Transparency & Technology: A Winning Combination for Brokers
“Employers today are faced with an overwhelming amount of decisions when it comes to health care. However, the end goal always remains the same – to provide the best, most affordable options to employees.
But it’s nearly impossible for these owners to comb through the complicated benefits, HR, and compliance landscape…without some help.
Group Health Solutions, the benefits company of SDL + GHS, is an employee benefits agency in New York helping clients navigate the complex world of group and individual health insurance. They’re also a PrimePay Broker Concierge partner.
As managing director (with a specialty in group benefits) Rob Bujan explains, technology and transparency have been key players in their quest to make clients’ lives easier. Here’s how.
The right fit.
You get a great referral from a client who you’ve done business with for years. It has the potential for being a huge deal in your book of business and you’re excited about the opportunity. But, after meeting with the business owner, you realize that what you offer might not actually align with their goals as beautifully as you imagined. Disappointment ensues. Sound familiar?
Instead of trying to come up with a customized plan and make something work that really shouldn’t, GHS leads with transparency.
“Not everybody is going to be a great fit for every broker and not every broker is going to be a great fit for every client. And we’re pretty up front and honest about that. If we’re doing an evaluation on a client and we just feel that there’s really nothing that we can bring to the table, we’ll typically say, ‘Give us five minutes. Let us explain our technology and if this is something that you think that would benefit you, then let’s continue the conversation.’ We’re just not going through an arduous sales process just to get a client on the books,” explained Bujan.
Bujan has been in the employee benefits industry for over 25 years and truly believes in this code of ethics. He understands that people are very concerned about what’s going to happen with the hot button issues of health care, mergers, the individual market, Medicare/Medicaid, etc. And though commissions have been gutted over the last 10 years, he still takes it upon himself to do all that he can to take that fear away from clients.
“We give back to the community and often provide services for individuals who need to get enrolled on Medicaid and or need guidance in the individual market. It’s not just about making money; we should really be a good corporate neighbor. We’re an expert for a reason and there’s times that we need to be able to give that expertise to our community or to our clients without expecting anything back from it,” said Bujan.
Transparency is such an important factor of a healthy business relationship. Strong relationships are built on trust and the key to gaining that trust is transparency. Proactive, honest communication will lead to better results.
In what ways have you practiced transparency at your agency?
Technology for everyone.
“No, I don’t want to have more time to focus on my work,” – said no one ever.
GHS sells themselves as a technology-driven organization with a depth of knowledge of benefits that can help solve common HR problems.
“Thanks to our technology, we have the ability to assess an employer’s need and fix their pain points of having too much to do and not enough time,” said Bujan.
Having the right tools in place to streamline processes is a necessary first step in easing your clients’ worries. The second (and crucial) step is adding the human element and support to back up that technology.
There are so many benefits to becoming a technology-driven agency. A lot of times, business owners are hesitant to add more options for coverage because of the exhausting (and tricky) paperwork. But Bujan says, “In the last two months, I have three solid examples of how we’ve been able to refocus clients on hiring and employee engagement and benefits and get them in compliance by following up on the paperwork nightmare they’re in.”
Technology can help increase ease of integration with different carriers, streamline communication and open a world full of greater efficiencies for your clients.
How has technology helped your agency?
Bonus: Integration with PrimePay and Employee Navigator.
GHS and PrimePay have been working together for several years.
“We make it easier for clients to have happier employees when we transition them from one of your competitors over to your services,” said Bujan.
And with PrimePay’s recent integration with Employee Navigator, Bujan is excited for the opportunities to come.
“When we started working with Employee Navigator, we needed to really find some more efficiencies with regard to eligibility and employee benefits. Section 125 programs are all complicated, but we felt that PrimePay offered the fix and was able to dig down and make something good happen. We talked to both Employee Navigator and PrimePay and hoped that they would be able to enter a partnership which they now have so we’re really excited about that,” he said.”
CITATION: Fausnaught, R. (2018, January). Transparency & Technology: A Winning Combination for Brokers. Retrieved from: https://primepay.com/blog/transparency-technology-winning-combination-brokers
CHIP has a six year reprieve, but at what cost?
The Child Health Insurance Program (CHIP) has been renewed for 6 years. The program expired on October 1, 2017, yet Congress delayed and could not come together to give the bipartisan program a revamp. The delay was pointless, costly, a detrimental to necessary public health initiatives for our low-income citizens. Everyone (me, you, and our elected Congress) knew the law would ultimately pass.
Some members of Congress did take up the good fight. Regretfully, this fight had to mix with Repeal and Replace (twice), then hold out for further clout, and only when the government shut down did our elected officials decide what they were willing to barter in order to renew and open up funding for state CHIP plans.
Four months – a third of a year– we let a vulnerable population teeter on the edge of medical coverage uncertainty. Parents of pediatric patients with life-threatening conditions waited with baited breath to see if they could afford treatment for their children.
Why was affordable health care coverage for American children unnecessarily given the run-around for so long and at what price? This political holdout had hard and soft dollar costs that we cannot recoup – money that could have been better spent on care for our children, but instead, it ended up in waste and allowed for interruptions in care.
