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Political Law Developments to Watch For in 2013

The Election of 2012 demonstrated in the starkest possible terms how formerly unheralded nuances of federal election and tax law have the capacity to affect the fundamental underpinnings of our democracy in the most direct way possible.  Never before have the nation’s editorial pages and cable news airways been more active with analysis of the myriad ways in which the laws regulating SuperPACs, lobbying and campaign finance affected electoral results and are in need of reform.

Change is coming, and the savvy will recognize that the manifestation of this change – in whatever form it takes – will affect politicians, businesses, and activists alike.  It is with this reality in mind that the Politics, Law and Policy Blog has devoted this corner of its home page to regular analysis of these pending developments in the field of Political Law and Campaign Finance.

To initiate this project we examine the competing roadmaps to reform that have been revealed since the election.  The highest profile of which was launched November 13 by an organization known as “United Republic”.  This group boasts a diverse Board of Advisors representing Wall Street, the Occupy Movement, Jack Abramoff, former Federal Election Commission (FEC) Chairman Trevor Potter, academics, nonprofits and political operatives.  Their proposal, the American Anti-Corruption Act, provides a strong starting point to the roadmap of reform that will be debated over the coming two years.  Specifically, United Republic calls for the following series of reforms:

  • Mandate total transparency on all organizations and their donors spending $10,000 or more on political advocacy.
  • Impose severe restrictions on the ability of lobbyists to contribute to, or raise money for, Members of Congress, with a $500 cap on contributions, a ban on lobbyist bundling, and a requirement that lawmakers recuse themselves from committee hearings if they have received a contribution from a lobbyist or a lobbyist client that has a particular interest in that hearing.  Think of this as a pay-to-play law for lobbyists.
  • Expand the definition of the term “federal lobbyist” to capture greater “consulting” activities by insiders (referred to derisively by United Republic as “historical advisors”).
  • Promote small dollar, grassroots contributions by giving every citizen a $100 tax rebate for contribution to a federal candidate, party or political committee.
  • Mandate full disclosure of all campaign funds and lobbying activities.
  • Extend “cooling off” prohibitions on retiring lawmakers and senior congressional staffers to five years before those “insiders” can become a lobbyist.
  • Create a task force to examine reforms to the Federal Election Commission, the Internal Revenue Service and the congressional ethics process; and
  • Impose caps on contributions to SuperPACs and impose stricter “coordination” rules between SuperPACs and political campaigns.

Additionally, numerous groups are expected to call for reintroduction of the DISCLOSE Act (mandating increased disclosure of corporate political activity) and public finance of campaigns as an alternative to the status quo.

This will be the battlefield in the coming year.  As developments in the field of Political Law warrant, we will be discussing them in this space so be sure to check in often for updates.

Political Law Developments to Watch For in 2013

Weekly Health Policy Update: HHS Delays Exchange Deadline…Again

Weekly Health Care Wrap-Up

HHS Delays Exchange Deadline…Again

Following a letter from the Republican Governors Public Policy Committee this week asking for more time to make decisions surrounding the implementation of the Affordable Care Act (ACA), the Department of Health and Human Services (HHS) announced on Thursday that they would provide additional time for states to indicate if they will pursue a state-based exchange. In a letter from HHS Secretary Kathleen Sebelius to Republican governors, the agency indicated that states can submit both a Declaration Letter and Blueprint to HHS on December 14 for state-based exchanges.  (Previously, Declaration Letters for state-based exchanges were due today, November 16.)

Late last week, HHS extended the deadline for states to submit Blueprints for state-based exchanges until December 14 and pushed the deadline for both Declaration Letters and Blueprints for state partnership exchanges until February 15, 2013. A full recap of this week’s exchange action is available in our State of the States publication.

Ways and Means Committee Issues Subpoena to HHS

On Wednesday, the House Committee on Ways and Means issued a subpoena to HHS for information on the use of taxpayer dollars to promote the Affordable Care Act (ACA) through public relations campaigns, advertisements, polling, message testing and other similar services. Chairman Charles Boustany of the Subcommittee on Oversight and Investigations first requested information on these practices on June 1. The Committee has yet to receive a response from HHS. Read more here.


From the States

A complete roundup of this week’s action in the states is available through ourState of the States: Health Insurance Exchanges publication here.

Kansas. The Veterans Administration (VA) this week announced the expansion of its telemedicine partnership with the University of Kansas Medical Center. The pilot program, which has been underway for two years, allows veterans with mental health problems from the western part of Kansas to connect with VA physicians in Wichita.  In response to the announcement, Governor Sam Brownback said, “This is a clear example of how federal and state agencies can cooperate to deliver improved mental and health care services in a more cost-effective manner,” Brownback said of the initiative.” More information is availablehere.

