Legislative Update

from National Family Voices:

administationTHE ADMINISTRATION
Executive Order on ACA-Related Changes
On October 12, the president issued an executive order directing the Departments ofTreasury, Labor, and Health and Human Services to consider making changes in current regulations and guidance governing health care coverage. It is important to note that the order does not in itself make any changes to current law or policy; it directs federal departments to consider making changes toward certain ends, as explained below. See The President's Executive Order: Less Than Meets the Eye? (Health Affairs Blog, 10/20/17) for a good explanation.
Association plans. The departments are directed to consider allowing insurance purchasers to form associations for the purpose of buying group insurance. Such association plans could be sold across state lines and might not be required to meet ACA standards. As a result, the plans would be less expensive, attracting healthier people. Consequently, the pool of individuals enrolled in more robust ACA plans would be less healthy, in turn making those plans more expensive. The National Academy for State Health Policy has done a report on issues related to selling policies across state lines.
Short-term policies.The executive order also directs the departments to consider lengthening the term of short-term, limited-duration health plans and allowing them to be renewable. Consumer advocates are concerned about this possibility, since such plans do not have to comply with ACA standards. Under current regulations, these plans can be in effect for less than three months.
 
Health reimbursement arrangements. In addition, the executive order directs the departments to consider revising current rules promote the use of "health reimbursement arrangements" (HRAs), through which employers can reimburse their employees for purchasing their own insurance rather than supplying employer-based coverage.
 
Kaiser Health News article and video explains the executive order and its potential implications.

Cost-Sharing (CSR) Payments
 
Hours after issuing the executive order described above, the administration announced that it would cease making "cost-sharing reduction" payments to insurers because it has determined that the payments are not authorized by law. (This question has been the subject of a long-running lawsuit brought by the House of Representatives against the Obama administration.) These payments reimburse insurers for selling health plans with reduced out-of-pocket costs to low-income consumers, as the insurers are required to do under the ACA. As a result, some insurers will stop selling in the individual market, and others will raise premiums to recoup their losses. (Some have already accounted for this scenario in their 2018 premium rates.) The Congressional Budget Office (CBO) estimated in an August report that the termination of CSR payments would have a temporary impact on the affordability of insurance for some consumers (particularly those whose incomes are too high to qualify for premium subsidies), and thus the number of uninsured. The CBO also estimated that federal costs would increase as a result of terminating CSR payments because the government would have to pay higher premium subsidies to an extent greater than the savings from not making the CSR payments. (Premium subsidies are linked to premium rates.) For more information, see Administration's Ending Of Cost-Sharing Reduction Payments Likely To Roil Individual Markets (Health Affairs Blog, 10/13/17).
As explained below, Senators Lamar Alexander (R-TN) and Patty Murray (D-WA) have negotiated legislation to appropriate CSR funds in order to resolve questions about their legality.

CongressIN CONGRESS

ACA-RELATED LEGISLATION
 
Alexander-Murray Bipartisan Bill on Insurance-Market Stabilization and CSR Payments
Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA) have finalized their negotiations on legislation to stabilize the individual health insurance market. The resulting bill has 12 cosponsors of each party and has been applauded by insurers, physicians, hospitals, and patient organizations. Nonetheless, it is unclear whether the bill will become law. Senate Majority Leader Mitch McConnell (R-KY) has said he will not bring a bill to the Senate Floor unless the president has said he will sign it. The president's messages have been mixed on the bill; he has expressed support but then demanded changes, which would not be acceptable to Democrats. Even if the bill were approved by the Senate, it could face opposition in the House, where some Members may oppose it because it "props up Obamacare." See Where the Alexander-Murray bill to patch Obamacare now stands (Politico PULSE, 10/23/17)
Among other things, the Alexander-Murray bill would:
  • Extend "cost-sharing reduction" (CSR) payments to insurers for an additional two years. These payments reimburse insurers for selling, to low-income consumers, health plans with reduced out-of-pocket costs, as the insurers are required to do under the ACA. (The administration announced it would stop making these payments after this month.)
  • Provide funding to states for outreach and enrollment efforts. (The administration had significantly reduced these efforts.)
  • Make it easier for states to alter ACA requirements under waivers from the federal government.
  • Allow all individuals (not just those under age 30) to purchase "copper" plans only catastrophic coverage.
CHIP FUNDING (update)
As reported in the October 11 Update, both the Senate Finance Committee and the House Energy and Commerce Committee approved legislation on October 4 that would extend funding for the Children's Health Insurance Program (CHIP) for an additional five years (through 2022). For more details on both bills, see the October 6 special edition of the Washington Update.
 