Let’s take a look:
-The potential cost to shut down and freeze the Virginia CHIP Program in December: $300,000. Understand that VA, AL, CO & UT were facing a 1/31/18 shut down and they needed a minimum of 6 weeks to get systems set for a shutdown.
-Even with funding being secured, as late as December 27, Carolyn Engelhard, Associate Professor at the University of VA School of Medicine said it could cost Billions.
-VA, unsure of funding, paid $23,000 to send out letters notifying CHIP participants they may have to roll back coverage.
-Connecticut and Colorado sent out letters as well, assuming it cost them approximately the same as Virginia, that’s another $46,000 wasted.
Virginia is quite transparent with their public health spending records. Looking at the cost of a well visit for a child based in 2015 ($117) and if we increased it by 20% since the data is 3 years old, – we’ll assume that today the same well visit today would cost $141.
Let’s keep it simple – those warning letters and the potential system slow down cost $323,000 in Virginia. This same money could have been used to fund ~2,290 well-child visits.
New communications will be sent to CHIP participants that were affected (another $23k). New procedures and policies will be drafted to prevent this from happening in the future. At the end of the day, we will hear that the children were taken care of, but undeniably this whole debacle was not fiscally responsible, nor pursued with any compassion toward American families that were affected. These families will remember the stress and uncertainty of this debacle for years to come. Once a strong, functioning, and reliable government program, CHIP is now perceived as vulnerable.
From a bird’s eye view, the CHIP funding delay should be remembered as a giant waste of our tax dollars and government spending. Isn’t the goal supposed to be curbing government waste and spending? And shouldn’t we want to ensure that those at risk are protected?
In 2018, isn’t THIS something we can all stand together on?
Words from Executive Director, Rob Bujan: https://pullingtheplugonhealthcare.blogspot.com/
Social Security, Medicare & Cheese
I remember visiting my grandmother in Texas as a child in the summer and she would have these frozen blocks of government “cheese” in her freezer. Massive blocks – with important looking seals and eagles. She got them to give to neighbors when they were in need.
Apparently – this cheese was part of a larger program with the US Government when stockpiles got so large, they gave it away. It was an entitlement, you didn’t have to pay for the cheese, it was just given to you if you were entitled to it.
This week, as I was listening to the never-ending pundits and politicians talk about the tax bill, one high ranking house leader mentioned that because of the bill, we are going to have to make cuts to entitlement programs, such as Medicare & Social Security. $25B in Medicare cuts. (AARP is not a fan, as you can imagine)
That gave me pause – so I googled entitlement and it brings up three definitions: 1. the fact of having a right to something, 2. the amount to which a person has a right, 3. the belief that tone is inherently deserving of privileges or special treatment.
Let’s start with Social Security – signed into law by President Roosevelt on August 14, 1935, it created a social program to pay retired workers an income after retirement. Taxes were collected starting in 1937 and regular benefits paid out starting in January 1940. Who is eligible for this benefit – anyone who has worked for at least 10 years.
Now on to Medicare – The Medicare Act (Title XVII of the SS Act) was signed into law by President Johnson on July 30, 1965. IT established Medicare, health coverage for the elderly and Medicaid a program for the poor. Workers pay a tax for Medicare. Who is eligible for this benefit – anyone who has worked for at least 10 years. Then you are able to get Part A at no cost (hospital) and you pay a premium for Part B (outpatient or doctor services) – based on your income.
A couple who both make $44,000 in 2012 dollars who turned 65 in 2010 would have paid $722,000 into Social Security and Medicare.
So if we apply the facts of these two programs to the definition of entitlement, I guess I can make a case that under definition 1 & 2 – someone would have the right to something – that they paid for their whole life – so if this was why it was an entitlement, I guess home ownership or automobiles are entitlements too.
Now, let’s look at 3 – the belief that you are deserving of special treatment – that doesn’t hold water – one pays into this program and you have to meet certain criteria in order to be eligible for the benefits, i.e. working 10 years. I don’t think that I would define work as a special treatment.
So – in a nutshell:
- Cheese = OK, an entitlement
- Healthcare for seniors or children and retirement benefits = money out of hard-working Americans’ pockets, not an entitlement.
$25B in cuts is a lot of cheese, isn’t it?
P.S. – And I use the term “cheese” loosely.
New York Paid Family Leave – Checklist
Mandatory Paid Family Leave compliance will be here before you know it. Now is the time to start preparing to ensure success in addressing PFL. We are here to help lead you through the appropriate steps to make this transition as smooth as possible. Here is a brief checklist addressing key factors to get you ready for Paid Family Leave next year.
Will your 2017 tax return be returned by the IRS because of your health insurance?
From Managing Director of SDL + GHS, Rob Bujan’s Blog, ‘Pulling the plug on Healthcare in the US’
“When you took a test in school and you didn’t know an answer, or you just didn’t feel like answering the question, you might have skipped it. In school, that question would have been marked wrong, but more than likely, your teacher still accepted the test.
Well, the IRS is not a teacher and we live in a whole new world today.
