Life Science Compliance Update

September 15, 2017

HELP Committee Holds Hearing on Individual Health Insurance Market

ACA

The Senate Health, Education, Labor and Pensions (HELP) Committee recently held the first hearing of several about ways to stabilize premiums and help individuals in the individual insurance market. The Committee heard from five different state insurance commissioners regarding their experiences with the individual insurance marketplaces under the Affordable Care Act (ACA). Most of the testimony focused on the need to fund cost-sharing reduction (CSR) payments, increase flexibility under the ACA’s section 1332 waiver program and establish a federal reinsurance program. There was bipartisan interest in stabilizing the individual market.

Chairman Lamar Alexander reported that there are eighteen million people with coverage through the individual market. He noted that thirty-one Senators not on the HELP Committee attended a morning coffee with today’s witnesses and applauded the wide interest in stabilizing the individual market. He said there has been a “partisan stalemate for seven years” and that action needs to be taken sooner rather than later, with final rate determinations due September 20th and Qualified Health Plan contracts for 2018 due September 27th. He also warned that insurer exits could occur prior to the contract finalization deadline and that half of counties nationwide have only one insurer participating on the Exchange.

Ranking Member Patty Murray was slightly more political, stating the Administration is “trying to create Trumpcare by sabotage,” cutting ACA outreach, and creating uncertainty about cost-sharing subsidies. She said it is important to reach a “multi-year solution” because plans develop rates over many months. She said, however, note that she believes that “agreement is possible,” while also noting the importance of preserving guardrails present in the ACA.

Julie Mix McPeak, the Commissioner of the Tennessee Department of Commerce and Insurance, noted that while the individual insurance market in Tennessee has not collapsed, the market should not be considered stable and that insurers have been “fleeing the market” because of uncertainty about rising costs. Most individuals in the state only have one plan to choose from, compared to last year, when at least two carriers offered policies in all counties. She stated that premiums have skyrocketed while choices have diminished and that the current situation is not sustainable.

McPeak stated that funding of CSRs is the single most critical issue and that such funding is not an insurer bailout, while also noting the importance of reinsurance and the cost of care, stating that there is no transparency in the pharmaceutical industry. She highlighted the fact that insurer rates are directly related to underlying health care costs.

Mike Kreidler, the Washington State Insurance Commissioner, stated that roughly 330,000 individuals purchase coverage through the individual state-based marketplace. He also noted that Washington embraced the ACA from the beginning and the uninsurance rate has dropped from fifteen percent to less than six percent. He stated that insurers in the state need certainty and that “progress forward is threatened by uncertainty around the fate of the ACA.” Mr. Kreidler asked Congress to address the market uncertainties by permanently funding CSR payments and enacting a federal reinsurance program for a minimum of three years. He also asked for federal investments in outreach and enrollment marketing to maximize the number of people enrolled in the market, especially the young and healthy, and to continue the “guardrails” in the section 1332 waiver process.

Lori Wing-Heier, Director of the Alaska Division of Insurance, testified to the health care challenges in Alaska, including its large size, rural population and insufficient provider competition. She stated that while the individual mandate reduced the number of uninsured residents in the state, it also had the unintended consequence of raising insurance premiums, resulting in a volatile market. She believes that congressional action is necessary in the individual market. Wing-Heier gave the example of the Section 1332 waiver that they did in Alaska and asked Congress to focus on stabilization of the health insurance markets. She asked for funding of CSR payments through at least 2019. Ste also stated that programs that allow states to address the unique needs of their residents are crucial to long-term stability of the health insurance markets.

Theresa Miller, the Insurance Commissioner of Pennsylvania, noted that while the ACA is not perfect, the narrative that it is failing and imploding is false. She stated that the ACA has worked well in Pennsylvania, where the uninsured rate has dropped to 6.4 percent. Commissioner Miller stated that for 2018, the insurers in the individual market filed for an average increase of 8.8 percent, assuming no changes come from the federal government. She noted that if CSR payments are not made, insurers estimate an average increase of 20.4 percent and if the individual mandate is not enforced, insurers would seek an estimated 23.3 percent increase. She stated that CSR uncertainty has a significant impact on rates and drives up costs for all consumers. Commissioner Miller asked Congress to allocate CSR funding through at least 2019.

John Doak, Commissioner of the Oklahoma Department of Insurance stated that small business owners and self-employed individuals are suffering with the insurance premium spikes. In addition, carriers are narrowing their networks. Doak stated that he is encouraged by the Trump Administration’s priorities for state flexibility and that Oklahoma has submitted a section 1332 waiver. He asserted his belief, however, that waivers are not the solution to the problems from the ACA and that powers must be returned back to states.

