VII. Key Issues: Regulation & Reform >> C. Health Reform >> Affordable Care Act (ACA) >> ACA and Government >> ACA and the Federal Government (last updated 6.18.16)
- 1 ACA Administration
- 2 ACA Regulations
- 3 ACA Financing
- 4 ACA and Medicare
- 5 ACA and Medicaid
Dozens of New Entities Created Pursuant to the Patient Protection and Affordable Care Act. “The Patient Protection and Affordable Care Act (PPACA, P.L. 111-148, March 23, 2010) creates, requires others to create, or authorizes dozens of new entities to implement the legislation. Some of these new entities are offices within existing cabinet departments and agencies, and are assigned certain administrative or representational duties related to the legislation. Other entities are new boards and commissions with particular planning and reporting responsibilities. Still others are advisory bodies that were created to study particular issues, offer recommendations, or both. Although PPACA describes some of these new organizations and advisory bodies in detail, in many cases it is currently impossible to know how much influence they will ultimately have over the implementation of the legislation.” Appendix lists known new entities. (Congressional Research Service, 7.15.10)
Coordinating Council for Comparative Effectiveness Research
- Federal Coordinating Council for Comparative Effectiveness Research (list of members). Authorized by the American Recovery and Reinvestment Act (ARRA), this new Council will help coordinate research and guide investments in comparative effectiveness research funded by the Recovery Act. The council’s first report to the President and Congress was made in June, 2009.
Patient-Centered Outcomes Research Institute (PCORI)
PCORI is authorized by Congress to conduct research to provide information about the best available evidence to help patients and their health care providers make more informed decisions. PCORI’s research is intended to give patients a better understanding of the prevention, treatment and care options available, and the science that supports those options.
- In June 2012, PCORI’s Board of Governors announced the new institute’s first funding initiative: $30 million for 50 Pilot Projects focused on research methods, including those for engaging patients and other stakeholders in health research. The work was intended to help establish a foundation for patient-centered comparative effectiveness research aimed at giving patients, caregivers, clinicians, and other stakeholders the information and tools they need every day.
- These projects, most of which began in the fall of 2012, are now well under way; the first of their findings to be available late in 2014.
Research and Analysis
- Cannon, Michael F. A Better Way to Generate and Use Comparative-Effectiveness Research, Cato Institute Policy Analysis no. 632, February 2, 2009.
- Gottlieb, Scott. Patient-Centered Outcomes Research Institute’s efforts could leave Obamacare boosters stressed out (7.31.14). “PCORI has attracted a skilled leadership team that rivals many similar private institutions. But even with its talent, and its $3.5 billion, ten-year trust fund – financed off a tax on Medicare and private health plans – PCORI never had enough resources to fund the rigorous kinds of clinical trials that would actually inspire change in clinical practice. It never aimed to make grants on a scale to accomplish this mission. Its proponents and opponents alike didn’t want it to. Proponents didn’t really want definitive clinical answers, just policy screeds that government payers could peg decisions to. And opponents didn’t really want to see it work at all.” The cost of this sort of research, done right, can be enormous, easily topping $100 million a study. Yet PCORI’s largest grants are in the neighborhood of $10 million. It always meant one of two things: Either PCORI would try to do these studies on the cheap — yielding results that would be utterly unconvincing. Or the agency would avoid the tough medical questions altogether. PCORI has chosen both journeys.
Independent Payment Advisory Board (IPAB)
- Independent Payment Advisory Board. IPAB (or the Board) is charged with developing proposals to “reduce the per capita rate of growth in Medicare spending.” The Secretary of Health and Human Services (the Secretary) is directed to implement the Board’s proposals automatically unless Congress affirmatively acts to alter the Board’s proposals or to discontinue the automatic implementation of such proposals.
