Fiscal Cliff Deal: Removed Support for Co-ops

Econintersect:  One of the many details buried in the 157 pages of the fiscal cliff deal bill (the “American Taxpayer Relief Act of 2012” or ATRA) is a provision that cuts 90% of the portion of the funding that has not been committed to support the formation of non-profit healthcare insurance cooperatives.  The following is banner for a co-op organized by the Worchester Massachusetts Chamber of Commerce:

Here is the section of ATRA that removed support for the formation of healthcare insurance co-ops:

Page 129

17 SEC. 644. CONSUMER OPERATED AND ORIENTED PLAN PRO18
GRAM CONTINGENCY FUND.
19 (a) ESTABLISHMENT.—The Secretary of Health and
20 Human Services shall establish a fund to be used to provide
21 assistance and oversight to qualified nonprofit health insur22
ance issuers that have been awarded loans or grants under
23 section 1322 of the Patient Protection and Affordable Care
24 Act (42 U.S.C. 18042) prior to the date of enactment of
25 this Act.

Page 130

1 (b) TRANSFER AND RESCISSION.—
2 (1) TRANSFER.—From the unobligated balance
3 of funds appropriated under section 1322(g) of the
4 Patient Protection and Affordable Care Act (42
5 U.S.C. 18042(g)), 10 percent of such sums are hereby
6 transferred to the fund established under subsection
7 (a) to remain available until expended.
8 (2) RESCISSION.—Except as provided for in
9 paragraph (1), amounts appropriated under section
10 1322(g) of the Patient Protection and Affordable Care
11 Act (42 U.S.C. 18042(g)) that are unobligated as of
12 the date of enactment of this Act are rescinded.

According to the following excerpt from Life Health Pro, the act rescinds $1.8 billion that had been appropriated to support the formation of healthcare insurance co-operatives:

The National Alliance of State Health CO-OPs (NASHCO) recently reported that the U.S. Department of Health and Human Services (HHS) has awarded $1.8 billion of the $3.8 billion in authorized CO-OP funding to CO-OP organizers in 24 jurisdictions.

The funds were used (and would have been used) for loans to support the start of nonprofit, member-owned health insurance cooperatives that would serve the individual market, the small group market, or both.

Insurance companies must be happy with what has happened.

Note and Editor’s comment: Econintersect has not yet located the NASHCO report mentioned above.  However, in October GEI News reported (from other sources) that loans had been made to support the establishment of 22 healthcare co-ops.  It was reported at that time that the 22 co-ops and 24 states were apparently able to determine and satisfy PPACA (Patient Protection and Affordable Care Act of 2010 aka Obamacare) requirements while 26 states claimed to be unable to get adequate direction from the federal government to do the same.  The two groups were essentially divided along party lines.  Those who agree with something can figure it out – those who do not agree will shrug.  Does this remind you of how children behave?

Here is a complete listing of all Healthcare provisions of ATRA (HR 8 page 4):

TITLE VI—MEDICARE AND OTHER HEALTH EXTENSIONS
Subtitle A—Medicare Extensions
Sec. 601. Medicare physician payment update.
Sec. 602. Work geographic adjustment.
Sec. 603. Payment for outpatient therapy services.
Sec. 604. Ambulance add-on payments.
Sec. 605. Extension of Medicare inpatient hospital payment adjustment for lowvolume
hospitals.
Sec. 606. Extension of the Medicare-dependent hospital (MDH) program.
Sec. 607. Extension for specialized Medicare Advantage plans for special needs
individuals.
Sec. 608. Extension of Medicare reasonable cost contracts.
Sec. 609. Performance improvement.
Sec. 610. Extension of funding outreach and assistance for low-income programs.
Subtitle B—Other Health Extensions
Sec. 621. Extension of the qualifying individual (QI) program.
Sec. 622. Extension of Transitional Medical Assistance (TMA).
Sec. 623. Extension of Medicaid and CHIP Express Lane option.
Sec. 624. Extension of family-to-family health information centers.
Sec. 625. Extension of Special Diabetes Program for Type I diabetes and for Indians.
Subtitle C—Other Health Provisions
Sec. 631. IPPS documentation and coding adjustment for implementation of MSDRGs.
Sec. 632. Revisions to the Medicare ESRD bundled payment system to reflect
findings in the GAO report.
Sec. 633. Treatment of multiple service payment policies for therapy services.
Sec. 634. Payment for certain radiology services furnished under the Medicare
hospital outpatient department prospective payment system.
Sec. 635. Adjustment of equipment utilization rate for advanced imaging services.
Sec. 636. Medicare payment of competitive prices for diabetic supplies and elimination
of overpayment for diabetic supplies.
Sec. 637. Medicare payment adjustment for non-emergency ambulance transports
for ESRD beneficiaries.
Sec. 638. Removing obstacles to collection of overpayments.
Sec. 639. Medicare advantage coding intensity adjustment.
Sec. 640. Elimination of all funding for the Medicare Improvement Fund.
Sec. 641. Rebasing of State DSH allotments.
Sec. 642. Repeal of CLASS program.
Sec. 643. Commission on Long-Term Care.
Sec. 644. Consumer Operated and Oriented Plan program contingency fund.

John Lounsbury

Sources:

• Fiscal cliff bill slams CO-OPs, creates LTC panel (Allison Bell, Life Health Pro, 01 January 2013)

• HR 8 aka  American Taxpayer Relief Act of 2012

• Insurers, Some States and Co-op Plans Moving Forward with Obamacare (GEI News, 05 October 2012)