workers around the globe. As Wuhan marks the first anniversary of its unprecedented lockdown, the city’s experiences are the cause of both hope and caution as the virus again takes hold in the country where it was first discovered.
Portrait of Dr. Liu Chun at Hunan Xiangya Hospital in Changsha, China, on Dec. 1, 2020.
China has enjoyed months of relatively low coronavirus figures, but it recorded 222 new coronavirus cases on Jan. 21, following 223 on Jan. 20 and 133 the day before that. The new more infectious U.K. strain has also been detected in at least four cities. This comes just before the Lunar New Year festivities, when migrant workers all over China expect to head home to celebrate the holiday with their families. The movement of holidaymakers, involving some 200 million people, is humanity’s biggest annual migration. This year, it could be a potentially catastrophic spreader of disease.
The government is handling the resurgence with trademark ruthlessness.More than 23 million people have been ordered to remain inside their homes in northern China to stymie new outbreaks—double the number confined in Wuhan when the pandemic first erupted. A temporary quarantine center capable of housing 4,000 suspected cases has been thrown up outside the city of Shijiazhuang, just under 300 kilometers southwest of the capital Beijing. Its residents—like those of two other major cities—are forbidden from venturing outside.
According to state media, some 20,000 residents of 12 villages near Shijiazhuang were rudely awoken by sirens early last week and bused to government-run quarantine centers. Business magazine Caixin reported that in one district of Shijiazhuang, an old man was tied to a tree after venturing out to buy cigarettes, prompting the suspension of local officials.
Millions of people in five Beijing neighborhoods have now been ordered not to leave the city and to report for testing after two cases of the new variant were discovered. Shanghai meanwhile reported three cases on Thursday and has mandated the testing of all hospital staff. Arrivals from domestic high and medium-risk areas of the country are also obliged to undergo 14 days quarantine.
Zhang Wenhong, head of the city’s COVID-19 response, told reporters“These cases reminded the public that the virus has never been away from us and epidemic prevention and control will become a new normal.”
China’s ongoing fight against COVID-19
The resurgence has rendered Wuhan’s anniversary especially sensitive for the ruling Chinese Communist Party (CCP). Unhappy with accusations that officials bungled the handling of the outbreak’s early stages andsilenced whistle-blowers, the party has sought to rewrite the past year as a tale of decisive courage under strongman President Xi Jinping.
Already, there is a cavernous exhibition hall in Wuhan commemorating the lockdown, with holograms of medical staff, letters from front-line health workers and a replica of a mass quarantine site just like those now being hastily erected in Shijiazhuang. A towering photo of Xi takes pride of place by a timeline of the measures he is said to have personally taken to stem the virus’ spread. In fact, Xi was neither seen nor heard during the early stages the outbreak. Premier Li Keqiang was the public face of Beijing’s response, while on the ground the undisputed heroes were everyday people who kept shelves stocked and bellies full.
Qian Ranhao was in charge of a distribution hub for online retailer JD.com, just 3 miles from Wuhan’s Jinyintan Hospital, where some of the first COVID-19 patients were treated. He was tasked with dispatching vital supplies of masks, drugs and disinfectant to the hospital each day, sleeping in the warehouse each evening to avoid taking the virus home to his heavily pregnant wife.
“She was nervous about me because I was on the street,” Qian tells TIME. “Even when I did return eventually home, we made sure to stay in different rooms.”
Qian’s son was born safely in August, but countless tales of tragedy have been expunged from the official account. The CCP’s already formidable talent for rewriting history has been honed even further under Xi, who has removed presidential term limits and fostered a cult of personality. In recent weeks, censors have scrubbed terms like “first anniversary” and “whistleblower” from Chinese social media, where paeans from corporate sponsors exalting Wuhan’s remarkable sacrifice and recovery are instead plentiful.
A medical worker collects a swab sample from a child at a COVID-19 testing site in Daxing District of Beijing, capital of China, Jan. 20, 2021.
The GDP of Hubei province—of which Wuhan is the capital—fell 39.2% in the first quarter of 2020, but recovered strongly to post a mere 5% contraction over the cataclysmic year. Across China, official data suggests GDP grew 2.3% last year, though the economy has been extremely unbalanced. Speaking at a December forum promoting economic development along the Yangtze River, which runs through Wuhan, Wang Zhonglin, the city’s top official, entreated the residents not to “slow down efforts to work toward becoming an international metropolis.”