- Federal Health Reform News. A Congressional Research Service (CRS) report was released Jan. 2, 2014 entitled Upcoming Rules Pursuant to the Patient Protection and Affordable Care Act: Spring 2013 Unified Agenda and examines the Spring 2013 edition of the Unified Agenda and identifies proposed and final rules and long-term regulatory actions that were expected to be issued pursuant to the ACA in the 12 months following its publication. To identify those upcoming rules and actions, CRS searched all fields of the Unified Agenda (all agencies) using the term “Affordable Care Act,” focusing on the proposed rule and final rule stages of rulemaking, as well as the “long-term actions” category. In this edition, agencies reported 20 proposed rules and 23 final rules that they expect to issue pursuant to the ACA within the 12 months following the Agenda’s publication. Agencies also reported a total of 13 long-term regulatory actions and 17 completed actions. Having a sense of what rules agencies are going to issue and when they are going to issue those rules can help Congress to provide oversight over the regulations that are issued pursuant to the ACA. The rules that agencies issue pursuant to the ACA are expected to have a major impact on how the law is implemented.
- As of March 2013, more than 20,000 pages of rules related to the ACA had been released, a stack of paper 7 feet 3 inches high and weighing more than 300 pounds.
Quality of Regulations
- Even though the individual mandate will impose significant burdens on individuals and employers, AAF reports “the only regulatory analysis of the individual mandate is through the Paperwork Reduction Act. The administration estimates that 36 million Americans would spend 12.6 minutes complying with the mandate, for a total of 7.5 million hours annually. Beyond that figure, however, there are no other estimates for the regulation’s economic impact.
- Similarly, AAF reports: “The employer mandate dodged regulatory analysis completely. The Small Business Administration (SBA) criticized the paucity of analysis: “Specifically, the SBA Chief Counsel for Advocacy stated the proposed regulations imposed a collection because they require employers to maintain records.” There are no listed costs, benefits, or paperwork requirements in the employer mandate regulation. The administration ignored the SBA, and the public has little knowledge of the law’s broader impact.
- American Action Forum (AAF) calculates that as of March 2013, these regulations imposed $31.3 billion in regulatory costs and liabilities, as well as 71.5 million hours of paperwork.
- As of March 2014, AAF updated its estimates, concluding: “the law has imposed more than $27.2 billion in total private sector costs, $8 billion in unfunded state burdens, and more than 159 million paperwork hours on local governments and affected entities. What’s more troubling, the law has generated just $2.6 billion in annualized benefits, compared to $6.8 billion in annualized costs. In other words, the ACA has imposed 2.5 times more costs than it has produced in benefits.” All told, compliance with paperwork burdens requires 79,518 full-time-equivalent workers.
- In January, 2016, AAF found that the ACA’s 106 regulations “will cost businesses and individuals more than $45 billion and will require approximately 165 million hours of paperwork in order to comply. In addition to these regulations, hundreds of guidance documents regarding the ACA have been published by various federal agencies during this time as well. However, more regulations—and additional costs—are still to come. Regulations for one of the most expensive and burdensome provisions of the ACA—the ‘Cadillac Tax‘—have yet to be written. Guidance documents were published last year, but a final rule may not be published for a few more years given that the implementation date of the tax was recently delayed until 2020. The cost of each ACA regulation published so far has averaged $426 million and required 1.6 million hours of paperwork.”
- By February, 2016, AAF reported that “in 2008, HHS imposed roughly 412 million hours of paperwork, up sharply from 152 million hours in 1995. By 2016, however, with the help of hundreds of new ACA regulations, HHS’s paperwork burden has increased to roughly 700 million hours, an increase of more than 300 million hours since President Obama took office… There are now 86 new paperwork requirements related to the ACA, according to the administration, and one that would revise its current cost burden from $0 to more than $41.8 billion. The hourly cost of compliance, according to simple division, is approximately $14,000. This incredible cost estimate would more than double HHS’s current regulatory cost burden… According to regrodeo.com, the ACA’s regulatory burden has already topped $45.5 billion and HHS has imposed $53.5 billion in costs since 2009.”