The IRS has recently announced that when filing your income taxes you can no longer be silent on the question of whether or not you have had health insurance during the tax year. Read more about this here. If you skip this question, you will not be able to file your taxes. So – prepare now to answer the question – whether it be yes or no, they want to know and they are going to make a point of having you tell them.
Make sure to note this when having a conversation with your accountant.
And while I normally don’t need to say this, I am not an accountant or a tax attorney, nor do I play one on television – this is my personal blog that I provide information gathered in my worldly & exotic travels as a benefits consultant.”
CBO Releases Updated Score of AHCA – 51 Million to Be Uninsured, Government Savings of $119 Billion
CBO Releases Updated Score of AHCA – 51 Million to Be Uninsured, Government Savings of $119 Billion
May 26, 2017
The Congressional Budget Office (CBO) released their highly anticipated updated report on the American Health Care Act (AHCA) on Wednesday, showing that the bill would save the government $119 billion and that an additional 23 million would be uninsured to bring a total of 51 million Americans without insurance. This amounts to a net increase of 3 million additional uninsured from before the ACA was signed into law, when 48 million didn’t have coverage. The previous score released in March projected that the bill would save the government $150 billion (revised down from an initial savings of $337 billion) and would lead to 24 million newly uninsured. The CBO is the nonpartisan group tasked with determining the cost of legislation to the federal government, both in a loss of revenue and increase in spending.
The updated report was necessitated by the adoption of several amendments to the AHCA from the last time the bill had been scored. The most prominent of these was the amendment offered by Representative Tom MacArthur (R-NJ) to allow states to receive a waiver to opt out of the ACA’s essential health benefits and age and community rating provisions. These waivers would be contingent on reducing average premiums, increasing enrollment, stabilizing the market, stabilizing premiums for individuals with pre-existing conditions, or increasing the choice of health plans. In turn, states could propose one of the following:
Increase the state’s age-rating bands. The state must specify a higher age-rating band, generally defaulted at 5:1 under other sections of the AHCA, although states could opt for higher ratios.
Establish state-based requirements for essential health benefits (EHBs) in the individual and small group markets beginning in 2020. The state must precisely specify both the benefit categories and the specific benefits within the categories. This could include overriding the ACA’s prohibitions of lifetime and annual limits and cap on out-of-pocket expenditures, which could also be applied to large group and self-insured employer plans.
Permit insurers to price policies based on health status. This substitutes the AHCA’s original continuous coverage incentive’s late-enrollment penalty to allow insurers to charge higher premiums for consumers who do not maintain continuous coverage (defined as a lapse of 63 days+ over 12 months). It is important to note that the amendment would not allow states to automatically rate up consumers with pre-existing conditions. The amendment only allows for insurers to underwrite consumers with pre-existing conditions if they do not have continuous coverage in states where a waiver has met all conditions to be approved.
Waivers may be approved for a period of up to 10 years, providing they continue to meet the conditions of the waiver, and any waiver submitted by a state would be automatically approved if they are not notified of a denial within 60-days of submission. Waivers that seek to permit health status underwriting would also be contingent on the state providing financial assistance to high-risk individuals to obtain individual market coverage, providing incentives to appropriate entities to help stabilize premiums, and participating in the “Federal Invisible Risk Sharing Program,” which includes $15 billion in federal funding between 2018 and 2026 as a reinsurance mechanism to reimburse insurers for high-cost plan enrollees.
The invisible risk sharing funding was joined by two additional high-risk funding pools to bring a total of $138 billion in the amended bill overall. The original bill included $100 billion over 10 years for the Patient and State Stability Fund, and in addition to the $15 billion in invisible risk sharing, the two other amendments passed since the bill was initially considered in March include $15 billion for funding for maternity, mental health, and substance abuse care, and $8 billion specifically added for additional high-risk pool funding as a result of the MacArthur Amendment. The CBO report cautions that this funding would have a small effect and not be sufficient to reduce large increases for high-cost enrollees. For comparison, the report notes that the ACA’s pre-existing condition insurance pool covered 100,000 enrollees at a cost of $2.5 billion over two years. Further, the Patient and State Stability Fund would require significant funding by states in the out-years; states would initially only be required to provide 7% of matching funds, but this would grow to 50% required by 2026.
With these amendments and the increased state flexibility for how the AHCA would now be implemented at the state level, the CBO performed an extensive analysis of the impact of the legislation. Overall, the CBO found that it would result in a net savings to the federal government of $119 billion, a result of $1.1 trillion in reduced spending over 10 years while revenues would be reduced by $992 billion. The bulk of the reduced spending, $834 billion, comes from repealing the ACA’s Medicaid expansion and another $236 billion comes from replacing the current advanced premium tax credits ($665 billion) with less generous tax credits in the AHCA ($375 billion).
