CQ HealthBeat’s John Reichard is reporting that HHS officials are staying “mum” on the structure of the health insurance exchanges that the federal government will erect in states that decide not to establish their own insurance market places by 2014, declining to say when that decision would be announced or even if it would be made this year:

A big question is how the federal government will run exchanges and specifically whether it will be an active purchaser, meaning it can deny insurers a place in the exchange if they don’t offer consumers a good deal. The recent HHS-proposed regulation on exchanges did not say.

[Steve Larsen, director of the Center for Consumer Information and Insurance Oversight] said Thursday that “we will be releasing further guidance in some form — it’s not clear whether it will even have to be a regulation — that would clarify how we will be setting up an exchange or portions of an exchange.” “I can’t describe for you now the particular time frame,” Larsen added. “I can only say that we know that’s an issue that has to be resolved.”

One possibility is that HHS would give the markets inside exchanges a chance to stabilize before becoming an active purchaser, Larsen said… Starting out with what’s called an “open model” — in other words, one in which exchanges don’t exclude insurers based on the prices they charge — is “certainly part of the mix of thinking about which model” the federal government will employ, Larsen said. It’s possible that both the federal government and state governments could decide to start with an open model and make a transition to becoming an active purchaser later, he said.

Progressive health advocates who have long hoped that states — and the federal government — would follow the models of Massachusetts and California in establishing exchanges that could keep out inefficient or poorly designed health care plans and bargain on behalf of its beneficiaries. Still, not all states will have the luxury of denying entrance to inefficient providers, however. States “that sit in highly concentrated insurance markets are limited in how selective they can be,” and states in which the exchange represents a small part of the commercial market will also have little leverage, as will states with a sicker risk pool.

But despite all this, the feds would be smart to adopt a more aggressive purchasing model and set robust consumer protections and standards. Not only would such an approach help meet the goals of the exchanges — connecting individuals and families with affordable health care options — but it would also discourage some states from abandoning their own exchanges in favor of the federal option. HHS would face substantial cost increases as conservative governors who are reluctant to build exchanges in the first place begin to see the federal exchanges as an ideologically agreeable (and cheaper) alternative.

The the final debt ceiling package may serve as a reminder of President Obama’s shaky commitment to individual health insurance mandate, a central provision of the Affordable Care Act that he opposed while campaigning for office. “It’s true that some people could game the system by just waiting till they get sick and then they show up,” Obama admitted in 2008. “But keep in mind that my plan also says children will be able to stay on their parents’ plan up until the age of 25. And so I don’t believe that there are a whole bunch of folks out there that will not get coverage.” He claimed that people who can’t afford insurance shouldn’t be required to purchase it and dismissed economists who argued that allowing individuals to remain uninsured would encourage younger and healthier Americans to avoid buying insurance and drive up the costs of coverage.

This morning, NBC’s First Read reported that President Obama may be pivoting back to his campaign position in the contentious debt ceiling negotiations and agreeing to eliminate the individual mandate if Congress can’t produce a long-term entailment and tax reform package:

The Obama White House and House Speaker John Boehner are now this close to reaching a “grand bargain” deal. That framework includes spending cuts, plus entitlement changes and increased tax revenues (as part of a tax overhaul) that would come later. But there are two big hurdles left: 1) on the substance, and 2) on soothing egos. On the substance, the most contentious matter is how you “trigger” the provisions to guarantee completing tax and entitlement reform. The Democrats have offered a trigger of letting the Bush tax cuts expire for those making $250,000 or more. Republicans, meanwhile, have countered that if those Bush tax cuts are hanging in the balance, they’d offer a trigger of their own to ensure Dem action: scaling back Obama’s health-care law and eliminating the mandate. Bottom line: If entitlement and tax reform is completed on time, then the Bush tax cuts and the health-care law don’t get touched.

Repealing the mandate would take much of the health care law down with it. The first to go would be the popular consumer protections that require insurers to provide coverage for people with pre-existing conditions and prohibit them from pricing older people out of the market. Without younger and healthier people paying monthly premiums — and why would anyone spend their healthier years writing out a monthly premium check if the neighbor across the street can obtain the same coverage for the same rate on a need-it-now basis — costs would skyrocket, forcing the government to spend more on subsidies and increasing premiums for millions of beneficiaries. After New Jersey attempted to eliminate preexisting conditions without a universal mandate in 1993, for instance, the cost of the most generous individual insurance plans rose by more than 350 percent. In Maine, many insurance providers doubled their premiums in three years or less and New Hampshire experienced an exodus of insurers.

And so tinkering with the coverage provision or even offering it up as a possible trigger, would not only deliver a victory to opponents of reform, but it would also roll back the coverage expansions in the Affordable Care Act — one study found that a plan similar to the ACA that excluded a mandate would cover less than 20 million uninsured. That would not only undermine the Democrats’ historic accomplishment, but it would also erect the very kind of price barriers that candidate Obama warned against and promised to eliminate as President.

