Tag Archive: House v. Burwell

Immediate ACA repeal rhetoric mooted as Trump administration issues rulemaking to reinforce law’s individual market reforms

With only about six weeks left to enact any comprehensive replacement for the Patient Protection and Affordable Care Act, the Trump administration has sent a clear signal it won’t happen this year by introducing proposed rules today reinforcing the law’s individual insurance market reforms rather than a wholesale repeal of the omnibus statute. The Market Stabilization rulemaking is a confidence building measure aimed at calming nervous individual health plan issuers as they plan their market participation for 2018 amid worries over adverse selection.

The rulemaking comes just 10 days after President Trump said in a televised interview his administration’s comprehensive successor to the Affordable Care Act would take the rest of 2017 and likely into next year to finalize and move through Congress. That’s realistic considering the Affordable Care Act contains ten titles and runs more than 2,000 pages. It will take time to determine which to keep, which to amend and which to eliminate — and attract sufficient support from across the aisle for any overhaul.

The proposed rule would more closely conform individual coverage to employer-sponsored and Medicare coverage by establishing the plan year 2018 open enrollment period as November 1 to December 15, 2017. The rulemaking would require those seeking to enroll outside this period to provide documented evidence of life events such as a change in family status or loss of employer sponsored coverage. It also would make it easier for health plan issuers to collect lapsed premium payments upon renewal, liberalizes the actuarial value definitions of all but silver plans as well as network adequacy standards.

The proposed rule also indicates the federal government plans to revise the timeline for the certification of qualified health plans (QHPs) sold on state health benefit exchanges and rate review process for plan year 2018. “In light of the need for issuers to make modifications to their products and applications to accommodate the changes proposed in this rule, should they be finalized, we would issue separate guidance to update the QHP certification calendar and the rate review submission deadlines to give additional time for issuers to develop, and states to review, form and rate filings for the 2018 plan year that reflect these changes,” the Centers for Medicare & Medicaid Services (CMS) stated. Comment on the proposed rule is due March 7, 2017.

The issuance of the proposed rule renders moot campaign rhetoric leading up to the November 2016 elections to immediately repeal the Affordable Care Act and highlights the lack of a ready Republican plan to replace the law. The party’s opposition is less about genuine policy differences but more about ongoing hard feelings arising from the process (versus substance) of the Affordable Care Act’s enactment in early 2010 that essentially steamrolled then minority Republicans. With no clearly articulated GOP policy alternative, there cannot be a true policy debate.

Congress and the administration have incentive to back off the immediate repeal talk given the likelihood they’d face political blow back from payers and providers vexed by the enormous uncertainty of gutting the law without a clear replacement as well as constituents fearing their coverage might be disrupted. The political consequences of inchoate policy outweigh any immediate policymaking in Congress, particularly since unhappy voters could punish some members of Congress in the 2018 mid-term elections.

In addition to this proposed rule, expect Congress to make a rapid appropriation to stave off another issue threatening the stability of the individual market stemming from ongoing hard feelings over the law’s enactment its implementation by the Obama administration: House v. Burwell. An appropriation is necessary because a federal court ruled in that case funding for out of pocket cost sharing subsidies for low income households purchasing silver plans on state health benefit exchanges requires an appropriation by Congress and that the required appropriation is absent. The House of Representatives challenged the constitutionality of the Obama administration’s funding of the subsidies without an explicit appropriation by Congress. Implementation of the federal court ruling is on hold until at least this month as it’s not expected the Trump administration will pursue an appeal.

 


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. 

Action on ACA individual market reforms successor must come in Q1 2017 to avoid messy market meltdown

Heading into this year’s elections, the individual health insurance market segment developed signs of instability as health plan issuers were pulling back their market presence for 2017 and reassessing their plans for 2018 and beyond. The election that sent Donald Trump headed to the presidency and afforded his party the opportunity to implement their stated policy to quickly repeal the Patient Protection and Affordable Care Act piled uncertainty on top of uncertainty for health plan issuers.

It’s unclear how much of the Affordable Care Act the incoming Trump administration and Congress will gut. However, it is clear that first in their sights are the individual health insurance market reforms contained in Title I of the expansive law. With these reforms first in line for the chopping block, there is no luxury of time to contemplate a gradual transition for the individual market. Congress and the new administration will have to quickly come to a consensus in the first quarter of next year.

As has been widely reported, Congress and the Trump administration could defund the bulk of the reforms using a budget reconciliation bill requiring a simple majority vote, thereby avoiding a Democratic filibuster. But that would only create more market uncertainty, crashing the old Affordable Care Act market rules before new ones could be put in place. Even more comes from the House’s successful court challenge this year of the Obama administration’s funding of out of pocket cost sharing subsidies for many lower income households buying coverage on state health benefit exchanges. It would take effect very early in the Trump administration if the administration as expected opts not to pursue an appeal, prompting health plan issuers to bail from state health benefit exchanges in 2017 and leave millions without coverage. These circumstances underscore the fact that under the Affordable Care Act, health plan market participation is voluntary. If plan issuers can’t predict their finances with any degree of certainty, all bets are off.

Health plan issuers need to begin pulling together their individual market offerings for plan year 2018 early next year. It will be difficult if not impossible for them to do so with the market rules up in the air. Lacking any certainty in the first quarter of 2017, a transition to a new scheme won’t happen in 2018. New policy will have to be nailed down in that critical first quarter. With the Affordable Care Act individual market rules well established, it’s now impossible to quickly unscramble the Obamacare omelet and turn the calendar back to 2009.

 


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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