House Budget Committee: Text of American Health Care Act for Markup

Here is the text of the American Health Care Act to be considered for markup by the U.S. House of Representatives Budget Committee this week. This is the consolidated bill after markup and passage last week by the House Energy and Commerce Committee and by the House Ways and Means Committee.  This is the bill that was analyzed by the Congressional Budget Office, which found that by 2026, 24 million more Americans would lose their health insurance under this bill.  The markup, originally scheduled for today, has been postponed to this Thursday, March 16, because of the snowstorm expected in Washington DC today.

Link to Original Source

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Congressional Budget Office: Cost Estimate for American Health Care Act

The Congressional Budget Office (CBO) has published its ten-year (2017-2026) cost estimate for the American Health Care Act (ACHA), the House of Representatives Republican plan to “repeal and replace” the Affordable Care Act (ACA).  The CBO estimates that by 2026, 24 million more Americans will become uninsured under the ACHA, compared to under the current law (the ACA). The number of Americans losing health insurance under the Republican plan would be immediate: 4 million would lose their health insurance this year, and 10 million more would lose their health insurance next year.

By 2026,with the increase in those uninsured under the ACHA, a total of 52 million Americans, or 19% of the U.S. population under age 65, would be uninsured. Today, under the ACA, only 10% of the U.S. population is uninsured. And for Americans with incomes below 200% of the federal poverty level, the percentage of uninsured by 2026 would be over 30%, and close to 40% for those ages 30-49.

Moreover, in the short term, the CBO estimates that average health insurance premiums in the individual health insurance markets (including the health insurance marketplaces created under the ACA) would increase between 15 to 20 percent in 2018-2019. Premiums would especially increase for older Americans because the ACHA allows health plans to charge premiums 5 times higher for older Americans. Overall, the average premiums would then decrease beginning in 2020 as other changes made by the ACHA get implemented and those age 50-64 begin to drop out of the individual market because they are being charged five times the premiums of younger Americans. Meanwhile, the CBO also estimates that out-of-pocket expenses such as responsibility for higher deductibles and co-payments will continue to increase under the ACHA, even for those continuing to pay those higher premiums for maintaining their health insurance. This means that even for those who remain insured, their health care premiums will actually purchase less health care (since they have to pay more for the health care they actually use through these  higher deductibles and co-payments).

The CBO estimates that the federal government would cut its spending on Medicaid by $880 billion over the ten years, resulting in significant cuts to states who now use federal matching dollars to support their Medicaid programs. The CBO concludes that, after the year 2020, when the ACHA changes Medicaid funding into fixed per capita caps (based on Medicaid spending 4 years earlier, in 2016), states would see a minimum annual reduction in Medicaid funding of at least 0.7%. As a result, 14 million Americans who would have been covered by Medicaid under the ACA will lose their health insurance by 2026.

One of the only pieces of good news in the CBO estimate for the Republican sponsors of the bill is that, by repealing the provisions that resulted in increased health insurance coverage, such as premium and cost-sharing subsidies for low-income Americans and the Medicaid expansion, the ACHA is estimated to result in total net federal government savings of $337 billion over the ten years between 2017-2026. However, the way in which those savings are achieved will carry a high price for the lowest income Americans. For example, while the ACHA includes some tax credits to assist in paying for health insurance, the ACHA’s tax credits over the ten years only total $361 billion, compared to the $673 billion that would have been provided under the ACA. In an understatement, the CBO states that the ACHA tax credits “would generally be less generous for those receiving subsidies under current law.” In fact, later in the report, the CBO concludes that the average tax subsidy would be reduced by 40% compared to the ACA. In other words, $312 billion in “savings” (of the total $337 billion in net savings) comes from taking away assistance from the neediest Americans so that they can afford health insurance. As a result, 10 million Americans will lose their coverage.

Moreover, the ACHA also includes massive tax cuts that results from the repeal of $883 billion in taxes on higher income Americans and taxes on health insurance plans, pharmaceutical companies, and medical device manufacturers. $274 billion of those tax cuts only benefit the richest 2% of Americans: $157 billion from repealing the additional 3.8% net investment tax and $117 billion from repealing the 0.9% Medicare tax; both these taxes only applied to single taxpayers earning over $200,000/year, or couples earning over $250,000/year. In addition, under the ACHA, individuals with incomes ABOVE 400 percent of the federal poverty level would receive tax credits that they currently don’t get (or in almost all cases, don’t need, so it is just a tax cut for the wealthiest). All these tax cuts only benefit higher income Americans and these health care industries, not the tens of millions of Americans who will lose their health insurance under the ACHA.