The reduced revenue is largely due to repealing the majority of the ACA’s taxes (a loss of $664 billion in revenue), of which $275 billion would come from eliminating the net investment tax, $145 billion from the health insurance tax (HIT), and additional lost revenue from taxes unrelated to health coverage proposals. The CBO also projects that delaying the Cadillac/excise tax until fiscal year (FY) 2025, as written in the AHCA, would cost the federal government $49 billion in lost revenue. Revenue would further be reduced by effectively eliminating the ACA’s individual and employer mandates by reducing those penalties to $0, although they would still statutorily exist. The employer mandate makes up most of this at $171 billion, while individual penalties would result in $38 billion in lost revenue.
The biggest cause of the increase in the uninsured rate is due to the elimination of these penalties. As with the previous report, the new report estimates that 14 million Americans would become newly uninsured next year under the AHCA, gradually increasing to 23 million for a total of 51 uninsured by 2026. The AHCA as amended would not result in as many individuals losing employer-sponsored insurance (ESI) as previously estimated. The CBO projects that there would be 1 million fewer people enrolled in ESI in 2020 (compared to 2 million in the previous estimate) and by 2026 there would be 3 million fewer enrolled in ESI, compared to 7 million as previously projected. The revised estimates are largely due to individual health insurance being far less comprehensive and individuals opting to enroll in employer coverage instead to avoid higher out-of-pocket expenses.
The employer-based market currently enrolls more than 175 million Americans in health insurance coverage and NAHU strongly supports measures to maintain this system. As with the previous CBO report, NAHU remains concerned about the impact of the AHCA on ESI. The new report reiterates the previous assumption, which projected a gradual erosion of ESI, stating that over time, some employers would decline to offer insurance to their employees due to the loss of the mandate penalties and because the AHCA’s tax credits would be available to a broader group of individuals than those under the ACA. It expects that both employers and employees would decide against coverage, with some employers opting to drop coverage as employees would be eligible for tax credits, and some individuals who are offered ESI choosing not to enroll given the absence of tax penalties for being uninsured. Notably, previous CBO reports similarly expected that the ACA would result in a drop in employer-based coverage, a projection that has not materialized.
The report notes that premiums would generally be lower in the individual market because the health plans would be less comprehensive and cover fewer benefits and a smaller share of healthcare costs for the consumer. Additionally, there would be considerable cost-shifting on enrollees with significantly more out-of-pocket expenses, particularly those enrollees who use services that are no longer covered by plans, who would see substantial increases in out-of-pocket expenses. The CBO projects that consumers in this situation, such as those who require expensive prescription drugs no longer covered by health plans, could have increases of thousands of dollars in out-of-pocket expenses each year. Some consumers may choose to purchase policies with riders for specific conditions for this reason, particularly for maternity coverage.
The report notes that while premiums would generally go down for individual market insurance, net premiums after factoring for tax credits would range considerably depending on the particular consumer. Older people with lower incomes would see dramatic increases in their net premiums, while younger people with lower incomes would see little change, and people with higher incomes would see their net premiums reduced as they could access tax credits previously unavailable to them. And while overall more individuals will be able to access the tax credits under the AHCA, those subsides are far less generous than those under the ACA. The report illustrates the effect on a 64-year-old at 175% of the poverty level; under current law with a $15,300 premium, they would have a tax credit of $13,600 and a net premium of $1,700; under the AHCA’s flat tax credits, they would only be eligible for a tax credit of $4,900 and with an adjusted premium of $21,000, they would face a net cost of $16,100 in premiums alone—nearly ten-fold over the ACA and roughly 60% of their total annual income on health insurance premiums alone.
Additionally, some individuals may be able to purchase policies that would have no net cost to them, as the existence of a baseline level of tax credits could encourage some insurers to offer skinny plans at the value of the tax credit. However, the CBO cautions that these plans would effectively not provide enough financial protection in the event of catastrophic care needs to legitimately be considered insurance.
The CBO effectively made three separate estimates based on how states could respond to the AHCA as passed with the MacArthur Amendment. The first is the group of states that choose not to apply for waivers, which cover roughly half of the population, and would likely be among the seven states that prohibited medical underwriting before the ACA. The second is those that apply for limited waivers, which cover a third of the population, and would be likely be among the 11 states that had limitations on medical underwriting. And the third is states that apply for waivers to significantly modify EHBs and community rating rules, which cover a sixth of the population, and are among the 32 states that had no limitations on medical underwriting. States with lower premiums would generally fall with those that eliminate one or more EHB categories that were not typically available prior to the ACA.
The AHCA would bring needed stability for much of the country’s health insurance markets; however, states that choose to pursue the waivers created under the MacArthur Amendment would conversely become more destabilized. The states that opt for waivers to allow for medical underwriting or to modify their EHBs to eliminate the ACA’s ban on annual and lifetime limits would lead to significant increases in expenses for some consumers. The CBO notes that many of these individuals with pre-existing conditions could face markets where coverage would be either prohibitively expensive or they might not be able to purchase coverage at all. Additionally, many consumers move in and out of the individual market as access to insurance changes and many of these could fail to meet the continuous coverage requirement. As healthier consumers move to medically underwritten plans, the community-rated plans will become increasingly filled with less healthy consumers, and therefore become increasingly more destabilized.