That the message is being painstakingly curated and controlled is underscored by last month’s sentencing to four years in prison of Zhang Zhan, 37, a citizen journalist who had chronicled Wuhan’s lockdown. Scientists are also under strict orders not to report anything that may corroborate the belief that the virus originated inside China. A WHO team belatedly arrived in Wuhan last week to investigate the source of the coronavirus, but it’s uncertain how much freedom they will have to visit places they deem of interest following their two weeks quarantine. Two of the party were denied entry after testing positive for COVID-19 antibodies.
The government has meanwhile unveiled sweeping plans to vaccinate 50 million people before the Lunar New Year holiday in mid-February, and has so far managed to inoculate 10 million. State employees have been expressly forbidden from traveling over the holiday, and officials have urged everyone else to avoid it if possible. That’s a tough ask for the many millions of casual workers for whom the holiday is their only opportunity each year to reunite with loved ones.
Some 1.7 billion trips are expected during the festival, according to China’s Transport Ministry. That represents a 40% drop on 2019 figures, and a new rule requires travelers to present a negative nucleic acid test upon arrival at their hometowns. Nevertheless, one year after the start of the Wuhan lockdown, officials must be nervous.
Gang Fang, assistant professor of biology at NYU Shanghai, says the potential for seeding outbreaks is very real and officials are well aware of the stakes.
“If officials don’t control cases in their local area they will lose their job and political career,” he tells TIME. “Controlling the virus is their most important responsibility right now.”
On January 14, 2021, Planned Parenthood Southeast and the Feminist Women’s Health Center filed a lawsuit challenging the Trump administration’s approval of Georgia’s waiver under Section 1332 of the Affordable Care Act (ACA). The lawsuit was filed in federal district court in DC. This post summarizes that legal challenge as well as parts of President Biden’s recent proposed pandemic relief package that relate to the ACA and coverage. The $1.9 trillion American Rescue Plan includes several coverage-related proposals and would follow the pandemic relief passed by Congress in December 2020.
Advocates Challenge The Approval of Georgia’s 1332 Waiver
Regular readers know that the Trump administration—through the Centers for Medicare and Medicaid Services (CMS) and the Treasury Department—approved a broad waiver request from Georgia under Section 1332 of the ACA. The approved waiver authorizes the state to establish a reinsurance program for plan year 2022 and eliminate the use of HealthCare.gov beginning with plan year 2023. CMS and Treasury approved the waiver application on November 1, 2020. The history of Georgia’s waiver application and approval is summarized in prior posts as well as in the complaint filed in the lawsuit.
The reinsurance portion of the waiver is straightforward; of the 16 states with an approved Section 1332 waiver, all but one state has established a state-based reinsurance program. But the second part of the waiver application, known as the Georgia Access Model, is far more controversial. This is the broadest waiver yet to be approved under Section 1332 and relies on interpretations of Section 1332 made in much-criticized Trump-era guidance from 2018.
Critics have long argued that Georgia’s proposal fails to satisfy Section 1332’s procedural and substantive guardrails, meaning it could not be lawfully approved by the Trump administration. Given this controversy, legal challenges to the waiver approval were expected.
The Lawsuit
Planned Parenthood Southeast and the Feminist Women’s Health Center—represented by Democracy Forward—filed a lawsuit in federal district court in DC on January 14, 2021. The lawsuit alleges that the Trump administration’s 2018 guidance and approval of Georgia’s waiver are unlawful because these actions violate Section 1332 of the ACA and the Administrative Procedure Act (APA). The lawsuit also cites many of the Trump administration’s ongoing efforts to undermine the ACA as evidence that the 2018 guidance and waiver approval are part of a pattern of ACA sabotage.
In particular, the plaintiffs argue that the 2018 guidance and waiver approval are contrary to Section 1332, exceed the scope of the agencies’ authority (by allowing states to waive non-waivable provisions of the ACA), and are arbitrary and capricious. They also argue that the waiver approval failed to satisfy procedural requirements under the ACA and APA because Georgia and the Trump administration “rushed through the process without adequate time for public comment and without adequate clarification of how the state intends to approach key issues.” Here, the lawsuit points to the fact that Georgia went through four iterations of its waiver application, that its application was incomplete, and that only eight comments (less than one half of one percent) of the 1,826 total comments submitted during the most recent federal public comment period were in support of the Georgia Access Model.