Link to Original Source

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Office of Management and Budget: Request for Additional Comments on Changes to Standards for Federal Data on Race and Ethnicity

The Office of Management and Budget has published a second request for comments about potential changes to the 1997 standards for maintaining, collecting, and presenting federal data on race and ethnicity. Similar to its first request of comments published in September 2016, this request seeks public comments about 1) whether the questions on race (American Indian/Alaska Native, Asian, Black/African American, Native Hawaiian and Other Pacific Islander, or White) and on ethnicity (Hispanic/Latino or not Hispanic/Latino) should be combined; 2) whether there should be a separate category for Middle Eastern and North African individuals; 3) whether these race and ethnicity minimum categories should be disaggregated (and what specific disaggregated categories should be required or encouraged) and 4) changes in terminology about these racial and ethnic categories.

In response its first request for comments, OMB received a total of 3,750 comments, including over 1,200 comments specifically supporting disaggregation of the Asian and the Native Hawaiian and Other Pacific Islander categories, and over 2,200 comments in support of a Middle Eastern and Northern African category.

Based on the recommendations of a federal Federal Interagency Working Group (IWG) for Research on Race and Ethnicity and its analysis of the public comments submitted, OMB has identified specific options for implementing each of these changes and seeks public comments on the identified options.

Comments are due on April 30 and may be submitted online.

Link to Original Source

The IWG report and recommendations also have been published:

Link to Original Source

The IWG also has published a Frequently Asked Questions (FAQs) about this second request for public comments:

Link to Original Source

The IWG itself references this lengthy report from the U.S. Census Bureau on the 2015 National Content Test related to race and ethnicity questions:

Link to Original Source

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Kaiser Family Foundation: Summary of the American Health Care Act

The Kaiser Family Foundation has published this summary of the American Health Care Act to be considered by the U.S. House of Representatives Ways and Means and Energy and Commerce Committees tomorrow, Wednesday March 8, 2017:

Link to Original Source

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House Republicans Finally Introduce American Health Care Act

On Monday March 7, 2017, nearly 7 years after the enactment of the Patient Protection and Affordable Care Act (ACA), Republicans in the U.S. House of Representatives have finally introduced the first drafts of what they are calling the American Health Care Act (ACHA). There are two first drafts, 57 pages to be considered by the House Ways and Means Committee and 66 pages to be considered by the House Energy and Commerce Committee, with “mark-up” beginning tomorrow morning March 8, less than 48 hours after finally releasing the legislative language. There will be no Congressional Budget Office analysis available so the fiscal impact on the U.S. federal budget and the personal impact on Americans will not be known before the House Committees begin approving the drafts and moving the legislation forward.

There are numerous parts of the two drafts, without any real logical order of topics, and with many different implementation and effective dates, which makes it even more difficult to understand how the legislation would impact health insurance coverage for millions of Americans. Here is some initial analysis, organized by date of implementation. This analysis highlights how long “repealing and replacing” the ACA will take, with many provisions to go into effect beginning in 2018, and most of the important provisions not effective until 2020.

Effective Immediately:

+ Repeal of the individual mandate (requirement to have health insurance coverage) and tax penalties (retroactive to January 2016)

+ Repeal of the employer mandate for large employers (requirement for employers to offer health insurance coverage to their employees) and tax penalties (retroactive to January 2016)

These repeals would make it less likely for employers to offer health insurance to their employees and less likely for individuals to obtain health insurance, especially younger, healthier Americans who otherwise help balance/reduce the costs of those insured; the result is less Americans insured, more costs for health insurance plans so they raise their premiums, which, in turn, makes health insurance less affordable for everyone else. These repeals undo two of the fundamental changes under the ACA that successfully countered the failure of health insurance plans to provide affordable health insurance coverage to Americans on their own.

