Federal Health Care Policy Update

Insurers May Get More Time to Opt Into Obamacare in 2018

The deadline for health insurers to apply for the 2018 Obamacare federal exchanges would be extended from May 3 to June 21, the HHS proposed Feb. 17.

Health plans are in the process of deciding whether to participate in the 2018 exchanges, and many health-care stakeholders have said the 2018 exchanges are in jeopardy of further premium increases and withdrawals as Republicans prepare plans to repeal and replace the Affordable Care Act.

Humana Inc. was the latest to withdraw from the 2018 exchanges, and Molina Healthcare Inc. also indicated it might not participate. Most of the health plans participating in the ACA exchanges are losing money due to a sicker-than-expected population of enrollees.

In addition to the draft bulletin that would revise the timing for qualified health plan submissions, the Health and Human Services Department’s Centers for Medicare & Medicaid Services released a document of revised key date filings for qualified health plan certification in the federal exchanges and an addendum of technical guidance. Plans can file their applications as early as May 10 under the proposal, on which the CMS requested comments no later than March 7. The CMS would send final certification notices to insurers by Oct. 12, instead of Sept. 22. The 2018 open enrollment period is to start Nov. 1.

Senate Republicans Ready to Repeal ACA without Democrats: McConnell

The Senate is ready to repeal the Affordable Care Act without any help from Democrats, Senate Majority Leader Mitch McConnell (R-Ky.) said.

McConnell said he hopes to move forward on dismantling the ACA “just as soon as we have the votes,” and said he expects little to no cooperation from Democrats on a replacement plan. Senate Republicans plan to pass a repeal bill using filibuster-proof reconciliation, meaning they can lose two Republican votes and do not need Democratic support to move it.

“It’s clear that in the early months it’s going to be a Republicans-only exercise,” he said during a Feb. 17 news conference.

The admission comes a day after House Republicans met to rally around a plan to dismantle the law. Republican leadership distributed a briefing paper to conference members that says the GOP conference is committed to offering monthly tax credits and loosening restrictions on tax-favored health savings accounts as part of their overhaul.

Congress is out for the next week. House Speaker Paul D. Ryan (R-Wis.) said Republicans would introduce a repeal-and-replace bill upon their return. Over the break, many lawmakers will hold town halls in their districts, which have become for the past several weeks a battleground for voters’ ire over efforts to dismantle the law.

McConnell said he was not concerned about town hall protesters, adding, “I can’t think of anything we’ve talked about more on both sides than Obamacare.”

Conservatives Object to Obamacare Replacement’s Tax Credits

Some conservative House Republicans are objecting to a major part of the Obamacare replacement outline presented to them by party leaders, underscoring the party’s continuing inability to agree on an alternative health plan. The proposal would allow Americans who lack insurance to buy coverage with refundable tax credits they can receive before the end of a tax year. House Ways and Means Chairman Kevin Brady said he and other leaders presented the idea during Thursday’s private conference of the House GOP.

Some conservatives say they oppose the idea because it could amount to a new government subsidy by allowing people to receive a larger credit than they pay in taxes. They prefer a mechanism that would preclude people from getting any more money than they paid in taxes. “I don’t like the refundable tax credit,” says Representative Ted Yoho of Florida. “I don’t want people getting money back.” Representative Trent Franks of Arizona said tax credits “should be predicated on those taxes paid in, not a refundable tax credit, because it can so easily become a major and unstoppable entitlement.”

The dispute over tax credits is one of many issues facing Republican leaders as they seek agreement on how to fulfill their promise to repeal and replace Obamacare. Also discussed Thursday were a proposal to cap the tax break for employer-provided health insurance, and efforts to restructure Medicaid. Republicans are set to face their constituents during a weeklong congressional recess next week.

There is no legislative language yet, so it is too early to count votes for or against a health care plan. However, with 239 Republican members in the House and virtually no hope of Democratic support, the GOP can only afford to lose 21 of their own lawmakers on a bill.

“I think there’s not the votes there to pass refundable tax credits,” said Representative Mark Meadows of North Carolina, chair of the Freedom Caucus of about 40 conservative members. He said it could be a “new entitlement program” and may be subject to fraud. Asked if that calculus would change if President Donald Trump backs refundable tax credits, Meadows said, “No, it does not.”

Representative Dave Brat of Virginia said, “The refundable tax credit piece is problematic because then you’ll have health care run at the federal government level where everything is insolvent.” And he said Democrats will “bid up” the tax credits over time.

Democrats Hit Back at Republican Health-Care Proposals

Congressional Democrats Feb. 16 called for adding a public health insurance option to Obamacare markets and making subsidies more generous.

Speaking to about 600 people at an annual Washington conference held by Families USA, an organization that strongly supports the Affordable Care Act, Democratic members of Congress criticized Republicans for offering “failed ideas,” such as high-risk pools, to replace the ACA. A few hours later, former Obama administration officials also criticized Republicans for not being able to offer a replacement after years of calling for repealing and replacing the 2010 law.

Republicans are moving forward with their plans to repeal and replace the ACA, with the party’s congressional leadership presenting their members talking points of their plans. ACA supporters took aim at the proposals, saying they would not come close to covering the approximately 20 million people who have gained coverage under the ACA.

Trump Pick to Run Medicare and Medicaid Demurs on Key Questions

Seema Verma, President Donald Trump’s pick to run U.S. health programs for the elderly, poor and disabled, gave little detail on her views on key pieces of those programs.