As such, the plaintiffs ask the court to vacate both the approved waiver and the 2018 guidance and declare that they are unlawful. They also ask that the federal government be enjoined from taking further action on Georgia’s waiver or considering other waivers under the 2018 guidance. The plaintiffs acknowledge that the reinsurance portion of the waiver is uncontroversial and that the focus of the lawsuit is on the Georgia Access Model; however, the plaintiffs challenge approval of the waiver as a whole and ask the court to set aside the waiver in whole or in part. The plaintiffs have not sued Georgia, although it is possible that Georgia may ask to intervene in the litigation to defend its interests.
Much of the lawsuit turns on how the Trump administration interpreted the statutory guardrails under Section 1332 and long-standing concerns about direct enrollment and enhanced direct enrollment.Federal officials can grant a Section 1332 waiver only if a state demonstrates that their proposal meets certain statutory “guardrails.”These guardrails ensure that a waiver proposal will 1) provide coverage that is at least as comprehensive as ACA coverage ( “comprehensiveness” guardrail); 2) provide coverage and cost-sharing protections that are at least as affordable as ACA requirements (“affordability” guardrail); 3) provide coverage to at least a comparable number of residents as under the ACA ( “coverage” guardrail); and 4) not increase the federal deficit. The Obama administration issued guidance in 2015 on its interpretation of these guardrails.
In 2018, the Trump administration replaced that guidance and adopted its own interpretation, which manyargued was inconsistent with Section 1332. The 2018 guidance tried to pave the way for the Trump administration to approve waivers where only some coverage under the waiver (instead of all coverage) satisfied the comprehensiveness and affordability guardrails. Under this view, waivers could be approved even if only some coverage under the waiver was as comprehensive, as affordable, and as available as coverage provided under the ACA. The 2018 guidance would also allow waivers to expand access to plans that do not have to meet the ACA’s requirements. (Separately, the Trump administration issued a final rule to codify the 2018 guidance’s interpretations into regulations.)
The lawsuit argues that the Georgia Access Model violates all four statutory guardrails because it will “drastically underperform the ACA.” The waiver proposal could lead to net enrollment losses in Georgia, which violates the coverage guardrail. The waiver could lead some consumers to enroll in non-ACA plans (such as short-term plans) with benefit gaps, which violates the comprehensiveness guardrail. And consumers will have to pay higher premiums and out-of-pocket costs through higher broker commissions, reduced competition, and adverse selection against the ACA markets, which violates the affordability guardrail and potentially the deficit neutrality guardrail (since higher ACA premiums mean higher federal outlays in the form of premium tax credits).
As health care providers in Georgia, Planned Parenthood Southeast and the Feminist Women’s Health Center allege they will be harmed for several reasons. They argue that the Georgia Access Model will make it more difficult and expensive for their patients to obtain health insurance. Fewer patients with health insurance will result in higher levels of uncompensated care. More uncompensated care will strain the plaintiffs’ resources and limit other services, such as community outreach. The loss of coverage resulting from the waiver will leave their patients in worse health and develop more complex treatment needs, making it more expensive for plaintiffs to treat those patients as a result. And approval of the waiver will make it more complicated for the plaintiffs to assist their patients with enrollment.
What Happens Next
The lawsuit was assigned to Judge James E. Boasberg of the federal district court for DC. Health policy watchers know Judge Boasberg as the judge who repeatedly invalidated the Trump administration’s approval of state Section 1115 waivers with work and community engagement requirements. He is thus no stranger to assessing the legality of waiver approvals under the APA and other federal statutes.
The lawsuit will proceed, and the Biden administration will be responsible for filing a response in court. One potential option could be for the Biden administration to ask the court for a stay while it revisits the approved waiver and perhaps holds another round of public comment on the most recent version of the waiver (which, as the lawsuit points out, was never submitted for public comment). The Biden administration could consider any new comments in reevaluating approval of the Georgia Access Model.