The updated CBO report marks an important milestone for the AHCA. Republicans tasked themselves with coming up with a reconciliation bill that would reduce the deficit by a minimum of $2 billion over 10 years. After passing the AHCA as amended without an updated score, the House had initially delayed sending it over to the Senate to ensure that it would meet the benchmarks laid out in the reconciliation instructions. Had the CBO report indicated that the bill didn’t meet these requirements, the House would have had to once again vote on an updated bill that would meet them. And had the bill already been enrolled by the Senate with a score that didn’t meet the requirements, they would no longer have been able to use the FY 2017 reconciliation vehicle for healthcare and either would have had to use the FY 2018 reconciliation vehicle they planned for tax reform, or wait until next year to try again. Because the new score by the CBO meets the requirement by projecting a net savings of $119 billion, the bill can now be enrolled with the Senate and they can formally begin deliberations on their version of health reform.
The American Health Care Act (AHCA) Passes the U.S. House
From CIGNA Informed on Reform
Today the U.S. House of Representatives passed an amended version of the American Health Care Act (AHCA) by a vote of 217-213. House Republicans crafted the AHCA as a budget reconciliation bill to repeal parts of the Affordable Care Act (ACA). The bill was previously debated on the House floor, but pulled before a full vote on March 24. Since that time, several amendments were added to the bill, paving the way for Republican leadership to reintroduce the bill for a successful vote.
Passage of the bill in the House marks a milestone in the Republican efforts to repeal and replace the ACA; however, the bill will face new challenges in the Senate. Here’s what we currently know — and don’t know — about the next steps to help you stay informed.
What’s Next: AHCA Moves to the U.S. Senate
Without bi-partisan support, Congressional Republicans cannot fully repeal the ACA in one action. By using the budget reconciliation process, only a simple majority (51 votes) is needed for passage in the Senate — and there are 52 Republican senators. Even with a Republican majority, the bill faces an unclear path forward.
The Republican leadership in the Senate will first need to decide if they want to consider and amend the House bill, or substitute their own version of a reconciliation bill, which may contain parts of the House bill.
Additionally, the Senate must follow procedural rules that don’t apply in the House. Under Senate reconciliation rules, the nonpartisan Senate Parliamentarian must first review and confirm the bill and any amendments comply with the rules for reconciliation, known as the Byrd Rule. For example, insurance market reforms that are currently in the AHCA may not be allowable under the Byrd Rule, if it is determined they don’t have direct spending impact.
The Parliamentarian’s analysis requires a Congressional Budget Office (CBO) score (cost estimate). While the CBO scored an earlier version of the AHCA, the recent amendments require the CBO to update its cost estimate, meaning it could be a few weeks before the Senate can bring a bill to the floor for debate and an eventual vote.
Identical versions of the bill must pass both chambers before being signed by the President and becoming law. If the Senate passes a bill that isn’t identical to what the House passed, there are two paths forward: 1) the House could pass the Senate bill and send it to the President; or 2) a bicameral conference committee can meet to negotiate a new compromise bill. That negotiated bill would then have to be passed by both chambers, before sending it to the President for signature. It is unclear which option might be used in this instance.
Timing is unclear for these next steps to occur, but there continues to be support from the Administration to move forward with repeal and replace of the ACA this year.
Reminder: ACA Compliance is Required Until Official Guidance Otherwise
As a reminder, ACA compliance is required until official guidance to the contrary is issued. The House passage of the AHCA is the first of several required steps before any official changes are enacted. For a customized timeline and more information about ongoing annual responsibilities and applicable employer deadlines under the ACA, visit YourACARoadmap.com.
To stay up to date on the evolving state of health care reform, visit www.InformedOnReform.com, including the new Repeal and Replace Update webpage. This page offers a snapshot of the latest regulatory and legislative activity.
Republicans Moving Forward on AHCA with Possible Vote Next Week
House Republicans are continuing their efforts to pass the American Health Care Act after they were unable to hold a vote on the bill last month due to a lack of support within the caucus. An amendment introduced this week to allow states to opt out of parts of the ACA could help increase support for the package, although whether it will be enough to pass with a majority of the House remains unclear. At least 15 House Republicans have publicly stated they will still not support the bill even with the current amendment, and another two dozen are leaning no or are undecided, some of whom previously publicly supported the bill. This continues to cast doubt on the ability to reach the necessary 216 votes for passage in the lower chamber as Republicans can only afford to lose 22 votes. Late yesterday, House Republican leadership announced that after initially considering a vote this week at the White House’s request, they would postpone a vote until next week at the earliest.
As we noted last week, the amendment to allow for more state flexibility in the ACA requirements would join an earlier amendment already approved by the House Rules Committee creating a $15 billion “Federal Invisible Risk Sharing Program.” The new amendment was worked out between Representatives Tom MacArthur (R-NJ) and Mark Meadows (R-NC), who lead the centrist Tuesday Group and far-right Freedom Caucus, respectively. The amendment would allow states to receive a waiver from the Department of Health and Human Services to opt out of the ACA’s essential health benefits and age and community rating provisions by proposing at least one of the following: reduce average premiums for coverage, increase enrollment, stabilize the market, stabilize premiums for individuals with pre-existing conditions, and increase the choice of health plans. The waiver would be contingent on the state setting up a high-risk pool for consumers with preexisting conditions.