At a hearing before the Senate Finance Committee on her confirmation to run the Centers for Medicare and Medicaid Services, she said questions ranging from future funding to drug benefits to seniors are up to Congress, and that she’ll implement the laws they pass. She did give insight into her philosophy, which is that more flexibility should be given to states and individuals to make choices about health care, and the federal government’s role should be more limited.

“I will work toward ushering in a new era of state flexibility and leadership,” Verma said in her prepared introductory remarks. “We need to ensure that people have choices about their care.”

On Medicare, the government program for the elderly and disabled, Verma said she was opposed to the idea of turning it into vouchers, which could lead to more limited funding. However, she said she is open to ideas to shore up its financial stability.

Medicare Part D

Republicans, who control Congress, are working at a strategy to repeal Obamacare, the signature health-care law of Trump’s predecessor. Undoing the Affordable Care Act could increase the amount seniors have to pay for drugs in the Part D piece of Medicare, which subsidizes the costs of prescription drugs for its beneficiaries. Again, Verma would not give her opinion on the issue.

“It’s important to help seniors get the most affordable drug prices,” she said.

When asked whether Medicare should have more authority to negotiate prices — something that drugmakers strongly oppose and about which Trump and his administration have send mixed signals — she praised the role of private firms known as pharmacy benefits managers. PBMs, which negotiate with drugmakers to get discounts for clients including government programs and insurers, have been in the cross hairs lately in the debate over who’s responsible for high drug prices in the country,

“I’m thankful that we have the PBMs and the Part D program that are performing that negotiation on behalf of seniors,” Verma said.

Medicaid

On Medicaid, the program for the poor, Verma repeatedly endorsed the idea of giving more control to states. She backed the Medicaid expansion that she worked on in Indiana as a consultant, including to then-governor Mike Pence, who is now vice president. She was asked about policy under consideration by Congress that could limit Medicaid funding, including block grants and per-capita caps.

“What I support is the program working better, and whether that’s a block grant or a per-capita cap, there are many ways we can get there,” she said.

After the hearing, Senator Ron Wyden, the Oregon Democrat who is the ranking member on the Senate’s Finance Committee, called those policies “a Trojan horse for cutting spending.” He said Verma avoided questions on Medicare, and that he is awaiting her written responses before deciding how he will vote.

During the hearing, Verma was pressed on whether the Medicaid proposals would lead to individuals losing coverage. She said, “I strongly do not want to see anyone not get health services.”

Vulnerable Populations

That built on a theme she returned to throughout her hearing, that she has fought for coverage for vulnerable populations throughout her career.

“I started my career working on national policy on behalf of people with HIV and AIDS, as well as low income mothers,” she said in her prepared opening remarks. “I fought for coverage, for greater health care access and for improving the quality of care — and have continued to fight for these issues.”

In the individual market, Verma said health plans should be able to offer skimpier packages of benefits than what the Affordable Care Act currently allows. At one point, she declined to answer a question on whether insurance should cover autism treatment for children, because she had been advised by the Office of Government Ethics not to address the topic because her husband is a psychiatrist.

At another point, she said that she would give adults more choices in their insurance plans. That came in response to questions from Senator Debbie Stabenow, a Michigan Democrat, about whether her plan would amount to charging women more for benefits such as maternity care.

“Women have to make the decisions that work best for them and their family,” Verma said. “Some women might want maternity coverage. Some women might not want it, might not choose it, might not feel like they need that.”

HHS Moves to Stabilize Obamacare Markets

Health insurers got help from the Trump administration Feb. 15 to make their Obamacare exchange plans more profitable, but the proposed regulation did not include changes in the premium differential that can be charged for older enrollees.

The Department of Health and Human Services market stabilization proposed rule (RIN:0938-AT14) would make changes in 2018 to the Affordable Care Act special enrollment periods, the annual open enrollment period, guaranteed availability, network adequacy rules, essential community providers and actuarial value requirements. It also announces upcoming changes to the qualified health plan certification timeline.

The proposed rule follows the announcement Feb. 14 by Humana Inc. that it is leaving the marketplaces in 2018 because the company’s plans are losing money. Humana followed UnitedHealth Group Inc. and Aetna in pulling back from the marketplaces. Most plans have lost money in the exchanges due to a sicker than expected population of enrollees, and both supporters and critics of the 2010 health-care law are grappling with ways to make the individual and small group health insurance markets sustainable.

The proposal is HHS Secretary Tom Price’s first attempt to stabilize the troubled ACA markets since he took office. The proposal is scheduled to be published in the Federal Register Feb. 17, with comments due March 7.

IRS Easing ACA Individual Mandate after Trump Order

The IRS will not require people to mark whether they have health insurance when filing their tax returns, a shift from current requirements under the Affordable Care Act’s individual insurance mandate.

The agency walked back a previous decision to require an indication of coverage on tax returns after President Donald Trump signed an executive order Jan. 20 requiring federal agencies to reduce the burden of the ACA. The law, which Republicans are jockeying to dismantle, requires individuals to maintain health coverage or pay a penalty.

After accepting returns that didn’t indicate coverage in 2014 and 2015, the Internal Revenue Service had set up a system for this year that would reject tax returns during processing if an individual didn’t provide health coverage information. The agency decided to continue accepting electronic and paper returns for processing, even if they lack the coverage information, following the executive order, according to an agency statement.

While the step may be seen to be a weakening of the ACA’s mandate, the IRS makes clear that the law is still in force and “taxpayers remain required to follow the law and pay what they may owe.” IRS Commissioner John Koskinen has previously said despite the flurry of activity on the Hill regarding the ACA, taxpayers should follow current law until there is a new one.

John Zang contributed to this report

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