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Healthcare Reform: The Long and Winding Road

Healthcare Reform: The Long and Winding Road


Amidst the intense chronicling of each step on the path of healthcare reform, it is easy for us benefits professionals to get caught up in every quote by a lawmaker, analysis by a journalist or “thought piece” by an interest group. After all, it’s our job to be up to speed on this topic isn’t it? Yes…..to a point, but certainly not to the point of high anxiety. To help lower your blood pressure a bit, we will try to put this go ‘round of healthcare reform (HCR) into perspective.

Déjà vu? Remember in 2010, when the ACA was being drafted and we thought it was the end of the healthcare market as we knew it, with “Navigators” and “Assisters” replacing insurance agents and brokers? Certainly the market has changed, but if nothing else, your value as a benefits professional is surely as critical to clients now as it was then, arguably more so. We think there are parallels between this current round of healthcare reform and what we saw in 2010.

Healthcare Reform version 2.0

We learned a lot during the implementation of the ACA, which we call “healthcare reform version 1” (HCR 1.0), that can help maintain perspective as we embark on the implementation of the American Health Care Act (AHCA) or HCR 2.0. The most important take away was that this is a long process and many stakeholders shape it along the way. While it pays to stay informed, it is counterproductive to get too wrapped up in the minute-by-minute details, because they surely will change.

Federal Legislation

The week of March 6, 2017, House Republicans unveiled the American Health Care Act (AHCA). The bill quickly cleared two committees and must now clear the Budget committee. The Congressional Budget Office (CBO) has not yet “scored” the bill (assessing its impact on the budget and on consumers). There will be an intense round of discussions among house Republicans once CBO weighs in. Against that backdrop, the Republicans themselves are a fractured party. House Speaker Ryan is walking a very thin tightrope between Tea Party conservatives and moderate Republicans, each of whom think the current version of the bill has major problems, all while keeping his eye on his colleagues in the Senate who have their own agendas. Assuming he can shepherd the AHCA through the House, it then goes to the Senate where it must be reconciled to what Senators wish to see in the bill. Too many changes in the Senate and the bill may never pass the House once it is re-presented for a final vote. But let’s assume it passes both houses, then is signed by the President.

Federal Agencies

Federal agencies then weigh in with their interpretation of how the bill should be implemented through regulations. Likely, multiple agencies will be involved, as they were in HCR 1.0: Health and Human Services (and its Center for Medicare and Medicaid Services), Treasury (IRS) and the Department of Labor. They will each put their stamp on how the federal government believes the bill should be implemented by releasing a draft, then final regulations over a period of years.

State Government

State governments will then assess the impact of the AHCA and depending on how they believe their constituents will be affected, could fight the law, follow it to the letter or implement portions of it. In California, where legislators strongly support the ACA, legislators will almost certainly blunt attempts to roll back provisions of the ACA and fight new provisions that they believe will harm consumers.

State Regulators

Once the state government has taken a bite at the apple, then state regulators, much like their federal counterparts, get to interpret the law as modified by the state. They write regulations that guide how insurance carriers implement state and federal law. The California Department of Insurance and the Department of Managed Healthcare will have a big impact on how federal law and regulation and state law is implemented. But that’s not the end of the story.

Insurance Carriers

The insurance carriers will then have the difficult task of interpreting state regulations when developing products, underwriting guidelines and processes and procedures. As we know too well from HCR 1.0, each carrier can interpret a state regulation differently and they can change their minds, interpreting a regulation one way initially and then at a later date, modifying their interpretation and the resulting products and guidelines affected by it.

To summarize:

  • Creating federal law is a messy process in our current, polarized environment. The AHCA could change significantly from its current form;
  • it takes time for federal agencies to interpret the law and develop regulations for the states and insurance carriers to follow;
  • state government can impact how the law is implemented by taking advantage of flexibility in the law;
  • state regulators’ interpretation of state and federal law take time and may modify how the law is implemented;
  • insurance carriers’ own interpretations of federal and state regulations will impact the products and guidelines that determine what benefits professionals can offer and the guidance they should provide clients.

Which takes us back to the title of this article: “Healthcare Reform: the Long and Winding Road,” and why we should recall lessons learned during HCR 1.0 to stay informed and keep our sanity as we watch and participate in the process of HCR 2.0.

Questions?
Contact the small group experts at 800.696.4543 or info@claremontcompanies.com.

 

 

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