The amendment was a welcome change for the House Freedom Caucus, the group of the most conservative members of the Republican Party, who largely opposed the last iteration of the AHCA for failing to fully repeal the ACA. Notably, Representatives Jim Jordan (R-OH), Raul Labrador (R-ID), Dave Brat (R-VA) and Scott DesJarlais (R-TN), all who vehemently opposed the previous bill, now have publically stated they will support the bill with the amendment. The group made a tepid but official endorsement of the amendment this week, acknowledging that while the bill with the amendment still falls short of their demands, it does help to deliver on their promise to repeal key provisions of the ACA and they would work with the Senate on other ways to improve the bill. The Freedom Caucus requires that 80% of its members support a legislative item in order to garner an official endorsement.
The tradeoff to garnering the support of the Freedom Caucus and its roughly three-dozen members is that it threatens the lukewarm support of more moderate members, as well as potential support from Republicans who previously opposed the AHCA for dropping ACA coverage and consumer protections for their constituents. The Congressional Budget Office had already released a report claiming that as many as 52 million Americans would be uninsured under the AHCA, and the new amendment is likely to further increase the number of uninsured while also eroding the ACA’s consumer protections. The CBO has yet to release an updated score of the new bill with the latest amendments, and many centrist Republicans are unlikely to support the bill without a new score.
The centrist Tuesday Group, led in part by MacArthur, has not offered an endorsement of the deal brokered by its leader, and the Freedom Caucus and many of its roughly 50 members continue to express reservations about the bill and claim that negotiations are moving further away as concessions are made to the far right of the party. Among the biggest objections is over consumers with preexisting conditions, as Representative Mario Diaz-Balart (R-FL) said this week: “My concern has always been [about] what a lot of us talked about: people with pre-existing conditions, the elderly. Where is the part that is better for the folks I’m concerned about it? I’m not seeing it at this stage.”
The hesitation among centrists is in part coming on the waves of fervent opposition of many industry groups that are continuing to push hard against the bill. AARP claims that the amendment would cause premiums for the sickest patients to increase to more than $25,000 per year and the Catholic Health Association stated, “the recent amendments…are even more disastrous for people who have just gotten healthcare. This is contrary to the spirit of who we are as a nation, a giant step backward that should be resisted.” Additionally, the American Medical Association, American Hospital Association and America’s Essential Hospitals all voiced strong opposition to the bill. The AMA claimed that the amendment to the bill “could effectively make coverage completely unaffordable to people with preexisting conditions” while the AHA said that the amendment would “dramatically worsen the bill.” And health economist Craig Garthwaite noted, “This reads like another example of a policy written by people who either don’t know or don’t care about how health markets work.”
The continued outside pressure among industry groups on centrist Republicans to oppose the bill with the recent amendments continues to put into question whether House Republicans will be able to pass the AHCA out of the lower chamber and send it to the Senate for consideration, where the bill is even more in question. Both centrist Republicans and far-right members had previously expressed strong reservations about provisions of the AHCA. This includes Senators Rob Portman (R-OH), Lisa Murkowski (R-AK), Susan Collins (R-ME), Ted Cruz (R-TX), Rand Paul (R-KY), Mike Lee (R-UT), James Lankford (R-OK) and Tom Cotton (R-AR), all of whom have expressed concern either for the AHCA going too far or not far enough. There is an even narrower margin for passage in the Senate, where Republicans can only afford to lose two votes, assuming that Vice President Mike Pence would cast a tie-breaking vote.
As the negotiations continue, it is becoming increasingly clear that Republican voters are holding the Administration and Congress accountable for the future of health reform. A new poll shows that a majority of Republican voters (53%) now believe Trump and congressional Republicans are responsible for the ACA, up from just a third of respondents only two weeks ago. Fully three in four voters overall say that the president and Congress should focus on making the ACA work and they are responsible for any consequences of health reform moving forward. Previously, the president had said he would cast blame on Democrats for any of the law’s failures and would use them as leverage for passing his own priorities. But with Republicans now placing the onus on their own party, there will be more of an incentive to ensure that any reforms put forward will not cause any further harm on their constituents.
Congress Returns: Planning Another Vote on the AHCA as Government Shutdown Looms
Congress Returns: Planning Another Vote on the AHCA as Government Shutdown Looms
Following their two-week recess, Congress is set to return on Tuesday and will possibly hold a vote on the American Health Care Act (AHCA) as soon as Wednesday. After a push from the Trump Administration to hold a vote on the bill before the president’s 100th day in office (April 30th), House Republicans have been working to find an agreement within their party to be able to bring the ACHA for consideration again following decision last month to scrap the vote on the bill. An amendment this week could help win support from several “no” votes, but it is unclear if it will be enough to pass the chamber ahead of this week’s deadline. And while House Republicans work on this deal, they must also face a tighter deadline to avoid a government shutdown on Friday.