Massachusetts. The state announced six organizations chosen to provide care to dual eligible beneficiaries under a new program designed to streamline coverage and financing for individuals eligible for both Medicare and Medicaid. The state is the first to move forward with the demonstration; however, approximately half of states have expressed interest in pursuing similar models. More information is available here.

Oregon. Kaiser became the first carrier to voluntarily cover Applied Behavioral Analysis (ABA) therapy for children with Autism in the state, commenting, “This behavioral health treatment will complement the existing healthcare services we already provide to children with autism spectrum disorders, such as speech, occupational and physical therapy.” Oregon does not require ABA therapy under current law.

Health Insurance Exchanges: State of the States update

After a long week that witnessed many states announcing their exchange intentions, HHS Secretary Kathleen Sebelius released a letter late Thursday afternoon extending the deadline for states to inform HHS whether they intend to create a state-based exchange. Under the new deadline, states now have until December 14 to submit their Declaration Letter and Blueprint application to operate a state-based exchange. The delay comes after the Republican Governors Association sent President Barack Obama a letter on Wednesday, November 14, requesting additional time for states to evaluate their exchange options, among other issues.  The new deadline provides some states still considering their options additional time to consult with lawmakers and staff.

As mentioned previously, this week was a busy one for our nation’s governors. Let’s review some of the most interesting action:

  • Alabama: In a statement released on Tuesday, Governor Robert Bentley (R) said “I am not going to set up a state-based exchange that will create a tax burden of up to $50 million on the people of Alabama.”  At the same time, he also said he would not expand Medicaid “under the current structure that exists.” The decision will come as a surprise to some.  In November 2011, Governor Bentley said, “As I have said many times, my vision for an Alabama health insurance exchange existed before any federal health care reform effort began.”
  • Alaska: On Tuesday, Sharon Leighow, spokeswoman for Governor Sean Parnell (R), reiterated that Alaska will not be creating a state-based exchange.
  • Arkansas: Friday afternoon, Matt DeCample, a spokesman for Governor Mike Beebe (D) told reporters that the governor will explore the possibility of creating a state-based exchange before the December 14 deadline. Currently, Arkansas has been actively planning for a federal-state partnership exchange.
  • Arizona: After hearing HHS’s new December 14 deadline, Governor Jan Brewer’s office said that the governor would take additional time to decide the future of Arizona’s health insurance exchange.
  • Illinois: In a letter sent today (Friday), Governor Pat Quinn (D) committed Illinois to developing a partnership exchange before transitioning to a state-based exchange. To quote his letter, “While we will be working with you over the next year to ensure the people of Illinois have comprehensive and affordable coverage through the Exchange, I’m committed to working with our Illinois General Assembly to pass legislation with governance and financing language that will allow us to operate a state-based Exchange beginning in 2015.”
  • Indiana: On Wednesday, Christy Denault, spokeswoman for Governor-elect Mike Pence (R), said that Indiana would not be creating a state-based exchange. However, Governor Pence will be evaluating the federal-state partnership option.
  • Iowa: On Friday, Governor Terry Branstad (R) sent a letter to Secretary Sebelius informing her that “Iowa will continue on its path to creating an Iowa-based exchange.” However, in his letter he mentioned that if he did not receive additional guidance and regulations from HHS pertaining to exchanges, he might reverse course.  “If forced to make a decision with incomplete information, then I have no choice but to default on some level to a Federal exchange,” wrote Branstad. To date, the Iowa legislature has not passed exchange legislation nor has Governor Branstad used an Executive Order to create an exchange.
  • Louisiana: In a phone interview on Tuesday night, Governor Bobby Jindal (R) told reporters that “We [Louisiana] are not implementing the exchange.” Aletter sent on Wednesday by Bruce Greenstein, Secretary of the Louisiana Department of Health and Hospitals, confirmed that view and laid out a long list of critiques.
  • Mississippi: Mississippi Insurance Commissioner Mike Chaney sent aDeclaration Letter to HHS on Wednesday stating that Mississippi would “implement and operate a state-based exchange.” In his letter, Commissioner Chaney states that he has the authority to submit an Exchange Declaration Letter on behalf of Mississippi because he is “an elected official and the chief officer of the Department of Insurance.” Previously, Commissioner Chaney and Governor Phil Bryant (R) have clashed over Mississippi’s exchange plans. Stay tuned for HHS’s response.
  • North Carolina: On Thursday afternoon, outgoing Governor Bev Perdue (D) released a statement announcing that after consulting with Governor-elect Pat McCrory (R), North Carolina would pursue a federal-state partnership exchange. The statement also mentioned that North Carolina applied to HHS on November 15 for grant funding.
  • Nebraska: On November 15, Governor Dave Heineman (R) wrote HHS Secretary Sebelius to inform her that Nebraska would “participate in the federally-facilitated health insurance exchange.” In his letter he wrote that the cost of operating a state-based exchange was too high. Interestingly, in prepared remarks, the governor said that based on estimates, “the cost of a state insurance exchange for Fiscal Years 2013-2020 is $646 million; while the cost of a federal insurance exchange is $176 million.” Included in a packet of documentation posted along with the letter and remarks, there was a top-line comparison of the costs of operating a state-based exchange versus a federally-facilitated exchange.
  • Ohio: In a letter today to Gary Cohen, Director of CCIIO, Governor John Kasich (R) wrote that “Ohio will not operate a federally-mandated exchange but instead will exercise its right under the law to leave that to the federal government.” Governor Kasich also wrote that Ohio would like to retain its right to regulate its insurance market and will not turn over Medicaid or CHIP eligibility determination to the federal government. Finally, Governor Kasich’s letter states that, “Ohio reserves the right to amend its intentions as stated in this letter, should HHS announce any changes or present states with new information, rules or interpretations of the law.”
  • South Carolina: On November 15, Governor Nikki Haley (R) wrote Secretary Sebelius to inform her that South Carolina “should not and will not set up a state-based health care exchange.”
  • Tennessee: In a statement released by Governor Bill Haslam (R) today (Friday), the governor reiterated that no decision on exchanges had been made. Instead he hoped that “in the coming weeks we will receive answers from Washington to the many questions we’ve asked in our effort to have a full picture of the future of exchanges in Tennessee.”
  • Wisconsin: In a letter today to Secretary Sebelius, Governor Scott Walker wrote that “after much consideration and outreach with citizens across the state, and in the best interest of the taxpayers of Wisconsin, we have determined Wisconsin will not develop a partnership or state-based exchange.”