The Senate Finance Committee approved its bipartisan bill on a voice vote with no dissent. In the House, however, Energy and Commerce Committee Democrats voted against the bill. Although they agree with the bill's policies, they object to the "offsets" used to pay for the cost of extending CHIP. Among other offsets, the CHIP bill would change Medicaid third-party-liability rules in a manner that would jeopardize reimbursement for prenatal care and pediatric preventive services. After the committee's approval of the bill, House Energy and Commerce Committee Chairman Greg Walden (R-OR), was willing to delay efforts to advance the bill through the House in order to negotiate further with the Democrats on offsets.
 
Update:  As of this writing (Monday, October 23), those negotiations had not been successful and it is expected that the bill will be brought up for a vote before the full House this week, possibly in combination with the CHAMPION Act, the bill that includes the provision on Family-to-Family Health Information Centers (see below). Assuming there is no breakthrough on offset negotiators before the vote, the bill can be expected to pass on a partisan basis.
 
Federal CHIP funding expired on September 30. States have varying amounts of remaining funds to support the program for a few more months or more, but before their funds run out they will have to notify enrollees about potential termination of eligibility. See States may roll back children's health coverage without money from Congress (Politico, 10/23/17) for estimates of when the states will run out of funds. See also Swaying between hope and practicality as Congress remains inactive, Virginia begins dismantling children's health insurance program (Roanoke Times, 10/22/17).
 
FY 2018 BUDGET RESOLUTION (UPDATE)
 
As reported in the last Update, the House approved a FY 2018 budget resolution (H.Con.Res.71) on October 5. It calls for tax cuts and trillions of dollars in spending cuts over a decade, including to programs such as Medicaid and Medicare. The House Budget Committee website provides details about the resolution.
 
On October 16, the Senate passed its version of the resolution (H.Con.Res.71, as amended). See the Senate Budget Committee website. Like the House resolution, the Senate-passed measure calls for tax cuts and assumes nearly $5 trillion in cuts to mandatory programs (including Medicaid) over ten years, and a cut of nearly 30 percent in inflation-adjusted dollars to non-defense discretionary (appropriated) programs by 2027.
 
The Senate version of the resolution was amended at the last minute to include provisions that would make it more palatable to the House. Accordingly, it is expected that the House will adopt the Senate-passed resolution, likely this week. This will avoid the need to form a House-Senate conference committee, thus allowing Congress to take up a tax bill more quickly.
 
Once both chambers have agreed to the same resolution language, the various committees of jurisdiction will develop legislation to implement the resolution blueprint. That legislation - called a "reconciliation bill" - will enjoy special privileges in the Senate; most notably, it can be passed with 51 votes rather than the 60 votes normally needed to advance Senate legislation.
 
Pursuant to instructions accompanying the Senate resolution, the Finance Committee is directed to increase the deficit by up to $1.5 trillion over the next decade in order to make tax cuts. It would be possible for the committee to develop legislation to make tax cuts greater than $1.5 trillion and cut spending in programs under its jurisdiction to offset the excess costs of the tax cuts. The Finance Committee's jurisdiction includes Medicare, Medicaid, welfare, Social Security programs (including SSI), and much of the ACA.

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