Federal Activities in Healthcare Reform
Reform activity at the federal level seems to be following the adage: death by a thousand cuts. Legislators and agencies are steering well clear of any talk of ACA “repeal” or “replace” and instead, are taking many small actions, any one of which is minor, but taken as a whole, are beginning to impact the ACA as we have come to know it.
Examples of recent actions:
- The tax reform bill just signed into law eliminates, in 2019, the ACA’s individual mandate penalty, but not the individual mandate.
- The Department of Health and Human Services:
- Has proposed a reinterpretation of the rules governing Association Health Plans, making it much easier for employers to join AHP’s and bypass many ACA regulations. This article outlines the possible impacts of such a move.
- Is taking a relaxed approach towards enforcing the ACA’s minimum coverage requirements. The most recent example is the state of Idaho’s approval of a carrier’s request to sell plans that provide significant cost savings, but don’t meet ACA mandates. The newly-confirmed Secretary of HHS, Alex Azar is not actively opposing this move which would have been unthinkable under the Obama administration.
- Is actively promoting a plan to approve short-term health plans that extend for 12 months and do not meet ACA coverage requirements. Currently, such plans can only have a term of three months and are seldom used.
- Has dramatically reduced the marketing and promotional budget for federally-facilitated exchanges and cut in half the time period for consumers to enroll in ACA plans on these exchanges.
- Legislators are considering ways to eliminate the employer mandate embedded in the ACA.
- The Administration has played a game of chicken with insurers over cost-sharing reduction payments that help those receiving financial assistance for their medical plans. The administration alternates between saying it will not make the payments and then paying at the last minute. This uncertainty has led to higher premiums and carriers leaving certain markets.
Update: Single-Payer in California
The January 30, 2018 issue of our Broker Update provides a good backgrounder regarding SB 562, the single-payer bill introduced in the state Senate last year, which would dismantle the private insurance industry in California.
Here is the latest on this dangerous legislation:
- The bill itself is on hold in the Assembly Policy Committee where Speaker Anthony Rendon placed it pending a more thorough review of its far-reaching implications.
- There are deadlines in late April and late May by which the bill must move out of the Policy and Finance committees respectively in order to still be considered.
- The Select Committee established by Speaker Rendon to study the issues related to Universal Healthcare (of which single-payer is one form) has met five times and intends to publish a report this summer. Presumably, that report will provide the deepest analysis to-date regarding SB 562 and alternatives to it.
- Separately, Enact Universal Healthcare for CA, has launched a ballot initiative that would remove two key roadblocks to financing SB 562. Those roadblocks are:
- The Gann Limit, which limits the amount of a tax increase that can be imposed on Californians (SB 562 would, as a funding mechanism, likely need to impose taxes that exceed this limit).
- Proposition 98 – which states that at least 50% of the State’s budget must be directed towards K-12 schools and to community colleges. The budget associated with SB 562 is expected to reduce education’s share dramatically.
- The consensus seems to be that this initiative has not garnered nearly the number of signatures by this date that would be needed in order for it to qualify for the November ballot.
- Finally, proposals related to Universal Healthcare in general and Single-Payer specifically, are expected to be hot-button issues in this Fall’s election cycle.
In summary, the federal government (Congress and the Trump administration, through its agencies) are pursuing a strategy of piece-by-piece dismantling or weakening of the ACA and of promoting private market alternatives, while here in California, the legislature and various special interest groups are promoting a more heavy-handed government approach to healthcare financing and delivery.
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