Federal law requires agencies to estimate the paperwork burden created by rules and regulations. This 2013 publication reflects a survey of the new burdens created by the Affordable Care Act by the agencies’ own estimates. All in all, the annual burden of compliance is estimated to be 189,882,836 man-hours, while the one-time burden is projected to be 78,957,868 hours. (Ways and Means, Education, and the Workforce, Energy and Commerce Committees, May 2013)
Proposed Rules for 2016
Health Affairs (11.23.14). “On November 21 CMS published its massive 2016 Notice of Benefit and Payment Parameters (BPP) Proposed Rule with accompanying fact sheet. It also published the draft 2016 actuarial value calculator and draft actuarial value calculator methodology for 2016. Finally, CMS published a guidance on hardship exemptions for certain individuals.
Not to be outdone, the Department of the Treasury, Internal Revenue Service released its final regulation on Minimum Essential Coverage and other Rules Regarding the Shared Responsibility Payment for Individuals, together with a Notice regarding Individual Shared Responsibility Payment Hardship Exemptions that May be Claimed on a Federal Income Tax Return Without Obtaining a Hardship Exemption Certificate from the Marketplace and a Revenue Procedure setting out indexed adjusted percentages of income that will be used for determining the level of contributions expected of individuals before premium tax credits become available, the affordability threshold for the shared responsibility payments unaffordability exemption, and the threshold for determining whether employer coverage is affordable for purposes of determining eligibility for tax credits.
Finally, the Office of Personnel Management released a lengthy proposed rule proposing modifications in the multi-state plan program. These rules, proposed rules, and guidances will be addressed in a series of posts over the next several days. This post will address primarily the consumer-facing provisions of the BPP proposed rule, focusing on changes in benefits. A second post will follow, discussing the provisions of the rule more relevant to insurers, such as proposed changes in the reinsurance, risk adjustment, and risk corridor rules. A final post will discuss the IRS rule, which is primarily a finalization of proposals and guidances already made public, and the OPM multi-state plan rule.”
- Implementing Health Reform: 2016 Benefit And Payment Parameters Proposed Rule, Consumer Provisions; Hardship Exemptions. (Health Affairs, 11.23.14)
- Implementing Health Reform: 2016 Benefit And Payment Parameters Proposed Rule, Insurance Provisions. (Health Affairs, 11.23.14)
- Implementing Health Reform: Minimum Essential Coverage And The Multi-State Plan. (Health Affairs, 11.24.14)
- DHHS, Center for Consumer Information & Insurance Oversight. Regulations and Guidance.
- Consumer Support and Information
- Content Requirements for Plan Finder
- Pre-Existing Condition Insurance Plan (PCIP)
- Early Retiree Reinsurance Program (ERRP)
- Health Insurance Marketplaces
- Minimum Acceptable Risk Standards
- Premium Stabilization Programs
- State Innovations
- Consumer Operated and Oriented Plan (CO-OP) Program
- Health Insurance Market Reforms
- Registration for Technical Assistance Portal. This portal serves as an information hub for CMS technical assistance related to Marketplace and Premium Stabilization programs. Registration is free. Registered users can view and register for upcoming technical assistance sessions. Registered users can access the Library, FAQs, training resources, and the inquiry tracking and management system.
Key Components of ACA Financing
Part of ACA’s costs are financed through higher taxes and the balance through Medicare savings. See ACA and Taxes for a detailed description of each tax and its expected impact.
- Tax Timeline (NAHU) gives an overview of the taxes created by the health care legislation and when they go into effect (member-only link).
- ObamaCare Watch, Taxes has news related to ACA taxes.
- Research and Analysis: Taxes
- AMA, Taxes and Credits in the Health System Reform Law
- IRS, Affordable Care Act Tax Provisions provides a description of each provision and links to further resources detailing each.
- New taxes under PPACA (Kiplinger)
- Obamacare and Taxes: The Final Tab (Americans for Tax Reform)
- Research and Analysis: Medicare Savings