+ Allows age rating, or variations in health insurance premiums based on age (higher prices for older Americans) up to a ratio of 5:1 (rather than ACA’s limit of 3:1)

+ Repeals the requirement that health plan provide “actuarial value” (premiums reflect estimated costs of care) and allows health plans to offer minimal plans that would only cover catastrophic medical expenses

These provisions allow higher premiums and health plans with less coverage, minimizing the choices of affordable, comprehensive health insurance coverage options. All these provisions will continue to de-stabilize the health insurance markets for individuals, with many unable to afford continued coverage, which in turns means even higher premiums, and less affordable options for those remaining in those markets. While the latter changes allow health plans to charge higher premiums, the continued instability of these markets also will drive some health plans to stop participating in the health insurance exchanges.

Effective Current Fiscal Year 2017 (through September 30, 2017): 

+ Eliminates all Medicaid and health plan funding for Planned Parenthood clinics for one year

This is a blatantly political, mean-spirited attack on Planned Parenthood, which already cannot receive any federal funding for abortion services; this defunds all Planned Parenthood clinics for ALL their health care services – including primary care, cancer screenings, contraception, and other sexual health services – for all their patients covered by Medicaid and any federally-funded health plan.

+ Provides $422 million in funding for community health centers

This is one of the only good things in the bill; without this appropriation, community health centers would have reverted to pre-ACA funding levels; however, this extension of funding is only for the one fiscal year, only postponing this serious cliff of loss of funding. The bill does not address the need for reauthorization and appropriations for the Children’s Health Insurance Program, which also expires in September 2017.

Effective Fiscal Year 2018 (beginning October 1, 2017):

+ Requires redetermination of eligibility for expanded Medicaid every 6 months

Requiring redetermination of eligibility more frequently than annually is a cynical but proven way to drop individuals from coverage; while the number of individuals who are found to be ineligible with more frequent redeterminations are always very small, not meeting the administrative requirements for redetermination in a timely manner (notice of redetermination not received because the individual moved, not responding to requests for updated documentation, etc.) results in loss of eligibility and coverage for many, especially those with lower education and health literacy, and limited English proficiency.

+ Repeals funding of the Prevention and Public Health Fund

This eliminates vital funding for prevention activities that save money in the long term; it also eliminates funding for the Racial and Ethnic Approaches Community Health (REACH) program

+ Creates $100 billion State Innovation Grant and Stability Program (over 9 years, through 2026) to states for high-risk pools, stabilizing private insurance premiums, providing cost-sharing subsidies, promoting preventive, dental, vision, mental health and substance use disorder services, and similar state activities

While this appears at first to be a lot of federal funding, this funding is for state governments (which could essentially keep the funds or give them to health plans) rather than to directly subsidize the costs of health care for Americans; and when divided among 50 states over 9 years, it doesn’t end up being very impactful.

Effective 2018:

+ Repeals tax on health insurance plans

+ Repeals excise tax on medical devices

+ Repeals drug manufacturer fee on branded prescription drugs

+ Repeals 10% sales tax on indoor tanning services

+ Repeals 0.9% Medicare Hospital Insurance payroll tax on high income individuals (income over $200,000; over $250,000 for joint filers)

+ Repeals 3.8% Medicare tax on unearned income for high income individuals (income over $200,000; over $250,000 for joint filers)

+ Repeals $500,000 limit of “ordinary and necessary” business expense deductions for compensation paid to health insurance officers, directors, and executive employees

+ Reduces minimum amount of medical expenses for tax deduction from 10% to 7.5% of the taxpayer’s adjusted gross income

These sections repeal most of the major revenue sources used to fund the ACA; without any analysis from the Congressional Budget Office, it is unknown how the American Health Care Act would be paid for, and what impact it will have on the federal deficit. Many of these repeals only benefit higher income taxpayers.

+ Creates a 30% premium penalty for individuals who have had a lapse in health insurance coverage (63 days or longer) to re-enroll in any coverage

Although the 30% premium penalty sounds high, this will actually create an perverse incentive for healthier Americans to wait until they need health care before enrolling; at that point, the one-time 30% penalty would often be less than the actual costs of health care; so rather than having a stable health insurance market where more Americans are covered and health plans have predictability about their costs, there will be these unpredictable re-entries into the health insurance market that will be costly and disruptive for both individuals and health plans.