July 06, 2017

Comparison of House v. Senate Health Care Draft Bills

Main_empty_homes_legislation_1343997376

A topic of much discussion, but few solutions, has been healthcare in America. President Donald Trump was supposedly elected, in part, because of his promises to “Repeal and Replace” the Affordable Care Act, aka “Obamacare.” Many politicians and reporters were talking about passing the replacement bill prior to the summer Congressional recess. We are currently in that recess, and clearly, no such bill has been passed.

In today’s hyper-partisan world, it is tough to get all senators or representatives from one side of the political aisle to vote for something together; the idea that senators or representatives from the other party may vote in tandem on such a hot-button issue is almost impossible.

Right now, the House of Representatives has passed a bill, the American Health Care Act (AHCA), while the Senate has introduced a discussion draft. It is highly unlikely that Senators will vote on a health care bill during the week they return from recess. Currently, Senate Majority Leader Mitch McConnell is sending several proposals and basic outlines to the Congressional Budget Office for scoring.

In the meantime, below is a side by side comparison of the House-passed AHCA with the Senate discussion draft bill. It is important to remember that this is not a comparison of two bills that have been passed and now must be reconciled – instead, it is more of a guideline to show where one side of the Legislature stands on the issues as compared to the other side of the Legislature.

Repeal of Medicaid Expansion

House-Passed AHCA

Provides the enhanced matching rate only for expansion-eligible individuals already enrolled in Medicaid as of Dec. 31, 2019 and do not have a break in eligibility for more than one month after that date. Those newly eligible or reenrolling could only do so at a state’s regular match rate.

Senate-Introduced Draft

Phases-down enhanced FMAP over three years beginning in 2021 for newly eligible beneficiaries (85% in CY 2021, 80% in CY 2022, and 75% in CY 2023), using regular match if higher. States implementing expansion after Feb. 28, 2017, not eligible for newly eligible match rate.

Incentives for Increased Eligibility Redeterminations

House-Passed AHCA

Requires States with Medicaid expansion populations to re-determine expansion enrollees’ eligibility every six months. Provides a temporary five percent FMAP increase to States for activities directly related to complying with this section. Effective Oct. 1, 2017.

Senate-Introduced Draft

Same as the AHCA, but it permits – not requires – it and allows for more frequent re-determinations.

Work Requirements

House-Passed AHCA

Allows states to apply optional work requirements for non-disabled, nonelderly, non-pregnant Medicaid beneficiaries beginning in FY 2018. Includes increased match for implementation activities.

Senate-Introduced Draft

Same as the ACHA, with parallel exceptions.

Patient and State Stability Fund

House-Passed AHCA

Provides for a fund to reduce costs for patients and to stabilize State markets. The fund:

  • Provides $15 billion in 2018 and 2019 and $10 billion annually for 2020 through 2026.
  • Adds via amendments $8 billion to assist those affected by health status underwriting in waiver states and $15 billion for maternity, newborn, mental health, and substance abuse care.
  • Adds $15 billion for a federal “invisible high-risk pool” to offset high-cost patients’ expenses through reinsurance.

Senate-Introduced Draft

Establishes two funds, short term and long term:

  • Short term: appropriates $15 billion for CY 2018 and 2019 and $10 billion for years 2020 and 2021 to help issuers deal with market disruption.
  • Long term: provides $62 billion over 10 years for high risk program; premium stabilization; provider payments; cost sharing assistance. States must pay match starting CY 2022.

Continuous Health Insurance Incentive

House-Passed AHCA

For Benefit Year 2019, implements a 12-month lookback period to assess whether an applicant went without coverage for greater than 63 days and assesses a 30 percent premium surcharge for one year.

Senate-Introduced Draft

The current draft does not include any incentives for patients having continuous health insurance throughout the year.

State Waivers

House-Passed AHCA

Allows states to seek waivers of certain federal requirements. States may:

  • Waive federal age-rating requirements and allow wider age bands;
  • Waive federal essential health benefit requirements (EHBs) and define their own;
  • Waive the ban on health status rating. Instead of imposing the AHCA’s one-year 30 percent premium surcharge for not maintaining continuous coverage, insurers would be permitted to charge higher premiums to those with preexisting conditions for a one-year period if they do not maintain continuous coverage. States must set up a high risk pool to elect this option.

Requires states to attest that their purpose is reducing premiums. Automatically approves waivers in 60 days for up to 10 years unless HHS intervenes to deny.

Senate-Introduced Draft

Provides $2 billion in grant funding through 2019, to incentivize states to apply for section 1332 waivers established by the ACA, under which a variety of requirements may be waived, including EHBs and regulations prohibiting subsidies off-Exchange. Does not permit waivers of community rating.  It also removes requirements that 1332 waivers be budget neutral or achieve the same coverage rates as would otherwise be attained under Federal law.  Further, it permits the use of State Innovation and Stability fund allotments to carry out waiver implementation.