If the federal government newly concludes that the proposal fails to satisfy the substantive guardrails, it could have grounds to amend, suspend, or terminate Georgia’s waiver, so long as certain procedures are followed. This is because the terms and conditions of the waiver agreement between the federal government and Georgia (as well as implementing regulations) always give the federal government “the right to suspend or terminate a waiver, in whole or in part, any time before the date of expiration, if the Secretaries determine that the state materially failed to comply with the terms” of the waiver.
Georgia’s waiver agreement includes some unique terms and conditions relative to waivers in other states. Those terms seem designed to limit the federal government’s ability to suspend or terminate Georgia’s waiver. But the federal government can do so as long as it complies with relevant procedures. This includes notifying Georgia of its determination, providing an effective date, and citing reasons for the amendment or termination (i.e., why the Georgia Access Model fails to satisfy Section 1332’s substantive guardrails). Georgia would have 90 days to respond, with the possibility of providing a corrective action plan to come into compliance with the waiver conditions. Georgia must also be given an opportunity to be heard and challenge the suspension or termination.
Alternatively, the Biden administration could regularly assess and monitor the state’s compliance with the terms and conditions and its progress, or lack thereof, in implementing the Georgia Access Model. Federal officials do this with all waivers. Under the waiver approval, Georgia must, for instance, satisfy requirements related to funding, reporting and evaluation, development of an outreach and communications plan, and operational standards for eligibility determinations. If Georgia fails to comply with these terms and conditions, that too would be grounds to initiate the process to amend or terminate parts or all of Georgia’s waiver.
Coverage Provisions In Biden’s American Rescue Plan
On January 14, a few days before taking office, President Biden issued a 19-page fact sheet outlining his proposed American Rescue Plan to contain the COVID-19 virus and stabilize the economy. The announcement praised the bipartisan package adopted in December 2020 as “a step in the right direction” but notes that Congress did not go far enough to fully address the pandemic and economic fallout. Following Inauguration Day, Biden is expected to lay out an additional economic recovery plan.
Among many other initiatives, the comprehensive $1.9 trillion plan would provide funding for a national vaccination program, create a new public health jobs program, provide funding for schools to reopen safely, extend and expand emergency paid leave, extend and expand unemployment benefits, raise the minimum wage, and deliver $1,400 in support for people across the country. The Biden plan also calls for preserving and expanding health insurance, noting that 30 million people were uninsured even before the pandemic and that millions may have lost job-based coverage in 2020.
First, the American Rescue Plan calls for Congress to provide COBRA subsidies through the end of September. Presumably, these subsidies would be available from the beginning of 2021, rather than subsidizing premiums from 2020. COBRA subsidies during an economic emergency are not new. Congress subsidized COBRA premiums during the 2008 recession, with mixed results. Full COBRA subsidies were included in the original Heroes Act passed by the U.S. House of Representatives in May 2020, although not in the revised Heroes Act that was passed by the House in October 2020. But neither bill was ever taken up by the U.S. Senate. It is not clear from the fact sheet whether the Biden administration is aiming for full COBRA subsidies where the government would pay 100 percent of the premiums for COBRA coverage for laid-off workers and furloughed employees—or some other amount (e.g., 80 percent of premiums).
Second, the American Rescue Plan would accomplish one of candidate Biden’s key campaign promises by expanding and increasing the value of premium tax credits under the ACA. Democrats in Congress have repeatedly passed legislation that would accomplish what the American Rescue Plan fact sheet seems to call for. For instance, the Patient Protection and Affordable Care Enhancement Act—passed by the House in July 2020—would have expanded the availability of premium tax credits to those whose income is above 400 percent of the federal poverty level and made those credits more generous by reducing the level of income that an individual must contribute towards their health insurance premiums to 8.5 percent for those with the highest incomes. This subsidy expansion and enhancement would improve the affordability of coverage for millions of Americans who purchase coverage in the individual market.
Beyond COBRA and ACA subsidies, the American Rescue Plan calls for additional funding for veterans’ health care needs and for the Substance Abuse and Mental Health Services Administration and the Health Resources and Services Administration to expand access to behavioral health services. The proposal would also increase the federal Medicaid assistance percentage (FMAP) to 100 percent for the administration of COVID-19 vaccines to help ensure that all Medicaid enrollees will be vaccinated. The proposal does not appear to otherwise mention Medicaid, which is serving as a key safety net as incomes have dropped for millions of Americans, despite bipartisan support for an enhanced FMAP during the pandemic.
HENRY KOTULA 