The new text of the bill has not yet been released, but is expected to include an amendment to the AHCA worked out between Representatives Tom MacArthur (R-NJ) and Mark Meadows (R-NC), who lead the centrist Tuesday Group and far-right Freedom Caucus, respectively. The AHCA currently strips out the ACA’s essential health benefits, but this amendment would reinstate them as a measure to win support from centrist Republicans. And in an effort to win support from far-right Republicans, the amendment would grants states waivers to create their own essential health benefits and allow insurers to charge consumers with pre-existing conditions higher premiums, contingent on the state setting up a high-risk pool for these consumers.
Before the AHCA was pulled from a vote last month, there were upwards of 50 House Republicans who were voicing opposition to the law or strong reservations about voting for it for a myriad of reasons. However, it is not clear whether this amendment or the amendment creating a $15 billion “Federal Invisible Risk Sharing Program” will be enough to win support of enough House Republicans to be able to reach the necessary 216 votes for passage. With 238 Republicans in the House, Republicans can only afford to lose 22 votes for the bill to pass the lower chamber. And assuming that it passes the House, it will still need to make its way through the Senate, where it can only afford to lose two votes, while as many as six Republican senators have expressed reservations over the bill.
Representative Meadows claims that the new amendment will bring along as many as two-dozen members of the Freedom Caucus. But many members of both the Freedom Caucus and Tuesday Group have said the amendments don’t address the things they had concerns about, they weren’t part of negotiations on these amendments, and neither Meadows nor MacArthur got approval of the changes from their groups before agreeing to the deal. Further, these amendments had previously been rejected by Republicans in the lead-up to the AHCA last month.
While House Republicans continue working on negotiations ahead of a White House imposed deadline to hold a vote this week, they must also contend with another more pressing deadline of keeping the government funded. Without legislation to keep the government open or a short-term stop-gap, government funding is set to expire next Friday. And after the government shutdown of 2013 when Democrats held the Senate and White House and both parties faced blame for the shutdown, now that Republicans control both chambers of Congress and the White House, the pressure falls entirely on them.
In recent years, Republicans in the House have largely been unable to win support from enough of their members to pass a continuing resolution (CR) without the support of Democrats. There are several key points of disagreement that currently threaten the passage of the current spending bill: funding for a border wall, preventing federal funds from going to “sanctuary cities,” additional defense spending, benefits for coal miners, and funding for the ACA’s cost-sharing reduction (CSR) program.
As we noted last week, the CSR program is being considered in negotiations by both parties and both are hoping to use the program as leverage in their negotiations. The Trump Administration is currently defending a lawsuit by House Republicans that the subsidies, which help offset out-of-pocket expenses for silver-tiered plans purchased through the marketplaces for households with incomes up to 250% of the federal poverty level, are illegal. And they have until May 22 to determine if they will continue to defend the lawsuit. If not, then the payments made by the government to insurers would cease, while insurers would still be required to provide the subsidy amounts owed to individuals—an amount of roughly $7 billion annually across all insurers. This could result in many insurers opting to immediately withdraw from the marketplaces and leaving millions without coverage.
Democrats are threatening to withhold support of the spending bills, and thereby jeopardizing a government shutdown, if funds for the CSR program are not included in the spending bills. Yesterday, Director of the Office of Management and Budget Mike Mulvaney indicated that the White House is willing to negotiate on funding the subsidies in a spending package if Democrats will go along with several of the White House’s legislative priorities, such as increased defense spending and border security funding.
Earlier this week, a group of health insurance officials met with Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma to discuss the subsidies. The group reported that they didn’t get clarity from Verma that CMS would continue to fund the CSR program, with Verma noting that she doesn’t have the power to make the decision. America’s Health Insurance Plans led the meeting and was joined by the Blue Cross Blue Shield Association and several large regional health plans, including Molina Healthcare, Geisinger Health Plan, Oscar Insurance Company, Kaiser Permanente and Health Care Service Corp.
As negotiations continue on both the AHCA and legislation to avoid a government shutdown, NAHU will continue to advocate for legislation and regulation to stabilize both the individual and employer-sponsored health insurance market for the coming years. This includes working to make changes to the parts of the ACA for which we are able to get consensus on a bipartisan basis, such as permanent repeals (or short of that, continued delays) of the Cadillac/excise Tax and the Health Insurance Tax (HIT). We will also continue to work with Health and Human Services Secretary Tom Price to improve market stability through regulations, and with our state chapters to pursue 1332 Waivers for the states.
Final Regulations Issued for Individual Market Stabilization
Final Regulations Issued for Individual Market Stabilization
From NAHU April 14, 2017
Yesterday, the Centers for Medicare and Medicaid Services (CMS) released the final market stability rule. The 139-page rule was largely unchanged from the proposal that was released in February and which NAHU submitted comments on in March. As proposed, the 2018 open enrollment period (OEP) will run from November 1, 2017, through December 15, 2017, which CMS has specifically designed to overlap with Medicare and most employer plan enrollments, even though NAHU has repeatedly noted the burden this places on agents. The rule also finalizes tighter restrictions on special enrollment period (SEP) eligibility, applies a more rigorous test for uses of the exceptional circumstances SEPs, and will now require these to be verified by supporting documentation.