+ Increases contribution limit for Health Savings Accounts (HSAs) to $6,550 for individuals and $13,100 for families (plus an additional $1,000 for individuals age 55 and over) to pay for costs of high deductible health plans

+ Eliminates limit of $2,500 on contributions to Flexible Savings Accounts

HSAs are only useful if an individual/family has sufficient income to “save” these amounts, to be used for deductibles, co-payments, and health-related costs such as over-the-counter medications; while these HSA contributions receive favorable tax treatment, they don’t help lower income families who don’t have the disposable income to save these amounts and use the savings for “excess” health care costs not covered by health insurance.

+ Restores Medicaid Disproportionate Share Hospital payments for states that did NOT expand Medicaid

+ Provides $10 billion (over five years, through 2022)  to states that did NOT expand Medicaid for their “safety net providers”

These provisions are concessions to the states that did not expand Medicaid, providing federal funding that otherwise would have supported health insurance coverage for uninsured Americans; however, these funds go to health care providers rather than to uninsured Americans; in fact, non-expansion states lose this funding if they choose to actually reduce the number of uninsured residents in their state by now deciding to implement expanded Medicaid.

+ Prohibits small employer tax credits from being used to pay for coverage from any health plan that provides coverage for abortion services

This is another mean-spirited restriction intended to narrow the number of health plans that provide coverage for abortion services.

Effective 2020:

+ Repeals tax credits for cost-sharing expenses (deductibles and co-payments)

The House Republicans are currently litigating whether these cost-sharing subsidies were appropriated for this current fiscal year 2017; by delaying the repeal of these tax credits until 2020, the House Republicans are now essentially conceding that they will have to appropriate funding for these subsidies until then.

+ Repeals tax credits for small employers who offer health insurance to their employees

+ Implements substitute tax credits to help pay for health insurance premiums, based on age; would only be $2,000/year for those up to age 29, and up to $4,000 for those age 60 and older (up to $14,000 for a family); these tax credits are phased down at an income of $75,000 ($150,000 for joint filers), and phased out to zero at an income of $115,000; tax credits may be used to pay for unsubsidized COBRA coverage; limits tax credits to U.S. citizens, nationals, and “qualified aliens” as defined by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996

The replacement tax credits are far less than the tax credits for premiums and cost-sharing now available under the ACA (for example, with a annual income of $20,000, a 27-year old would only get $2,000 in tax credits under the ACHA, compared to $3,225 under the ACA, and a 60-year old would only get $4,000 rather than $9,900 under the ACA). In addition, minimizing the tax credits for younger, healthier Americans disincentivizes them from buying health insurance. The new restrictions based on immigration status means that many individuals who are legally authorized to reside in the U.S. (for example, migrants from the Compact of Free Association jurisdictions in the Pacific Islands) would no longer be able to obtain tax credits to help them buy affordable health insurance.

+ Repeals federal funding for Medicaid expansion (preserves a lower level of federal funding for individuals enrolled in expanded Medicaid as of December 31, 2019)

+ Repeals guaranteed federal funding for Medicaid, freezes total federal funding for Medicaid, and replaces federal funding to states with a per capita cap based on federal funding provided to each state (using five Medicaid population categories of elderly, blind and disabled, children, adults without ACA expansion, and adults under ACA expansion) as of 2016 (plus minor adjustment for inflation)

+ Repeals the requirement to provide “essential health benefits”, or a minimum level of health care services, in Medicaid

+ Repeals presumptive eligibility for Medicaid (requires documentation and verification  of eligibility before coverage begins)

These fundamental changes to how Medicaid is funded are the most significant and damaging parts of the bill; once the per capita caps are implemented and overall Medicaid funding frozen, there will be less federal funding available to the states, which will force the states to restrict eligibility, pay providers less, and offer less benefits. That in turn will result in hundreds of millions of dollars of cost-shifts to the states (who would have to use state funds to backfill some of the federal funding cuts), health care providers (who would be paid less), and Medicaid beneficiaries (who would have to begin to pay premiums, deductibles, and co-payments, all for less health care benefits).

