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ZOOMING OUT ON THE ACA — When the Affordable Care Act passed in 2010, some experts feared employers would pull back on health insurance offerings.

One prediction came from the nonpartisan Congressional Budget Office, which estimated that between 5 and 20 million fewer people would be covered through their employers by 2019.

New research from the nonprofit Employee Benefit Research Institute signals — in time for open enrollment season on the exchange — the prediction didn’t come to pass. Between 2014 and 2022, institute researchers found that more people had access to benefits, as the share of eligible workers rose 5 percentage points.

A “small erosion” in coverage availability occurred right after the law passed, but that was followed by growth in the share of employers offering coverage. In 2022 overall, 81 percent of workers in the private sector were eligible for health benefits.

“It is highly unlikely that larger and medium-sized employers will conclude that offering their own health plan is not crucial to the attraction and retention of workers,” Paul Fronstin, who directs health benefits research for EBRI, wrote in the report.

Still, the overall share of employers offering benefits has fluctuated over the years and fallen slightly from 2010. When the law was passed, nearly 54 percent of employers provided health benefits compared with about 48 percent in 2022, according to EBRI. Large employers have been far more likely to offer coverage — with nearly all doing so.

A slightly smaller share of small companies with 24 or fewer employees have offered coverage since 2013, but coverage has ticked up for employers with 24 or more workers and fewer than 1,000. Fronstin wrote that smaller employers have little reason to add benefits when the exchanges offer workers subsidized coverage.

Looking forward: Fronstin argued that a recession and individual coverage health reimbursement arrangements, or ICHRAs, could make employment less tied to health coverage. The Biden administration has yet to reverse the 2019 ICHRA rule allowing employers to provide tax-exempt subsidies to help workers purchase Obamacare plans, puzzling left-leaning health care advocates.

Gerald Kominski, a professor emeritus of health policy at UCLA, told Pulse EBRI’s findings suggest “the ongoing resilience” of the employer-based market despite warnings that it could face challenges from ACA marketplaces.

As more than 9 million people have been booted from Medicaid amid unwinding after the Covid-19 public health emergency ended, the Biden administration has encouraged those losing coverage to look to exchanges, which could boost enrollment in such plans.

WELCOME TO THURSDAY PULSE. We’re intrigued by unverified reports of a kangaroo roaming Baltimore. Reach us at [email protected] or [email protected]. Follow along @_BenLeonard_ and @ChelseaCirruzzo.

TODAY ON OUR PULSE CHECK PODCAST, host Evan Peng talks with POLITICO health care reporter Kelly Hooper, who explains the Affordable Care Act open enrollment process and changes for 2024, such as higher premiums and different plan choices, and how federal, and in some cases state, subsidies are expected to shield most enrollees from cost hikes.

UP FOR A VOTE — The Senate Finance Committee will vote today on two nominations to serve on the board of the

Tricia Neuman, senior vice president of KFF, and Demetrios Kouzoukas, former CMS Medicare director in the Trump administration, are the nominees.

The two trustee seats on the board — which consists of the secretaries of Health and Human Services, Labor and Treasury; the commissioner of Social Security; and two public trustees — have been vacant for eight years. The board’s duties include reporting on Medicare’s solvency each year.

Potential resistance: In a September hearing, Sen. Elizabeth Warren (D-Mass.) threatened to oppose Kouzoukas’ nomination if he didn’t resign from the board of Clover Health, which offers Medicare Advantage plans, because of the potential conflict of interest.

“If you do not withdraw, given the clear conflicts … I will strongly oppose your nomination and will encourage every other senator in this body to do so,” Warren said.

Kouzoukas later responded that while Clover has an interest in HHS payment decisions, the board doesn’t make policy. He said the Social Security Administration found no conflict of interest due to his financial interests, and he discussed the situation with HHS and SSA, which told him it would be “consistent with ethics laws” to keep his board position.

In a letter to Kouzokas on Wednesday, Warren said his responses raised “additional concerns” and called for him to withdraw his nomination if he doesn’t resign from the board.

OMB TAKES STEPS ON AI ORDER — The White House’s Office of Management and Budget laid out more details Wednesday of how President Joe Biden’s sweeping artificial intelligence plan will look in practice and is seeking comment from the public.

The health care industry has largely backed Biden’s executive order, released Monday, but questions remain about the next steps. OMB’s proposed memorandum for agency and executive department heads offered more clarity, saying that agencies including HHS have until Aug. 1, 2024, to implement minimum guardrails for AI that impacts rights or safety. If they don’t meet those benchmarks, the agencies must stop using the technology.

According to OMB, AI impacts safety when the technology adversely affects human life or well-being, including bodily harm and mental health. And AI impacts rights when it affects access to health care and social services, including decisions on diagnosis, health risk assessments and insurance processes.

If AI falls under those categories — whether the technology is new or already in use — agencies must undertake an AI impact assessment, including testing it in the real world and ensuring it will “advance equity, dignity, and fairness” by the deadline.

RANSOMWARE SETTLEMENT — A company that provides medical management services, including billing, settled with HHS after a large ransomware attack, Chelsea reports.

The settlement is for $100,000 after the attack that affected the protected health information of more than 206,000 people.

According to the settlement, OCR will continue to monitor the company over the next three years to ensure HIPAA compliance and require a corrective action plan. Doctors’ Management Services didn’t have to admit guilt in the settlement.

Why it matters: The settlement marks the first time OCR has settled a ransomware case. Health data breaches reported to HHS’ Office for Civil Rights have soared in 2023 and are on pace to double last year’s total.

According to OCR, ransomware attacks reported to the office have increased by 278 percent in the past four years. Hacking accounts for 77 percent of large breaches reported to OCR, the agency said.

Doctors’ Management Services filed a breach report with HHS in 2019 — after an attack in 2017 that the company didn’t detect until December 2018. According to OCR, its investigation found potential failures by the company to have a system in place to identify vulnerabilities in protected health information.

“We take this very seriously,” Tim DiBona, Doctors’ Management Services CEO, told Pulse.

FIRST IN PULSE: SENATE CYBER GROUP — Sens. Bill Cassidy (R-La.), ranking member of the Senate HELP Committee, and Mark Warner (D-Va.), chair of the Senate Intelligence Committee, are teaming up to create a health care cybersecurity working group.

Along with Sens. John Cornyn (R-Texas) and Maggie Hassan (D-N.H.), the lawmakers aim to look for policies to address cybersecurity in the sector within the Health, Education, Labor and Pensions Committee’s jurisdiction.

“We are seeing a disturbing rise in cyberattacks on our health care system. These attacks not only put patients’ sensitive health data at risk but can delay life-saving care,” Cassidy said in a release.

The Cassidy-Warner pairing is potentially a boon for Warner’s cybersecurity package, which could set minimum standards for cybersecurity in health care.

Dan Ziegler will lead House Speaker Mike Johnson’s policy department. At Williams and Jensen, he’s lobbied for PhRMA, Pfizer, Novo Nordisk and other health care clients.

Ethan Jorgensen-Earp is now director of federal government affairs at Nomi Health. He was previously a senior policy adviser at Holland & Knight LLP.

Suchi Saria discusses in JAMA if AI can detect sepsis early.

STAT reports on rising infant mortality.