Medical Device Excise Tax

House-Passed AHCA

Repeals the 2.3 percent excise tax on medical devices beginning in 2017 (when it is already suspended).

Senate-Introduced Draft

Repeals the tax beginning in 2018 (when it would otherwise have taken effect again).

Tax on Prescription Medication

House-Passed AHCA

Repeals the ACA pharmaceutical tax in 2017.

Senate-Introduced Draft

Repeals the tax one year later, in 2018.

Opioid Funding

House-Passed AHCA

Provides $45 billion in opioid funding over ten years.

Senate-Introduced Draft

Provides $2 billion in state grant funding for opioid efforts, in FY 2018.

May 08, 2017

The ACHA Passes the House

AHCA-would-insure-24-million-fewer-in-US-than-ACA-anticipated-CBO-report-says

On Thursday, May 5, 2017, House Republicans finally got what they have been asking for, and campaigning on, for several years. They held a successful floor vote on the American Health Care Act (AHCA), approving the bill by a narrow 217-213.

Following the vote, President Donald Trump hosted Republicans at the White House for a celebratory press conference, saying that he was “so confident” that the House version would be taken up and passed in the Senate. Senate Republicans quickly made it clear that they would not use the House-passed AHCA as a starting point, and would instead create their own package that could then be reconciled with what was passed in the House. This next step could take weeks, or even months, as Senate Republicans navigate their own ideological divides and ensure that any legislation conforms with budget reconciliation rules.

The Bill

While many are happy that the bill repealed Obamacare to a certain extent, others are concerned that the bill will hurt healthcare for many. The bill will likely lower premiums for younger, healthier, people and raise premiums for older and less healthy payors. Young people can still remain on their parents’ health insurance until age 26. The bill also does away with the individual mandate, meaning no one will be forced to pay a penalty if they go without health insurance for more than a short period of time, but does provide for different incentives for people to maintain their coverage.

A quick google search can provide readers with pros and cons that align with individual political beliefs, so we will not delve into those much here. To get a jump start on talking points, however, an article from Money on the bill can be found here.

Next Step: To the Senate!

Both moderate and conservative senators have started to discuss their vision for the healthcare bill, with Senator Shelley Moore Capito of West Virginia saying she “absolutely” had concerns with the AHCA’s Medicaid cuts and Senator Rand Paul of Kentucky saying that the conservative changes did make the legislation “less bad,” but that it still has “fundamental problems.” With a much smaller majority than in the House, Senate Republicans can only afford two defections and still advance legislation.

Industry Reaction

Many Republicans acknowledge that the bill is not perfect, and most – if not all Democrats – have come out against the bill and have started campaigns against it. A variety of medical associations and organizations have been closely tracking this bill and below is a sampling of some statements that have been published by various groups.

The Arthritis Foundation released a statement, noting,

The health reform replacement bill passed today threatens coverage and affordability of care for so many of our patients. The Arthritis Foundation, one of the largest patient advocacy organizations, is concerned that the legislation will not provide adequate protections to people with pre-existing conditions, could limit access to Essential Health Benefits and cut benefits for Medicaid. Our patients are already faced with managing a chronic disease and it’s unfair that they may also be faced with paying more for insurance with fewer guaranteed benefits including out-of-pocket medication protections. People with arthritis and other chronic conditions need coverage the most and regular access to affordable care, so they can stay healthy.

Our goal is to continue our work with Congress to ensure health reform replacement legislation provides a more seamless and transparent health care system, insurance protocols that are not overly burdensome and allow patients to remain stable on a drug, policies that ensure out-of-pocket costs for prescription drugs are more reasonable and an emphasis on outcomes-based contracting and value-based insurance design.

The American Medical Association released a statement, clearly unhappy with the passage of the bill:

The bill passed by the House today will result in millions of Americans losing access to quality, affordable health insurance and those with pre-existing health conditions face the possibility of going back to the time when insurers could charge them premiums that made access to coverage out of the question. Action is needed, however, to improve the current health care insurance system. The AMA urges the Senate and the Administration to work with physician, patient, hospital and other provider groups to craft bipartisan solutions so all American families can access affordable and meaningful coverage, while preserving the safety net for vulnerable populations.

Seema Verma, Centers for Medicare & Medicaid Services (CMS) Administrator, released a statement on its passage, stating,

Today is the first of what I am confident will be many historic days ahead as we move toward patient–centered healthcare instead of government–centered healthcare.

I have worked in the field of Medicaid for 20 years and have heard from many mothers like myself who have shared their struggles and their hopes for a more affordable, more sustainable healthcare system. It is important that our most vulnerable citizens, the aged, the infirm, the blind and the disabled have more choices, greater access and peace of mind when it comes to their healthcare.

The bill that was passed in the House is a great first step achieving this goal.

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