+ Restores Medicaid Disproportionate Share Hospital payments in expansion Medicaid states

+ Suspends 40% excise tax (“Cadillac” tax) on high-cost health plans provided by employers from 2020 through 2024

The American Health Care Act does not repeal or replace the following parts of the Affordable Care Act:

+ health insurance marketplaces offer health insurance; health plans in such marketplaces must cover pre-existing conditions, must guarantee coverage and renewal, must cover adult children up to age 26, caps on out-of-pocket expenses, no annual or lifetime limits on coverage, must provide “essential health benefits”, must meet minimum “medical loss ratio” (limit on administrative expenses/profits)

+ prohibitions against discrimination based on age, sex, race, ethnicity, national origin, or disability

+ states can offer a Basic Health Program (currently offered by New York and Minnesota)

+ states can continue to apply for an ACA section 1332 waiver to implement other innovations as long as they are cost-neutral

+ all quality improvement and payment reform initiatives, including funding and authority of Centers for Medicare and Medicaid Services’ Center for Medicare and Medicaid Innovation and Independent Payment Advisory Board

There also are no changes to the Medicare program although the repeal of several of the Medicare taxes significantly threatens the financial stability of the Medicare program in the future.

Finally, despite campaign pledges and other rhetoric, there are no provisions in the current drafts about more generous “risk corridor” payments to health plans (that end up with more high cost members than anticipated) and the ability of health plans to selling health insurance across state lines (which would result in a “race to the bottom” to avoid state regulations that protect consumers). While the selling across state lines provision could still be added later or introduced as a separate bill, it may have been thought to be outside the scope of the budget reconciliation process being used to enact this American Health Care Act, which is limited to tax revenues, tax credits, and federal government expenditures.

Here is the draft to be marked up by the House Ways and Means Committee:

Link to Original Source

The Ways and Means Committee has prepared a section-by-section summary:

Link to Original Source

And here is the draft to be marked up by the Energy and Commerce Committee:

Link to Original Source

The Energy and Commerce Committee has prepared this section-by-section summary:

Link to Original Source

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Republican Policy Brief: Obamacare Repeal and Replace

Here is the policy brief released today by House and Senate Republicans on how to “repeal and replace Obamacare”, or the Affordable Care Act (ACA). The plan repeats the promises made by President Donald Trump and Republican Congressional leadership to achieve the following: “Lowers costs, expands access, improves quality, and puts patients and families in charge of their care, while protecting patients with pre-existing conditions and ensuring dependents up to age 26 can stay on their parents’ insurance.” It references House Speaker Paul Ryan “A Better Way” proposal rather than just-confirmed Health and Human Services Secretary Tom Price’s Empowering Patients First Act.

The plan concedes that millions of Americans need federal government support to make health care accessible and affordable, both through health insurance markets and the Medicaid program. While repealing the ACA’s premium and cost-sharing subsidies through federal tax credits, the plan creates a new national, refundable, federal tax credit  for all Americans, that increases with age. However, the plan fails to specify how much the credits will be, and whether they will be sufficient to make health insurance affordable. By de-linking such tax credits from income and from the actual cost of health insurance, it is likely that they, in fact, will be insufficient to make health insurance affordable for those who need it the most, i.e. low-income Americans, and those living in geographic areas where the cost-of-living, and the cost of health insurance, is higher.

The plan notes that this new tax credit will be paid for by repealing most of the ACA taxes (on health plans, medical devices, and prescription drugs) as well as the tax penalties on employers and individuals for not offering or purchasing insurance under the ACA.

The plan also expands the availability of tax-deductible health savings accounts (HSAs), which only are useful to individuals and families with higher incomes that have income to deduct. By nearly doubling the amount that could be deducted for such HSAs, the plan provides a massive tax cut to higher income Americans.

The plan also cynically repeals the expansion of Medicaid to all low-income Americans with double-speak language about giving control of Medicaid back to states. Repealing the Medicaid expansion means cutting off federal funding for the expansion of Medicaid in 31 states and the District of Columbia so that those states would have to fund health insurance coverage with state dollars, or cut off coverage for hundreds of thousands of residents in their states. The plan states that there will be a transition period before these federal funds are cut off but does not specify how long that will be.

The plan also allows states to reestablish high risk pools for those with pre-existing and chronic conditions that are the most expensive to insure; such high risk pools failed to provide affordable coverage when states offered them prior to the ACA. The plan does not specify what level of federal funding, if any, will be provided to support these multi-billion dollar high risk pools.

