Source: https://www.acareview.com/page/2/
Timestamp: 2019-04-21 00:52:18+00:00

Document:
Shortly after noon EDT on July 25, Senator McConnell announced a vote on a motion to proceed to debate the National Defense Authorization Act (H.R. 2810), which actually proved to be a vote on a motion to proceed to debate the House-passed American Health Care Act, H.R. 1628. With the Vice President providing the tie-breaking vote, that motion passed and debate commenced.
Shortly thereafter, Senator Cruz (R-Texas) offered what’s been called a “skinny plan” amendment that would allow sellers of ACA-compliant plans to sell cheaper alternatives lacking some of the coverages mandated by the ACA. However, since that amendment, standing alone, would not be filibuster-proof, Senator Cruz needed a waiver of the related budget reconciliation rules. The motion to waive those rules needed 67 votes, but got just 43. The roll call showed nine Republicans voting with all Democrats to deny the waiver.
Senator Donnelly (D-Indiana) then moved to send H.R. 1628 back to the Senate Finance Committee (not the Budget Committee) with Medicaid-protective instructions. The Senate recessed until 9:30 am EDT July 26, then to resume debate, with a vote on the Donnelly motion set for 11:30 am July 26.
This would be the most edgy health care vote taken since March 2010. Should Senator Donnelly succeed, Democrats would keep the bill alive, at the risk that committee Republicans might get their act together and come up with something that could attract 60 votes later. Don’t laugh. It could happen. Old dogs can and do learn new tricks. By defeating the motion, Republicans would tee-up a reconciliation rules vote on something yet unseen that might fall short of even 50 votes, thus wasting a one-shot, filibuster-proof process that could have been used to pass tax reform or infrastructure spending, or both. Indeed, that specter might have motivated some of the nine votes against the Cruz amendment rules waiver.
We watched every minute of hours of persistent, partisan hyperbole that commenced as scheduled on Wednesday morning. For clarity, consistency and calm reason, the remarks of Senator Rand Paul (R-Kentucky) stood out, except that he was lauding the bill as he would amend it, stripping all the “replace” and leaving only the “repeal.” At 12:13 pm, Senator Mike Enzi (R-Wyoming) successfully sought to waive a quorum call and to delay the scheduled 11:30 vote until 3:30 EDT, then debate resumed. The future of healthcare was earnestly guaranteed to be Utopian or Hellish, depending on how fellow Senators voted. Would that Mark Twain, H.L. Mencken, and P.J. O’Rourke had live-tweeted it.
At 12:50 pm, Senator Thune (R-South Dakota) hopefully forecast that keeping the bill on the floor for amendment would lead to final passage … days later. In a lucid interval from 1:07 until 1:20 pm, Senator Donnelly tried to redirect the debate to the motion actually before the chamber but he, too, succumbed to the tragedian temptation and the next speaker (Senator Chris Van Hollen, D-Maryland) reviled the “nasty DNA” of all Republican “wealth care” proposals, urging Senators to “kill the bill, don’t kill us.” Nothing is more common than regression to the mean.
Senator Johnson (R-Wisconsin) rose to offer amendments, one of which would require members of Congress to obtain ACA-compliant health insurance through ACA exchanges. Each amendment related to the text of H.R. 1628, not to the motion being debated. Senator Enzi took the floor again at 3:05. He reviewed how the same partisan reconciliation process was used to pass the ACA in 2010, how many material changes were made by the prior Administration’s “executive actions,” and how premiums soon will “surge” if Congress fails to make other needed changes now. Again, nothing about Senator Donnelly’s pending motion. After a quarter hour of muted-mic floor silence, Senator Strange (R-Alabama) made a short plea for consensus opposition to tax-funded abortions.
Fortunately, all things must come to an end, as this seemed to do, starting with a quorum call at 3:32, followed by a roll call vote … on Senator Paul’s amendment, which was defeated, 55 – 45. Starting at 4:14 pm, the Clerk finally called the roll for the vote on Senator Donnelly’s motion to recommit H.R. 1628 to the Finance Committee. On that one, Republicans stuck together and prevailed, 52 – 48. Game on.