Additionally, the final rule changes the actuarial value standard to allow a variation from -4 to +2 percentage points (except for bronze plans, which can vary -4 to +5 percentage points) and finalizes the proposal to rely on states for network adequacy reviews. It will reverse earlier guidance on the Essential Community Providers threshold requirement, and will now require that the network includes at least 20% as participating practitioners as it was for the 2014 plan year that was then increased to 30% for 2015. Finally, the rule will not impose continuous coverage requirements, such as imposing a 90-day waiting period, late enrollment penalty, or requiring 6-12 months of prior coverage; however, CMS will explore other policies to promote continuous coverage.
Notably, the rule did not address two critical issues that could have the greatest impact on the overall stability of the marketplace: whether the administration plans to fund the cost-sharing reduction (CSR) payment program, and whether the administration will enforce the individual mandate. However, neither of those provisions were included in the proposed rule.
Change the 2018 OEP from November 1, 2017-January 31, 2018, to November 1-December 15, 2017.
Noted issues with the overlap of the proposed OEP with the Medicare annual enrollment period and the OEP for many employer-sponsored plans that operate on a calendar-year basis.
Requested that in future years there should be three distinct open-enrollment windows.
Requested that state-based exchanges and all off-exchange individual-market issuers be required to align with the federal individual-market open-enrollment dates.
No change from proposal; the OEP will run from November 1, 2017, through December 15, 2017.
CMS noted that this was purposely done to more closely align with Medicare and the private market.
State-based exchanges (SBEs) that can’t meet the new OEP will be allowed to supplement with a special enrollment period as a transitional measure.
All new marketplace consumers during a SEP must complete expanded pre-enrollment verification. Applications would be “pended” and not released to the issuer until eligibility is confirmed. Consumers would have 30 days to provide documentation.
Supported the proposal to require appropriate documentation prior to the effectuation of coverage and the proposed 30-day timeframe for document submission.
Requested better verification standards on involuntary loss of eligibility for minimum essential coverage (MEC), such as if an individual who previously had access to group coverage through an employer but chose not to enroll, and then lost such eligibility mid-year due to a discontinuation of the employer group plan.
No changes from proposal; consumers will have 30 days from the date of qualified health plan (QHP) selection to provide documentation; enrollment will be delayed or “pended” until verification of eligibility is completed.
100% of new consumers enrolling in marketplace coverage through SEPs will need to complete pre-enrollment verification.
Will not require SBEs to conduct pre-enrollment verification, but recommend that SBEs that do not currently conduct pre-enrollment verification follow this approach.
Will begin pre-enrollment verification for SEPs in June 2017.
Tightening of SEP eligibility requirements relative to people who have a previous history of nonpayment of premiums, documentation of a move, and gaining a SEP for a marriage.
Requested that CMS change the 90-day grace period for recipients of advanced premium tax credits (APTCs) to make past-due premium payments prior to their insurance being terminated to 30 days to reflect exiting state policies for other coverage, and to prevent the risk-pool instability that results when individuals sign up for coverage, receive care and incur claims but do not ultimately make premium payments.
Suggested clarification that all special-circumstance cases are to be routed through the appeals process, including individuals who cannot obtain official documentation and individuals whose ability to obtain the documents eclipsed the 30 days allowed by the proposed rule.
Noted that the additional verification criteria of newly married couples is a different verification standard than what is used in the private individual market or employer-sponsored plans and requested consistency across markets.
Does not address changing the grace period from 90-days to 30-days.
Allows issuers to reject an enrollment for a record of termination due to non-payment of premiums by the individual, unless the individual fulfills obligations for premiums due for previous coverage.
Allows issuers to apply a premium payment to an individual’s past debt owed for coverage within the prior 12 months before applying the payment toward a new enrollment.
Verification criteria for newly married couples will be more stringent for exchange coverage because of the differences in the markets and the impacts on the risk pool warrant an approach in the individual market that diverges from long-standing rules and norms in the group market.
Medical Loss Ratio (not addressed in the proposed rule).
Requested that CMS allow for health insurance agent and broker commissions, as well as issuer fraud-prevention measures, be exempted from an issuer’s MLR calculation.
Not addressed in the final rule.
Age-Rating Bands (not addressed in the proposed rule).
Requested administrative action to expand the current age rating bands of 3:1 in the individual and small-group markets.
Requested CMS to rescind planned changes to the age rating rules for children age 15 and older finalized in the Notice of Benefit and Payment Parameters for 2018 and instead maintain the existing age-rating structure for children.
Requested that CMS grant state-based age-rating variations to allow for the return of small-group composite rates and more state-based variations.
Not addressed in the final rule.
Grandmothered Plans (not addressed in the proposed rule).
Recommended that CMS formally state that the federal transition policy will remain in effect until further notice and will not be rescinded until ACA statutory improvements are signed into law and can be fully implemented.
Not addressed in the final rule although guidance was released from CMS granting states the ability to determine whether to allow grandmothered plans through 2018.
NAHU Washington Update