Then the plan goes far beyond “repealing” the ACA and includes a fundamental change to how Medicaid is funded, from a shared responsibility (and governing rules) between federal and state governments to either a “per capita allotment” (or cap) or block grant that will result in dramatic cuts in federal funding to the states, resulting in cost shifts to states, health providers, and Medicaid beneficiaries. Under the per capita cap, different levels of federal funding would be available for aged, blind and disabled, for children, and for adults but the amounts would be fixed based on the past number of beneficiaries rather than actual need. Since Medicaid is program subject to counter-cyclical economic forces, this always means that there will be less federal funding available when it is most needed, i.e. when the economy is in a downturn and there are more who are unemployed and uninsured.

States also will have the option of choosing a block grant funding formula for Medicaid rather than per capita caps, again based on the past level of funding. It is not clear whether that would include the funding for expanded Medicaid since the plan states that the block grant funding formula “would assume that states transition individuals currently enrolled in the Medicaid expansion out of the expansion population into other coverage”; it’s not clear what options states would have to cover the Medicaid expansion population without federal funding.

The one concession that seems to have been made to the 10 states with Republican governors that expanded Medicaid is the restoration of Disproportionate Share Hospital payments; under the ACA, these payments to hospitals for uncompensated care were reduced because Medicaid provided health insurance coverage for those formerly uninsured patients. While this restoration financially helps hospitals in those states, it doesn’t actually provide for health care for those who will be cut off for expanded Medicaid programs.

House Speaker Paul Ryan said today that legislation implementing this plan will be introduced next week, after Congress returns from a President’s Day long weekend.

Link to Original Source 

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Center on Budget and Policy Priorities: Trump Health Rule Would Reduce Tax Credits, Raise Costs, For Millions of Moderate-Income Families

This policy brief from the Center on Budget and Policy Priorities analyzes the proposed rule misleadingly named as “market stabilization” released yesterday. The proposed rule would raise premiums, out-of-pocket costs, or both, for millions of moderate-income families. If finalized as proposed, the rule would reduce the amount of health care that marketplace plans have to cover. That would allow insurers to offer plans with higher deductibles and other out-of-pocket costs than they can now sell through the marketplaces. It would also have the hidden impact of reducing the Affordable Care Act’s (ACA) premium tax credits, which help moderate-income marketplace consumers afford health care. As a result, the rule would leave millions of families with higher premiums and worse coverage. Comments on the proposed rule are due on March 7, 2017.

Link to Original Source

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Centers for Medicare and Medicaid Services: Proposed Rule for ACA “Market Stabilization”

In stunning governmental doublespeak, the Centers for Medicare and Medicaid Services (CMS) has issued this proposed rule misleadingly named “marketplace stabilization” that will severely narrow access the health insurance marketplaces created by the Affordable Care Act (ACA), and reduce costs (and increase the profit margins) for health insurance plans. To add insult to injury, this proposed rule, yet to be published in the Federal Register, only allows less than three weeks for public comments, rather than the usual minimum comment period of 30 days. Comments are due March 7, 2017.

According to CMS, here are the key elements of the proposed rule:

  • Special Enrollment Period Pre-Enrollment Verification: The rule proposes to expand pre-enrollment verification of eligibility to individuals who newly enroll through special enrollment periods in Marketplaces using the platform. This proposed change would help make sure that special enrollment periods are available to all who are eligible for them, but will require individuals to submit supporting documentation, a common practice in the employer health insurance market. This will help place downward pressure on premiums, curb abuses, and encourage year-round enrollment.
  • Guaranteed Availability: The rule proposes to address potential abuses by allowing an issuer to collect premiums for prior unpaid coverage, before enrolling a patient in the next year’s plan with the same issuer. This will incentivize patients to avoid coverage lapses.
  • Determining the Level of Coverage: The rule proposes to make adjustments to the de minimis range used for determining the level of coverage by providing greater flexibility to issuers to provide patients with more coverage options.
  • Network Adequacy: The proposed rule takes an important step in reaffirming the traditional role of states to serve their populations. In the review of qualified health plans, CMS proposes to defer to the states’ reviews in states with the authority and means to assess issuer network adequacy. States are best positioned to ensure their residents have access to high quality care networks.
  • Qualified Health Plan (QHP) Certification Calendar: In the rule, CMS announces its intention to release a revised proposed timeline for the QHP certification and rate review process for plan year 2018. The revised timeline would provide issuers with additional time to implement proposed changes that are finalized prior to the 2018 coverage year. These changes will give issuers flexibility to incorporate benefit changes and maximize the number of coverage options available to patients.
  • Open Enrollment Period: The rule also proposes to shorten the upcoming annual open enrollment period for the individual market. For the 2018 coverage year, we propose an open enrollment period of November 1, 2017, to December 15, 2017. This proposed change will align the Marketplaces with the Employer-Sponsored Insurance Market and Medicare, and help lower prices for Americans by reducing adverse selection.