You thought we were done for the day? Rookie. Seconds after the Donnelly motion’s defeat, Senator Casey (D-Pennsylvania) moved to send H.R. 1628 back to the Finance Committee with instructions to protect in the bill all those protected by the Americans with Disabilities Act, using in his speech an enlarged photo of a disabled constituent and accusing “obscene,” “repeal and decimate” Republicans of seeking to institutionalize people with disabilities. Because, apparently, when “they” take the low road, “we” tunnel.
Senator Cassidy (R-Louisiana), like Rand Paul a physician, ignored that bait and added a new Republican talking point: 37% of all ACA Medicaid expansion funds have been spent in just three states – California, Massachusetts and New York. He then announced a forthcoming “Graham – Cassidy Amendment” to spread that wealth around. In the best WWF tradition, Senator Cassidy then tagged Senator Graham (R-South Carolina), who used foam-core charts and an easel to explain that “we’re leaving the taxes on wealthier Americans in place,” in order to have the funds to convert Medicaid to state block grants boosting underfunded states without excessive cuts to overfunded states. West Virginia, he said, would get a 43% Medicaid raise. Montana Medicaid funding would double. There was no ad hominem argument, no name calling – just observations and proposed solutions. Apparently filling time, Senator Inhofe (R-Oklahoma) took the floor for a few minutes to praise President Trump and “my hero Jeff Sessions.” Senator Enzi then announced that the next votes would be on the Heller Amendment (not yet described) and the Casey motion.
Senator Carper (D-Delaware) spoke at length on the recent history of federally-funded health care, noting that the Heritage Foundation originally conceived several solutions adopted by the ACA, including health insurance exchanges, as an alternative to the single-payer system proposed by Hillary Clinton in 1992-93. “Romneycare” was prominently mentioned. If Republicans winced, they weren’t on camera.
After two more Democrats denounced “Trumpcare” and the vote-a-rama process, Senator Heller (R-Nevada) was recognized to tout the Heller Amendment. However, he discussed only the desirability of Medicaid expansion protection, offering no details of his proposal.
Senator Casey rose again to try again to explain why ACA Medicaid expansion is needed to protect the rights created by the ADA, calling the Heller Amendment mere “sentimentality,” without any binding effect.
At 6:10 pm EDT, the Clerk began to call the roll on Senator Casey’s motion to recommit H.R. 1628 to the Finance Committee. Republicans prevailed, 51-48, whereupon Senator Heller summarized his amendment, expressing the sense of the Senate that the bill is not intended to reduce Medicaid eligibility, benefits or coverage. Senator Sanders (D-Vermont) interposed a procedural objection and Senator Heller sought a waiver, just as Senator Cruz had done, but won only 10 votes.
At 7:10 pm, Senator McConnell called-up an amendment proposed by Senator Daines (R-Montana). Senator Schumer (D-New York) then announced that Democrats would offer no further amendment unless and until Republicans put on the floor a final bill offered for passage.
Following Senator Franken, we were treated to a speech by Senator Whitehouse (D-Rhode Island) on the merits of a carbon tax.
Finally, just before 8:00 pm, Senator Enzi announced that debate on H.R. 1628 would resume at 10:00 am EDT July 27, with a vote on the Daines amendment set for 2:15 pm. Who knew health care could be so complicated?
Authorize $1.5B of new anti-addiction spending in FY2018-19.
This is the simplest, skinniest health care “repeal” bill you are likely to read, so you should.
The pundits and political partisans apparently stopped reading before the heading on page 9 of the CBO’s June 26 report on the Better Care Reconciliation Act (BCRA) Discussion Draft, “Uncertainty Surrounding the Estimates,” which the CBO conceded to be “inherently inexact,” given the complexity of possible reactions to BCRA passage. Going further, the CBO disclosed that its estimates are based on a March 2016 baseline that materially overstated ACA Exchange enrollment and underestimated average subsidy payments per enrollee. In short, the CBO is confident of the direction that BCRA would push health care markets, but not of the magnitude of any move in any market. So if you read or hear that BCRA “will” do this or that, rest your eyes or ears. Here’s what we found interesting in the CBO report.