A chart tracking states plans for exchanges can be found in the attached PDF. News will continue to break regarding state exchange decisions over the coming hours. Following the Thanksgiving holiday, we will be back with a comprehensive recap of where the states stand.

Finally, this week in California, the Board for the California Health Benefit Exchange approved a $706 million Level Two grant submission to HHS. According to the Exchange’s plan, by the end of 2014, the Exchange will have 1,161 employees. Of that total, the Exchange envisions that roughly 860 positions will be in a “Customer Service” role. Also of interest, the Exchange is planning a multimillion “Outreach and Marketing” campaign that will cost $88 million in 2013, $129 million in 2014 and $100 million in 2015.

Weekly Health Policy Update: HHS Delays Exchange Deadline…Again

Weekly Health Policy Update: Exchange Blueprints Deadline Extended

Weekly Health Care Wrap-Up

Election Leaves President Obama in White House, Democrats in Senate, Republicans in House

The balance of power in Washington, DC remains unchanged following Tuesday’s elections, with President Obama winning re-election, Democrats maintaining control in the Senate and Republicans holding their majority in the House. Specifically, the 113th Congress will see 53 Democrats, 45 Republicans and 2 Independents in the Senate. The final division in the House remains unclear, with several House races still outstanding; however, it appears Democrats will likely gain seats, but still leave House Speaker John Boehner with a sizeable majority. In the Senate, all eyes will be on Maine Independent Senator-Elect Angus King who has yet to decide if he will caucus with Republicans or Democrats. The Senate’s other Independent, Bernie Sanders, caucuses with the Democrats. For more information on the 2012 election and for a recap of the MLA Campaign Textbook Series, visit our blog here.

Congress returns to Washington, DC next week, where the focus will be the looming Fiscal Cliff. Meanwhile, health care industry insiders will focus on several key committees of jurisdiction over the coming weeks, with vacancies to be filled on the Senate Finance Committee and other shuffling likely in light of retirements, election losses and leadership term limits. Stay tuned.

Key Regulations Arrive at OMB

In what is likely to be the beginning of a flurry of regulations related to the Affordable Care Act (ACA), rules related to Essential Health Benefits and actuarial value have landed at the Office of Management and Budget (OMB) for review. It remains unclear if the timeline for implementation of the ACA will shift over the coming weeks and months; however, HHS issued its first delay todaywith regard to the deadlines surrounding exchanges. Nevertheless, stakeholders should expect a host of regulations in the near term related to the health care reform law.


From the States

A complete roundup of this week’s action in the states is available through ourState of the States: Health Insurance Exchanges publication here.