Sen. John Barrasso (R-WY) explains why he thinks employers will drop coverage as a result of the Affordable Care Act in today’s Deseret News:

Under the law, businesses are permitted to drop out of paying for employer-provided coverage so long as they pay a fine of $2,000 per employee. This number is far smaller than the $15,000 it costs businesses to provide family health benefits to each of their employees. Small businesses face an even clearer incentive to drop coverage for their employees. They are not required to pay this fine for the first 50 workers who lose coverage.

But economists and economic studies disagree. They argue that Barrasso’s calculation of whether or not dropping coverage and paying the employer penalty in ACA would be more financially beneficial to employers is too simplistic. Once businesses account for other factors — firms would need to compensate workers from whom they remove a current benefit, offering insurance helps recruit top tier employees — they find that the cost per employee actually increases. As the Urban Institute explains, “[T]here is little scope for firms being able to save money from dropping ESI [employer sponsored coverage] coverage except perhaps in firms where most workers have low wages as well as low family incomes, and these types of firms are the least likely to offer ESI today.”

For that reason, the Congressional Budget Office estimates that “the number of people obtaining coverage through their employer would be about 3 million lower in 2019 under the legislation” and actuaries at CMS found that just 1.4 million would move out of employer coverage. In fact, a comprehensive review of all the available employer surveys concluded that “the ESI market will be fairly stable after 2014 when key ACA coverage provisions go into effect.” The only analysis that found otherwise (Douglas Holtz-Eakin’s effort) relied on Barrasso’s simplistic model:

Interestingly, Barrasso attributes his claims to just two sources, “a study co-authored with my colleague, Sen. Tom Coburn (R-OK)” and “a June study by McKinsey and Company.” Barrasso’s study speaks for itself, but the now-debunked McKinsey survey has been all but abandoned by the company. As McKinsey explained after the public outcry, the survey “was not intended as a predictive economic analysis of the impact of the Affordable Care Act. Rather, it captured the attitudes of employers and provided an understanding of the factors that could influence decision making related to employee health benefits.”

Yesterday, NPR’s Diane Rehm hosted a debate about the IOM’s recommendations that health care plans offer a wide array of reproductive services, including contraception, without additional co-pays. While the report has generally met with positive reviews, some on the right have argued that the IOM’s guidelines would increase abortions — by encouraging more women to have sex — or cover medications that induce abortions.

But during Rehm’s program, Helen Alvare — a George Mason University professor who opposes the policy — highlighted the real issue that’s causing some anti-choice conservatives to condemn the IOM: contraception:

REHM: One final question for you Helen. This one comes from Erin in Springfield, MO. Do you believe in birth control at all?

ALVARE: The–umm–to me, my specialty and the only thing I’ve brought to the table today and I assume others did too is what we know about the relationship between–uh–what the law does here in defining preventative care and what the conclusion is, and I guess if everybody here wanted to have a conversation about philosophical and theological beliefs we could do that.

REHM: But do you believe in birth control?

ALVARE: I think that that is a way of dodging my evidence and I would rather someone ask a question about the evidence I’ve brought to the table today.

Americans United for Life President Charmain Yoest had a strikingly similar reaction recently when challenged about why her organization — which drafts model legislation banning abortion for the states — does not promote access to safe contraception. Yoest first dismissed the question by saying that there are “differences of opinion” about expanding access to birth control, but then claimed that the issue is a “red herring.”

The goal of anti-abortion activists is to restrict access to both abortions and contraception. But to go after the latter, they try to conflate it with the former and flare up abortion fears even where none exist.

Gov. Rick Scott’s (R-FL) dogged insistence on rejecting federal funds associated with the Affordable Care Act may cause some 340,000 Floridians to “miss out on an estimated $60 million in health-insurance rebates next year,” Carol Gentry of Health News Florida reports. The money is part of the law’s medical loss ratio (MLR) provisions, which aim at tamping down industry profits by requiring insurers that don’t spend 80 to 85 percent of premium dollars on health care to reimburse policy holders. Florida’s insurance department (OIR) initially requested “a waiver of the rebates for companies operating in this state,” but is now calling for a phase in of the rule:

Consumer groups are angry, accusing OIR of protecting insurers at the expense of the public. In a May 25 letter to the Department of Health and Human Services, five of them asked for a public hearing . [...]

If the waiver is granted, limits on MLR in Florida’s individual market would be 68 percent for this year, 72 percent next year and 76 percent in 2013. Not until 2014 would companies have to comply with the provisions of the 80-percent spending rule in the act. [...]

Customers who have the most riding on the HHS decision are the 118,000 individual policyholders of Golden Rule Insurance Co., a subsidiary of the giant United Health Group. Estimates based on data from 2009 and 2010 indicate that if the Obama administration doesn’t grant a waiver, Golden Rule would owe Floridians $32.8 million next year.

Scott has turned down millions of health care funds, arguing that Florida would not accept federal grants from a law that he sees as unconstitutional. But this time, “the money doesn’t come from taxpayers, but from insurers. Those who would receive the money are self-employed workers and others who don’t have access to a group plan.”