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Policy Update on Healthcare Reform

Wednesday, September 20, 2017   (0 Comments)
Posted by: Kate Slider

September 20, 2017

POLICY UPDATE ON HEALTHCARE REFORM

Update from Patrick Cooney of The Federal Group, AABC's Federal Lobbyist
Health Reform Efforts Continue

Senators are continuing efforts to find health care reforms that can be enacted. Two efforts have been getting the most attention. The first is a bill authored by Senator Bill Cassidy (R-LA) and Senator Lindsey Graham (R-SC). The second is a bipartisan effort in the Health, Education, Labor and Pensions Committee (HELP) which was led by Senator Lamar Alexander (R-TN) and Senator Patty Murray (D-WA).

A third effort by Senator Bernie Sanders (D-VT) calls for expanding the Medicare program to cover all individuals. A group of 16 liberal Democratic senators have endorsed the idea but it doesn’t have near the political support that the two other efforts are receiving at this time. Support for the legislation comes after the Republican-controlled Senate fell one vote short in July of adopting a narrow repeal of Obamacare, and as lawmakers express concern that insurance marketplaces could collapse without new government support. Despite new support from Democrats for Sanders’s measure, that doesn’t mean it stands a chance of passage. Republican lawmakers, who control both chambers of Congress, oppose a single-payer system.

Cassidy/Graham Effort
Obamacare funding streams would be replaced with a state block grant system under the latest Senate amendment to H.R. 1628, the vehicle for Republicans’ Affordable Care Act repeal efforts through reconciliation.

The amendment would provide $1.18 trillion over seven years for a block grant program based on funds provided to states for the ACA’s Medicaid expansion enrollees, premium tax credits, cost-sharing reduction payments, and Basic Health Program. States could waive some insurance regulations as part of the block grant program.

Other changes to the healthcare law and Medicaid would be similar to those under the "Better Care Reconciliation Act" (BCRA) that the Senate rejected in July.  Those would include:

  • Ending the Medicaid expansion for new enrollees and the increased federal funding for that population beginning in 2020. BCRA would have phased out the additional funding through 2023. States also could impose work requirements on certain Medicaid recipients.
  • Imposing a per-person cap on traditional Medicaid funding, though with different growth rates than BCRA, such as maintaining the medical component of the consumer price index (CPI-M) after 2024 for the elderly and disabled. The proposal also would allow states to elect to receive funding through a Medicaid block grant program instead.
  • Repealing the premium tax credits for lower-income exchange enrollees and the cost-sharing reduction payments to insurers beginning in 2020.
  • Eliminating the individual and employer mandate penalties.
  • Repealing the medical device tax and reducing taxes related to health savings accounts (HSAs). Other ACA taxes and fees would be maintained, unlike BCRA.
  • Providing $25 billion over 2019 and 2020 for a reinsurance program that would provide funds to insurers to help address market disruption and urgent health care needs. BCRA would have provided $50 billion over four years.
  • Allowing HSAs to be used for some insurance premiums and allowing more people to purchase catastrophic health coverage.
  • Blocking federal funding for entities, such as Planned Parenthood, that provide abortions.

Block grant funding would be provided for calendar years 2020 through 2026, starting with $146 billion and ending with $190 billion. The 2020 appropriation would include a $10 billion reserve fund for states that experience a shortfall in federal funding. An $11 billion contingency fund would be created allowing additional funding in 2020 and 2021 for low-density states or states that haven’t expanded Medicaid.

States could use the funds for a variety of purposes, such as helping high-risk individuals purchase coverage, establishing a reinsurance program to stabilize premiums and promote participation in the individual market, providing payments to health care providers, or reducing out-of-pocket costs for those in the individual market.

The prospects for this updated plan are not good as several Republican senators have already expressed concerns with the proposal and the Heritage Foundation has expressed opposition to the plan. But the GOP Senators are pushing hard for this to pass before the end of the month.

Alexander/Murray Effort
Until late last night, Senator Alexander was leading a bipartisan effort to stabilize the individual health insurance market. Sen. Alexander stressed recently that the proposed legislation would not strip away key patient protections enacted under the Affordable Care Act. He wanted to keep in place a provision guaranteeing that anyone can buy an insurance policy and other protections that bar insurers from rescinding coverage, charging higher rates to patients with pre-existing conditions and imposing annual or lifetime limits on health benefits.

But Alexander insisted states must be given more flexibility to offer a larger variety of health insurance plans with more benefits and payment options. Senator Patty Murray had conceded that states should be given more flexibility in health insurance decisions and was willing to continue to work in a bipartisan manner, but Sen. Alexander halted the bipartisan work last night, stating that no agreement could be reached.

Alexander’s promise to keep patient protections intact came at the beginning of the third of four hearings the committee is holding on ways to stabilize the individual market after the collapse of GOP efforts to repeal the Affordable Care Act, or Obamacare.

Senators on the HELP Committee had been aiming for a limited, short-term fix that could have provided relief from higher premiums for 18 million Americans who don’t have employer-based insurance but instead buy individual coverage on one of the marketplaces created under Obamacare.

The panel heard testimony last week from state insurance regulators and governors, who called for giving states more flexibility to design health insurance plans. They also asked the federal government to continue the cost-sharing payments that enable insurers to offer more affordable rates for low- and medium-income Americans.

Senator Alexander then announced last night that he would halt bipartisan hearings because no agreement could be reached. Depending on the outcome of the Graham-Cassidy vote, perhaps bipartisan work to shore up the individual marketplace may resume again later in the fall.

Contact Jill Alliman, AABC Government Affairs Committee Chair, with any questions or comments.

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