Republicans continue to control a majority of statehouses and legislatures following Tuesday’s election. Specifically, 30 states and 26 legislatures are under Republican control, compared to 18 and 19 respectively for Democrats, with Washington’s gubernatorial race still undecided.

Meanwhile, states will face a host of questions and decisions related to the ACA over the coming weeks. States are in the process of determining their approach to exchanges under the ACA, while it remains unclear how many states will expand Medicaid under the law. Moreover, states continue to wait for guidance regarding essential health benefits and are in the process of responding to final regulations released last week on the Medicaid primary care increase.

Health Insurance Exchanges: State of the States update

With Tuesday’s elections behind us and today’s letter from HHS Secretary Kathleen Sebelius, states now have additional time to evaluate their exchange options and notify HHS if their choice is to pursue a state-based exchange, a partnership exchange with the federal government, or have the fall-back of a federally-facilitated exchange operate in their state. Previously states that had delayed making a formal exchange decision were racing to evaluate their options and submit their Blueprint by next Friday, November 16. Today’s letter from Secretary Sebelius gives states that are interested in applying for a federal-state partnership exchange until February 15, 2013 to submit both their Declaration Letters and Blueprints. States pursuing a state-based exchange still need to notify HHS of their intention by November 16 via Declaration Letter, but now have until December 14, 2012 to submit their Blueprint. In her letter, Secretary Sebelius also wrote that HHS intends to issue additional guidance in the near future. A copy of the letter is included in our PDF.

These new deadlines give governors and legislators additional time to reevaluate their stance on the exchange issue, something that many governors have requested. Here’s a brief post-election recap of what some of the nation’s governors have said regarding their exchange plans:

Kansas: In a statement released Thursday afternoon, Governor Sam Brownback (R) said that his state would not pursue a federal-state partnership. Brownback said in the release, “My administration will not partner with the federal government to create a state-federal partnership insurance exchange because we will not benefit from it and implementing it could costs Kansas taxpayers millions of dollars.” The announcement came shortly after Governor Brownback met with Insurance Commissioner Sandy Praeger and informed her of his decision. In preparation for the November 16 deadline, Commissioner Praeger had been preparing to submit a Blueprint application seeking federal approval to enter into a federal-state partnership.

Missouri: With voters passing a referendum that gives the choice over exchanges firmly to the state’s legislature, Governor Jay Nixon (D) has few options ahead of the November 16 deadline. “Based on the constraints of federal law and the quickly approaching federal deadline, the only option for Missouri at this time is to indicate that we will be unable to proceed with the state-based exchange – absent a change in circumstances,” said Nixon. After the 2012 elections, both the House and Senate remain under Republican control. Tom Dempsey, the newly nominated Senate President Pro Tem, said on Thursday that Republican legislators plan to discuss the exchange issue next week during a private meeting.

Nebraska: After Tuesday’s election, Governor Dave Heineman (R) said that he is still unsure which exchange option Nebraska would pursue and that he will take his time to make a decision. “We know one piece of the puzzle,” said Heineman. As Governor Heineman considers his options, the state has taken some steps toward an exchange. In particular, Nebraska released an RFP to procure an IT system for the exchange on October 15.

Ohio: On Thursday, Greg Moody, director of the Governor’s Office of Health Transformation, told reporters “By November 16 we have to send a Blueprint indicating our direction, and we’re leaning toward that being a federal exchange with the state retaining some authority to oversee health plans.” Moody also said that Ohio would like to retain the authority to regulate health insurers and determine eligibility for the state’s Medicaid program.

Tennessee: On Wednesday, Governor Bill Haslam (R) told reporters that he would be evaluating his options before making a decision on exchanges. In reference to the looming November 16 deadline to submit a Blueprint to HHS, he told reporters, “We’re going to take the nine days to look for answers and do our homework and then we’ll make a decision.”  Previously, Governor Haslam expressed interest in Tennessee running its own exchange, but that view found little support in the state legislature. However, in his comments on Wednesday, he expressed the role of the legislature in potentially creating a state-based exchange saying, “If we say yes, it still has to have the legislature approve it, and we could also then anytime back out and change our mind.”

Virginia: In a press conference on Wednesday, Governor Bob McDonnell (R) said that Virginia would have a federally facilitated exchange. “At this point, without further information, the only logical decision for us is to use the federal option.”