Turn all the way back to Table 4, three pages from the end. By the end of 2018, compared to the ACA projection (using the 2016 baseline analysis) about seven million fewer will have individual policies if BCRA passes. The report cites two main reasons: many who don’t want to buy insurance won’t buy it once the individual mandate vanishes and some who do want it won’t be able to afford it because subsidies will be less generous for those just above the Medicaid eligibility line and we mature Americans will pay more of our true cost. Medicaid rolls will be slimmer by about four million people, mainly due to the lack of new states expected (in 2016) to adopt Medical expansion and the reduced federal funding of expansion. Employers will drop coverage for about four million, because there will be no employer mandate. The aggregate spread, fifteen million, is projected to rise to twenty-two million people by 2026, with Medicaid restraint accounting for fifteen million and individual policy purchases accounting for seven million of the spread. Between 2018 and 2026, the total under-65 population will rise from 274 million to 280 million (2.5%), with the uninsured population rising from 26 million (9.5%) to 49 million (17.5%). The newly uninsured would be concentrated among those not yet eligible for Medicare and not poor enough for Medicaid. However, the analysis ignores insurance that would not qualify for sale on an ACA Exchange today. Some number of the “uninsured” would purchase hospital indemnity plans, catastrophic coverage, skinny med plans, etc.
The report acknowledges that BCRA imposes a six month waiting period for individual market applicants who have allowed coverage to lapse, but it’s not clear how, if at all, CBO considered that to offset the consequences of individual mandate elimination.
According to the CBO, BCRA would free-up about $321 billion of budgetary capacity. The report does not consider the extent to which job gains incident to related tax reform could boost employer-provided coverage.
What insureds pay would rise in the short term, CBO predicts, largely because the demise of the individual mandate would allow relatively healthy people to leave the market without tax penalty. Other factors could include states using § 1332 waivers to drop expensive treatments from Essential Health Benefits. But by 2020, that trend would reverse, and insureds would pay less than under the ACA, left unchanged.
There’s much more worth reading; it’s quite educational, but maybe not prophetic.
When all parties in a debate cite the same figures, don’t bother arguing with the numbers. So let’s assume that about forty cents of each health care dollar goes to care for people with multiple, chronic conditions and that about 5% of the insured population accounts for about 50% of health care costs. If the insured population’s median age is rising then, other things being equal, those numbers will not improve in the near term.
In a fully free market, many mature Americans (like your humble correspondent) would be uninsurable. That being politically unpalatable, the federal government since HIPAA has made it increasingly difficult to exclude us from insurance pools. The ACA virtually outlawed it. But, like a boat approaching its hull speed, a scheme of health care financing that transfers dollars from the healthy to the unhealthy will need an increasing number of dollars for each added increment of coverage of the increasingly unhealthy. The ACA approach is minimum standard coverage for all at any cost. Any sincere attempt to stabilize insurance markets and lower premiums and deductibles for the 95% would have to exclude some of the 5% from those markets.
So what does the Senate bill do? Not much. The term “pre-existing” does not appear in the bill. No health status discrimination prohibition is repealed and a new one is added, to prevent Small Business Health Plans from paying eligible bad risks to enroll in individual coverage. Simply put, the Senate decided to punt. So did the House, but the House punted to the states, which were given a bigger role in striking this balance. Those express, direct provisions are missing from the Senate bill, so the question is what it allows implicitly and indirectly.
Section 106 appropriates $50B for 2018 through 2021 for CMS to use to, among other things, assist participating health insurers and states to “provide financial assistance to high-risk individuals … who do not have access to health insurance coverage offered through an employer, enroll in health insurance coverage under a plan offered in the individual market ….” There is an overlapping appropriation of $62B from 2019 through 2026 for “long term state stability and innovation allotments,” with no state match required until 2022.
(A) Part A of this subchapter.
(B) Part B of this subchapter.
(C) Section 18071 of this title.
(D) Sections 36B, 4980H, and 5000A of title 26.
Section 18071 describes the current ACA cost-sharing reduction program for individuals enrolled in ACA Exchange coverage. Code § 36B describes the premium tax credit program for those enrollees. Code § 4980H imposes the large employer mandate to offer affordable, minimum value, minimum essential coverage to at least 95% of full-time employees and their dependents. Code § 5000A imposes the individual mandate to enroll in minimum essential coverage. The Senate bill zeroes the individual and employer mandates and term limits the coverage subsidies. There would seem to be no incentive to seek a waiver from those.
