What’s Next in Healthcare Reform?

September 7, 2017

After failing to pass major reforms to the Affordable Care Act (“ACA”), Congress has now entered its month-long August recess. When it returns, the healthcare debate in Congress will continue but will move on examining ways it can make measured, and bipartisan, reforms to pressing concerns with the law. Overall, Congress does not appear to have any clear, unified, plans on what to do next on the Affordable Care Act.

The Department of Health and Human Services, Congress, and The White House have many options and plans to address the next steps in health care reform, presented below is an overview of what may be next.

Department of Health and Human Services

The ACA provides the Secretary of the Department of Health and Human Services with vast authority to shape how the law is effectuated. The ACA gives Secretary Price the most discretion when it comes to enforcing reporting regulations for insurers, hospitals, and physicians, in particular.

Price could also provide businesses with regulatory relief when it comes to ACA fees and taxes. The Obama administration initially delayed the health insurer tax on premiums that’s built into the law to fund subsidies. The implementation of the employer mandate was also delayed, while the so-called Cadillac excise tax on high-cost plans was pushed back more than once. To date, Price has proposed stricter enrollment rules to prevent people from abusing ACA plan protections by failing to pay premiums.

The Secretary also could look to rewrite numerous rules relating to the essential benefits that ACA plans are required to cover. Any attempt to change these benefits would require time consuming rule making.

Price may also seek to make changes to Medicare through the Center for Medicare and Medicaid Innovation (CMMI), which supports pilot programs in Medicaid, Medicare and CHIP to test new payment and delivery models. Price could use CMMI to experiment with conservative reforms, including possibly some form of premium support.

Congress

Senate leaders have expressed a clear desire to move on from health care reform. Despite this, conservative members have stated they will seek to repeal the law. More notably, moderate members have launched a bipartisan effort to address immediate concerns with the ACA.

Senators Alexander (R-TN) and Murray (D-WA), the chair and ranking member of the Health, Education, Labor, and Pensions Committee (HELP), have announced that they will begin hearings on a bipartisan approach to health reform when the Senate returns in September, and funding of the CSR payments for at least a year. A bipartisan group of House members has also called for funding the CSRs. And pressure to fund the CSRs continues from the outside, with the National Association of Insurance Commissioners urging their continuation.

The Congressional Budget Office is expected to score key ACA proposals over the recess, including Sen. Cruz’s amendment to allow states to waive certain ACA consumer protections; Sen. Rob Portman’s proposal to help people who gained coverage under Medicaid expansion buy private insurance; and a plan from Sens. Lindsey Graham and Bill Cassidy that would keep many of the ACA’s taxes but allow states to decide how to spend the money.

Of particular significance to insurers, Congress will need to consider whether to repeal or keep ACA’s sales tax on insurance plans. Right after enrollment season ends, a tax on health insurers begins on January 1, 2018. Congress had suspended it for 2017.

In the House, House and Energy Commerce Chairman Greg Walden has suggested variety of legislative efforts could be vehicles for aspects of repeal legislation, including an expected renewal of expiring funding for the children’s health insurance program (CHIP) or reauthorization of community health centers. He has also noted the importance of paying the law’s CSRs.

The White House

President Donald Trump has continued to speak out forcefully for Congress to continue work on repealing the ACA—but Congress does not appear interested in going along for now. The President has ramped up threats to scrap cost-sharing subsidies—estimated to be $7 billion this year. Without the CSR funding, the insurance markets would be significantly destabilized. But Congress has shown no support for the President’s proposal to withdraw CSR payments and a recent court decision allowing the state attorney generals to intervene if the CSRs are cut-off makes it significantly more difficult for the White House to withdraw the CSRs.

 

Contact the experts at PartnerRe online, by phone at 415-354-1551 or by email at ali.duerr@partnerre.com.

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