Wisconsin: Governor Scott Walker (R) has been meeting with various cabinet officials this week to determine what to do about the state’s health insurance exchange. After meeting with advisors on Wednesday, Governor Walker told reporters that he was torn on the exchange issue. “There’s a part of me that looks at a state-run [exchange] and says, ‘I don’t want to give up anything I don’t have to [give up] to the federal government,’ just instinctively,” Walker said. But at the same conference with reporters, he also said “It might be a better argument to let it be run by the federal government because the risk you run is if a state runs it and eventually money goes away from the federal government, you might expose state taxpayers to picking up more of that cost.” Wisconsin’s exchange planning halted earlier this year under direct order from Governor Walker.

New Mexico: Finally, last Friday afternoon, the New Mexico Health Insurance Alliance (NMHIA), on behalf of the State of New Mexico, released an IT RFP to procure a state-based exchange. In the RFP, the State of New Mexico is seeking vendors to manage the information technology and systems integration for the implementation and establishment of a state-based Health Insurance Exchange (NMHIX). The NMHIX solution will include services for eligibility, enrollment, Small Business Health Options Plan (SHOP), and “shop and compare” information technology systems. Responses are due by November 30 and NMHIA is aiming to award the contract by January 7, 2013. Publicly, Governor Susana Martinez (R) has not announced whether she intends for New Mexico to develop an exchange, but she has expressed support for the concept of an exchange in the past, despite vetoing legislation to create an exchange in April 2011. At the time, Governor Martinez said she vetoed the legislation because it was not clear how much an exchange would cost. Since Tuesday’s election, the Governor has not made a statement on her exchange decision.

Wondering which states have submitted Declaration Letters so far? This week’s map shows which states have submitted Declaration Letters or have entered into serious, public discussions with HHS on forming a partnership exchange.

Weekly Health Policy Update: Exchange Blueprints Deadline Extended

Elections 2012: MLA’s Campaign Textbook Series

This election season, members of our Public Policy and Government Affairs and Political Law practices provided an exclusive look at the 2012 Campaign Trail in a unique call series.

MLA’s Campaign Textbook Series provided a quick and informative way to learn what was really happening behind the scenes in the races this fall. Each week, our bipartisan team of campaign gurus went beyond the usual rhetoric and shared a perspective that only decades of political experience can bring to understanding campaign strategy and operations.

Today we held our final call: Election Results. Members of our government affairs team discussed the outcome of the 2012 Elections and the campaign elements that led to Tuesday’s results.

We invite you to click on the below recordings to listen to past calls.

  • Conventions – Why they still matter
  • The Importance of Money – Funding for the general election
  • The Path to 270 – Role of swing states
  • Ground Game_ Organizing the field
  • Air War – Winning the message
  • Debate Month – Getting ready
  • Down Ballot – Why the top of the ticket matters
  • Balance of Power – The Congressional races
  • Swing State Update

We are also pleased to invite you to our Post Election Discussion on November 15 (in person or via webinar) focusing on the results of the elections and near-term implications for the business and political environment in the U.S. Please click here for more information. Please RSVP to jbcarey@mckennalong.com.

Elections 2012: MLA’s Campaign Textbook Series

2012 Election Results and Post Election Discussion

With the 2012 elections concluded, we are pleased to provide this recap of the Presidential, Congressional, and State race results.

We also invite you to click here to download a full report from our updated 50 State Resource Center, a comprehensive database focusing on economic and political affairs in all 50 states, including information on elected officials, key players in state legislatures, election updates, and economic news.

We are also pleased to invite you to our Post Election Discussion on November 15 (in person or via webinar) focusing on the results of the elections and near-term implications for the business and political environment in the U.S. Please click here for more information. Please RSVP to jbcarey@mckennalong.com.

2012 Election Results and Post Election Discussion

Cybersecurity – What’s Next After the Election?

There is widespread recognition that we must adopt new policies, laws and regulations to identify and monitor cyber threats, protect our cyber infrastructure and IT systems, share information among government agencies and between the private sector and the government, and develop effective means for responding to cyber attacks. The cybersecurity bills introduced in the 112th Congress are testament to this reality. Unfortunately, the House bills reflect a piecemeal approach to reform, and the more comprehensive measure sponsored by Senator Lieberman has become mired in seemingly intractable politics.  Many people are hopeful that, regardless of the outcome of today’s elections, Congress will take some action in the lame duck session to address cybersecurity.  Given the short time remaining before the convening of the 113th Congress, the already crowded legislative agenda, hyper-partisan political environment and self interests of members of Congress when they resume business on November 13, it seems unlikely that meaningful cybersecurity legislation will pass and become law before sometime next year under the best of circumstances.  For a summary of the key issues in and impediments to passage of cybersecurity legislation, see Cybersecurity Legislation in the Lame Duck Session of Congress—What’s Next, 98 FCR 525 (November 6, 2012).

Cybersecurity – What’s Next After the Election?