ACA § 1332 is found in Chapter 157, Subchapter III of Title 42. Part A consists of sections 18021 through 18024. Part B holds sections 18031 through 18033. Here are the section headings.
Section 18021 describes the sort of plans that may be sold on ACA Exchanges. Section 18023 relates to funding of coverage for abortions. Section 18024 defines large and small employers and group markets. Sections 18031 – 33 relate to state exchanges. The meat of this matter, apparently, is that CMS may permit states to define § 18022 “essential health benefits” so as to reduce the cost of insurance for those who prefer to buy relatively limited coverage.
Codgers like your correspondent are unlikely to buy that cheaper coverage but our young, healthy children and grandchildren may line up to buy it. That could reduce the wealth transfer effect of the ACA’s protection of those with pre-existing conditions, but only marginally and indirectly.
That seems to be about it. The Senate bill does not repeal ACA, ADA or HIPAA protections for those with pre-existing conditions. It adds spending to help insurers bear the cost of our bad risks and allows states to expand cheaper insurance options for those who don’t want to swim in the same risk pools with us.
The “Discussion Draft” released June 22, 2017 by the Senate Budget Committee carries the House Bill number (H.R. 1628) of the American Health Care Act, and kills taxes like the House bill, but there are major differences, too. At 142 pages, the Discussion Draft is less than one-sixth the heft of the ACA but it’s a brutal read. Here are a few of the highlights that can be explained simply in this format, as we prepare for a likely vote-a-rama sometime before July 4.
It’s been re-named the “Better Care Reconciliation Act of 2017.” There’s a message in that moniker. No Senate Republican will consider this the best they can do. The hope is that 50 will consider it better than the status quo and therefore good enough for government work.
The premium tax credit subsidies for individual policies purchased through an ACA Exchange survive, though trimmed a bit. The household income eligibility limit drops from 400% to 350% of the federal poverty level. If excess subsidies are paid, the feds will be allowed to recover the full amount of the excess payments and can add a 25% (up from 20%) penalty for materially incorrect credit applications. Also, the credits will be based on the premium for a “median cost benchmark plan” rather than the second lowest cost silver plan, and the new benchmark plan can have an actuarial value as low as 58%. Similarly, it may become harder to qualify for the premium subsidy based on the high premium or low value of an employer coverage offer based on how Code § 36B affordability and value are redefined.
BCRA expressly funds ACA § 1402 cost-sharing reductions through 2019 but repeals the program at the end of that year.
Community rating survives but states may elect an age ratio as high as 5 to 1 beginning in 2020. Also starting in 2020, states may take control of medical loss ratio and rebate rules.
The small employer tax credits under Code § 45R disappear after 2019.
The individual and employer mandate taxes stay on the books but the rates and amounts are set at ZERO after 2015. This permits the IRS to assess and collect 2015 taxes.
The Medicare tax of Code § 3101 is cut back beginning in 2023.
HSA contribution limits will match out-of-pocket plan maximums and both spouses will be allowed to make HSA catch-up contributions.
Beginning one year after enactment, BCRA also creates a new legal entity – the fully-insured, single sponsor, multi-employer/member “Small Business Health Plan,” regulation of which is primarily federal, with broad ERISA pre-emption of state regulation. A federally-registered SBHP may issue coverage across state lines with just limited exposure to regulation by its “home” state. However, the approved plan must forbid participating employers to fund individual market coverage for otherwise eligible employees based on the health status of those employees.
You have just read a very high-level summary of about 40% of the text of this Discussion Draft. The remaining 60% proposes significant changes to Medicaid, DSH payments and state health care program funding and administration. Those are so complex that we’ll await an actual bill to review.
Lots of wrecks happen because drivers, staring at what’s directly in front of them, are unaware of dangers coming from other directions. This is an ACA blog, so right now we’re staring at the ACA changes being proposed by the Senate majority, but we want you to remain aware that collateral developments could spell trouble for your group health plan. Here are two.