In fact, the new documentation requirements for Special Enrollment Periods are intended to keep Americans out of the health insurance marketplaces by placing new administrative barriers in the way of their enrollment; yet the CMS press release uses the phrase “expand” to make it sound like this is an expansion of coverage. CMS estimates that these new documentation requirements will be required for up to 650,000 enrollees.

CMS uses the heading “Guaranteed Availability” to describe new barriers to continued coverage for individuals who have missed premium payments; this doesn’t “guarantee” availability of coverage, it cuts coverage off. This provision is consistent with the Indiana Medicaid expansion waiver drafted by CMS-nominee Seema Verma and then Governor Mike Pence that allows Indiana to cut Medicaid beneficiaries off from eligibility for missed premium payments.

Similarly, while the heading is “Open Enrollment Period”, the proposed rule change is to cut in half the time period for individuals to enroll for health insurance next coverage year (2018). By giving less time for enrollments, enrollments will decline.

And rather than providing affordable, accessible coverage, the proposed rule instead gives “greater flexibility” to health plans to offer narrower, less health insurance coverage under the ACA’s complex metal tier system  (using the Latin “de minimus” to cover up that this means less, not more coverage).

The proposed rule also narrows the ACA rules for ensuring that there are sufficient providers in health plan networks to actually provide care to those enrolled. By loosening the “network adequacy” rules to only require that 20% rather than 30% of providers be  “essential community providers” and to expand the list of who is considered an essential community provider, the proposed rule makes those networks potentially inadequate, meaning that those with marketplace coverage may not actually have access to sufficient numbers of providers.

And finally, the proposed rule declares CMS’ intention to delay the deadline for submissions by health plans who want to offer coverage through the health insurance marketplaces in 2018, without specifying any new timelines. The first deadline for coverage year 2017 was April 4, 2016. As it still is uncertain whether the Republican-majority Congress and President Trump can reach agreement on how to de-fund or repeal the ACA, the process for continuing the health insurance marketplaces needs to move forward. By announcing that the deadlines will change but not when, less than two months from the first deadline, only adds to the uncertainty and instability.

In its cost analysis, CMS concedes: “changes such as shortened open enrollment period, pre-enrollment verification for special enrollment periods, reduced actuarial value of plans, less expansive provider networks [would] result in lower enrollment, especially for younger, healthier adults” and “would tend to increase premiums”, which also will result in lower enrollments. These changes will only reduce enrollment and de-stabilize the health insurance markets, not stabilize them.

Curiously, the proposed rule does not reference President Donald Trump’s Executive Order 13765 on the ACA but does reference Executive Order 13771 requiring the repeal of two regulations for every new regulation. The proposed rule is exempt from the latter because it reduces, not increases, costs to the federal government. The only way the proposed rule decreases costs is by decreasing enrollment, again highlighting how the rule will de-stabilize the health insurance markets rather than stabilizing them.

Link to Original Source

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Breaking News: Richard Bresser Named as President/CEO of Robert Wood Johnson Foundation

The Robert Wood Johnson Foundation has named Richard Bresser, MD, as its next President/CEO. Dr. Bresser currently is the chief health and medical editor for ABC News and a former acting director for the Centers for Disease Control and Prevention (CDC). Among the top stories he covered as a pediatrician and infectious disease specialist was the Ebola epidemic, beginning with reporting from Uganda in 2012. At the CDC, he was the director of the Coordinating Office for Terrorism Preparedness and Emergency Response.

