Tag Archive: House budget reconciliation recommendations

The American Health Care Act isn’t Trumpcare. It’s a big bargaining chip.

The House budget reconciliation bill that makes radical fiscal tweaks to the Patient Protection and Affordable Care Act is not Trumpcare. Rather, it’s a major element of the Trump administration’s negotiation strategy to replace the Affordable Care Act as President Trump promised during the presidential campaign last year. Having business but no public policy background, Trump approaches policymaking as a sale and negotiation. Various analyses such as this one in today’s New York Times have concluded older people – who vote in greater numbers than younger ones — will come out a lot worse under the House reconciliation bill than the Affordable Care Act’s means tested (versus age-based) premium and out of pocket cost subsidies.

Those electors are pissed at that prospect and they’re showing up at Congressional district town halls to let their representatives know. Majority Republicans in Congress and the Trump administration know they are – and that they vote — and apparently intend to leverage that circumstance. The Republicans are essentially telling minority Democrats play ball and give us some support on a broader omnibus reform measure to succeed the Affordable Care Act, or else we’ll push this albatross of a reconciliation bill through since you lack the votes to filibuster it in the Senate. Without some Democratic support, any omnibus reform measure introduced as a regular (and not budget reconciliation) measure could be talked to death in the Senate by opposition Democrats.

It short, it’s a high stakes game of partisan chicken. The GOP is effectively saying to the Dems, unless you work with us and call off the Senate filibuster dogs, we’ll both potentially face the wrath of the voters in the 2018 midterm elections. The Trump administration is also developing a BATNA (Best Alternative to a Negotiated Agreement) if Democrats won’t come to the table. It’s the administration’s proposed Market Stabilization rulemaking intended to bolster the individual health insurance market and keep plan issuers in the market for plan year 2018.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

House reconciliation measure aims at getting young invincibles into individual risk pool

To help stabilize the individual medical insurance market, a critical provision of the House budget reconciliation measure concentrates its carrots and sticks on the so-called young invincibles aged 30 and younger to encourage them to get into state risk pools. First the carrot. It would allow individual (and small group) medical plans issuers to charge most senior members up to five times more than the most junior versus the current limitation of three times. That would reduce premiums paid by younger members. The stick? A 30 percent surcharge on premiums if a member has not maintained continuous medical coverage when they apply. Sign up late, pay extra.

If enacted, it will take some time to determine whether these two mechanisms will ensure the actuarial viability of the individual segment, the most fraught of the two plan types. Health plan issuers have complained that the individual risk pool is imbalanced with too many people over age 50 as well as an excess of those in poor health and utilizing a lot of medical care. A continuous enrollment incentive would theoretically get younger and presumably healthier and lower utilizing people into the risk pool.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Quick look at House budget reconciliation recommendations on Affordable Care Act

The committee print of recommended legislative provisions to amend the Patient Protection and Affordable Care Act using the Congressional budget reconciliation process is out today. The budget reconciliation measure marks the beginning of the Trump administration’s efforts to overhaul at least Titles I and II of the Affordable Care Act. Health and Human Services Secretary Tom Price indicated additional legislation will be necessary in a letter to the chairmen of the two House committees processing the reconciliation bill, The Washington Post reported. Here is a quick roundup of its provisions:

Medicaid

  • Establishes per capita state plan funding formula.
  • Ends expanded Medicaid eligibility option for states at the end of 2019.
  • Provides $2 billion annually from 2018 to 2022 to non-expansion states for higher federal cost shares, allocated based on the number of state residents earning less than 138 percent of federal poverty.
  • Requires states to make eligibility determinations every six months.

Other provisions

  • Repeals reduced cost sharing subsidies for silver actuarial value qualified individual health plans for households earning between 100 and 250 percent of federal poverty.
  • Establishes a $100 billion “Patient and State Stability Fund” for years 2018 through 2026 to assist states cover high risk individuals and reimburse health plan issuers for claims exceeding $50,000 and up to $350,000 starting in 2020. States would be required to contribute to the fund, with the amount increasing each year.
  • Authorizes individual and small group health plan issuers to levy a 30 percent premium surcharge for individuals who fail to maintain continuous medical coverage.
  • Increases the allowable spread for age as a premium rating factor between the oldest and youngest plan members to 5 to 1 from the current 3 to 1.
  • Repeals the annual fee on health plan issuers.
  • Eliminates income-based advance premium tax credits paid to health plans for exchange purchased plans effective January 1, 2020 and instead authorizes age-based tax credits, payable in advance to health plans.
  • Zeros out the penalties for noncompliance with the individual and employer shared responsibility mandates effective January 1, 2016.
  • Increases the maximum annual health savings account contribution to the amount of the annual deductible and out of pocket limitation.
 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

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