On June 16, 2017, the three ACA enforcement agencies (DOL, HHS, IRS) issed new FAQ guidance about non-quantitative treatment limintations (NQTL) and assoiciated disclosure obligations, including a draft form to be used to request such disclosures from employer-sponsored group health plans.
Four federal statutes work together to forbid such plans to impose financial requirements and treatment limitations for mental health and substance use disorder (MH/SUD) benefits exceeding the predominant financial requirements and treatment limitations that apply to substantially all medical and surgical benefits, and to force such plans to make related disclosures so that plan participants, and their authorized representatives, can assess compliance. NQTL examples include “medical necessity criteria, fail-first policies, formulary design, or the plan’s method for determining usual, customary, or reasonable charges.” Often, out-of-network providers make related disclosure requests as their patients’ authorized representatives.
This new guidance also clarifies that “if a group health plan or a health insurance issuer provides coverage for eating disorder benefits,” those are “mental health benefits” fully subject to parity and disclosure standards.
Plaintiff alleges Dr. Pepper changed the 2016 Summary Plan Description in response to and in retaliation for her inquiries regarding whether the Plan covered ABA Treatment. Dr. Pepper responds that the 2016 Summary Plan Description “clarification” did not single out Plaintiff or her son because it applied to all participants. However, Plaintiff alleges that Dr. Pepper modified the 2016 Summary Plan Description to single out and exclude coverage for a particular disability after becoming aware that Plaintiff’s son suffered from that disability. Plaintiff has sufficiently established that the modification and denial of fringe health insurance benefits were an adverse employment action. Plaintiff has made a prima facie showing of discrimination.
The employer contended that ABA Treatment had never been covered and that the 2016 amendment just clarified that lack of coverage. Viewed in the light most favorable to the claimant, said the Court, the evidence supported her claim that the plan was changed to drop coverage after and because she sought coverage, in violation of the ADA.
So, we’ll stare along with you at the ACA changes made in the Senate bill to be released today, but keep your head on a swivel because there are dangers in every direction.
Maxwell Smart, aka “Agent 86” in the 1960’s TV series Get Smart, claimed to have survived “fiendish” water torture – 300 gallons at the rate of one drop a minute. When disbelieved, he asked, “Would you believe a quart?” The IRS has a similar credibility problem. It has warned ambiguously of impending employer mandate tax assessments for so long that many employers have ceased to take the Service seriously.
You have read here prior, sketchy, IRS guidance about when and how it will notify ALE Members of potential employer mandate tax assessments. That guidance was updated April 20, thusly.
How will an employer that filed Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns and Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, know that it owes an employer shared responsibility payment?
The contact for a given calendar year will not occur until after both the due date, including extensions, for employees to file income tax returns for that year and the due date, including extensions plus a reasonable time for corrections based on errors identified by the IRS during processing, for ALEs to file Forms 1094-C and 1095-C.
If an employer is part of an aggregated ALE group, the process and rules described above and elsewhere in Making an Employer Shared Responsibility Payment apply separately for each ALE member in the aggregated ALE group.
Our educated guess is that ALE Members are unlikely to receive the referenced IRS letters for 2015 taxes before September 1, 2017. Here’s why.
“In 2017” literally means at any time, up to and including the last day of the year. Since the IRS must assess such taxes within three years of their accrual, it could hardly wait any longer to assess employer mandate taxes that accrued in January 2015. So, this tells us that IRS may delay as long as possible.
The Internal Revenue Bulletin is published online, normally each Monday. Through May 22, 2017, there has been no employer mandate tax assessment guidance. Though the Bulletin expressly states that its guidance applies retroactively, FAQ 57 says that ALE Members will be given a significant lead time to prepare for receipt of these pre-assessment “contact” letters. First, the Bulletin will announce the procedures, then the IRS will issue supplemental guidance through other channels – perhaps including more FAQ guidance updates. “Contact” letters mailed as late as possible, in December 2017, would seem to break this promise. So, we expect to see something in the Bulletin by July or August, then supplemental guidance in August or September, then the promised contact letters going in the mail in September or October 2017.

References: § 1332
 § 36
 § 4980
 § 5000
 § 1332
 § 18022
 § 36
 § 1402
 § 45
 § 3101