Dr. Besser received his Bachelor of Arts degree in economics from Williams College and medical degree from the University of Pennsylvania. He completed a residency and chief residency in pediatrics at John Hopkins University Hospital in Baltimore. Dr. Besser began his career at the CDC in 1991 in the Epidemic Intelligence Service working on the epidemiology of food-borne diseases. He served for five years on the faculty of the University of California, San Diego as the pediatric residency director, while working for the county health department on the control of pediatric tuberculosis. He returned to CDC in 1998 as an infectious disease epidemiologist working on pneumonia, antibiotic resistance and the control of antibiotic overuse.

He volunteers as a pediatrician with the Children’s Aid Society in New York City, and he is currently a Professor of Pediatrics at Columbia University and a Distinguished Visiting Fellow at the Harvard School of Public Health.

Dr. Besser will succeed Risa Lavizzo-Mourey, MD, who has led the foundation for the last 14 years. He will assume leadership of the $10 billion foundation this April.

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University of California Berkeley Labor Center: California’s Projected Economic Losses Under ACA Repeal

This research brief from the University of California Berkeley Center for Labor Research and Education estimates the economic losses in California from a repeal or re-funding of the key sections of the Affordable Care Act (ACA). An estimated 3.7 million Californians enrolled in expanded Medicaid (MediCal) would lose that coverage, and another 1.2 million individuals enrolled through California’s state health insurance marketplace, Covered California, would lose federal subsidies to make private health insurance more affordable. These two sections of the ACA have been the largest drivers of the historic reduction in California’s uninsured rate from 17.2% in 2013 to 8.6% in 2015.

California would lose approximately $20.5 billion in annual federal funding for the Medi-Cal expansion and Covered California subsidies. The economic losses associated with these lost federal dollars would be partially offset by limited economic gains from other provisions that may be included as part of the repeal of the ACA, which could yield $6.3 billion in tax cuts to California insurers and high-income households and nearly $1.3 billion in eliminated penalties for uninsured individuals and employers not offering affordable coverage.

The reduction in federal health insurance funding would lead to the loss of approximately 250,000 jobs in California, which would be slightly offset by the addition of 20,000 jobs due to the tax cuts for high-income households, 11,000 jobs due to the elimination of the fee on insurers, 8,000 due to the elimination of the penalty for large employers not offering affordable coverage, and 2,000 jobs due to the elimination of the penalty for the uninsured. The net effect of partial ACA repeal would be the loss of 209,000 jobs in California.

The majority (135,000) of these lost jobs would be in the healthcare industry, including at hospitals, doctor offices, labs, outpatient and ambulatory care centers, nursing homes, dentist offices, other healthcare settings, and insurers. But jobs would also be lost in other industries. Suppliers of the healthcare industry, such as food service, janitorial, and accounting firms, would experience reduced demand, leading to job loss.  Some California counties would be especially adversely affected by partial ACA repeal because they have a higher-than-average share of their population enrolled in the MediCal expansion. For example, there would be 63,000 jobs lost in Los Angeles County; 12,000 jobs lost in San Bernardino County; 6,000 jobs lost in Fresno County; and 5,000 jobs lost in Kern County.

The state also would lose an estimated $1.5 billion in state and local tax revenue from the partial repeal of the ACA. Federal funding for MediCal and Covered California subsidies supports jobs in the healthcare industry and at healthcare suppliers, and the income that these workers spend locally supports jobs in a variety of industries. The Californians who hold these healthcare, restaurant, insurance broker, and other jobs pay state income and sales taxes. The federal spending also increases the state’s corporate profit tax revenues, along with some other smaller taxes and fees.

Finally, there is an overall economic multiplier effect from these massive changes in health insurance coverage, tax revenues, and job losses.  The combination of the direct effect on the healthcare industry, the indirect effect on suppliers, the induced effect of reduced spending by affected healthcare workers in their communities, and the induced effect of increased spending by individuals affected by the tax cuts and elimination of penalties would result in a total loss of more than $20.3 billion in GDP throughout the state.

This analysis was conducted using national level Congressional Budget Office estimates, applied to California, using economic data from IMPLAN Online 2015. Some of the provisions that would be included under ACA repeal would be eliminated immediately, while the effective date for other provisions would be delayed. For simplicity, the effects are modeled as if they all take place in 2017, and results are presented in 2017 dollars.

Funding for the research brief was provided by The California Endowment.

Link to Original Source

The Labor Center also has prepared fact sheets describing these economic impacts for the 14 California counties most impacted.

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