February 15, 2013

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In This Issue
It’s That Time Again: Exchange Deadline Round…3?
Exchanges—Get Ready Because Here They Come!
Stop the HIT Bill Dropped
State of the Union
Tavenner May Be a Go
The Second Most Common Story in Recent Washington Updates
What We're Reading
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State of the Union

President Obama addressed the Congress and the American people on Tuesday night in giving his State of the Union Address. Just in case you do not want to sift through the text of the speech, here is a breakdown of what issues the President covered in graphs and a link to NAHU’s press release on the speech.

President Obama, who has set many political records, set yet another one during Tuesday’s speech as it had the lowest viewer ratings since Bill Clinton’s 2000 address. On Tuesday night, only 33.5 million people on 16 different networks tuned in to hear the President speak. Too bad because, while the media had a field day in capturing Vice President Joe Biden, Speaker of the House John Boehner (R-OH) and Senator Marco Rubio (R-FL) at their not so flattering moments, some substantive and notable statements were made by the President. 

Somewhat surprisingly, President Obama barely mentioned his healthcare during this address with reforms to programs such as Medicare occupying the healthcare spotlight on Tuesday night. Healthcare did not even make the Washington Post’s5 Takeaways from the State of the Union. Perhaps his boldest and most memorable healthcare comment of the evening was “Already, the Affordable Care Act is helping to slow the growth of healthcare costs”, which was also a comment that sent political fact-checkers running for their charts and graphs. While health reform implementation is still in its early stages, most would agree it is too soon to claim that the law, as a whole, is slowing the growth of healthcare costs. In fact, licensed health insurance agents and brokers know all too well that since PPACA has been implemented, the cost of the average insurance plan has increased by almost $3,000 even before some of the laws most expensive provisions go into effect.

However, fact-checkers will tell you that President Obama was not completely off base. According to CMS, healthcare spending in 2011, the year after health reform was passed, did slow down for the first time in 52 years. This decline began in 2008 before substantive health reform discussions were even occurring. The slowed spending is likely due to increased cost-shifting to consumers and decreased state government assistance. This downward trend will likely not continue, as CMS has projected that once the law is fully implemented, health spending is expected to reach nearly $4.6 trillion by 2019, with a growth rate of 6.3% per year as opposed to the 6.1% growth rate pre-reform.

Senator Marco Rubio delivered the GOP response to the State of the Union. Rubio, who is most known these days for his work on immigration reform, is considered to be one of the GOP’s rising stars and a potential 2016 presidential nominee. Rubio highlighted several times in his speech that he still lives in a middle class neighborhood and opposed many of the President’s policies, not because he wants to protect the rich but, because he wants to protect his neighbors. He responded to the Presidents healthcare comments by stating, “Obamacare, it was supposed to help middle-class Americans afford health insurance. But now, some people are losing the health insurance they were happy with. And because Obamacare created expensive requirements for companies with more than 50 employees, now many of these companies aren’t hiring. Not only that, they’re being forced to lay people off and switch from full-time employees to part-time workers.”

While President Obama may have jumped the gun in saying that PPACA has slowed healthcare costs, Senator Rubio may be guilty of healthcare misstatements as well. In his response, Senator Rubio noted that as a result of the law seven million people will lose their insurance coverage this year coming year, and by that we assume he meant the projections which indicate that at least seven million employers will drop coverage. However, with the one million new people expected to be added to employer rolls in 2013, more young people under the age of 26 remaining on their parent’s insurance and the negligible impact of the coverage reforms 2014 due to plan-year implementation of many provisions, the decline of coverage to employer-based insurance probably will not take effect until 2015. But Senator Rubio was not far off in his response when he claimed that the 50-person employer mandate provision of the law would hinder employers from expanding their businesses. In fact, franchisees such as Tasti D-Lite and Applebee’s have already come out and stated that the mandate will hinder their franchise growth. Healthcare reform may not be fully implemented just yet, but it is clear that members of both parties seem to have a skewed vision of what is to come.

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