Health Care Reform

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Recently, the attorneys general of eleven states and the District of Columbia filed suit to challenge the Department of Labor’s (DOL) new association health plan (AHP) regulations (the “AG Litigation”). Although it is unclear at this time whether the AG Litigation will be successful in invalidating the regulations, it creates a potential impediment for a key aspect of the Trump administration’s effort to change the health insurance marketplace.

The AHP Regulations

An AHP is a group health plan that is sponsored by an association of employers and is treated as a single employee benefit plan for regulatory purposes. According to the DOL, AHPs offer small employers (and now self-employed individuals) the following key advantages over sponsoring a group health plan at the individual employer level (or procuring individual coverage):

  • Because AHPs can negotiate with insurers or healthcare providers on behalf of the entire group (instead of each employer negotiating individually), the AHP will theoretically obtain lower premium rates; and
  • Because AHPs typically have enough participants to qualify as a “large group” plan, an AHP is not subject to the more stringent Affordable Care Act (ACA) requirements imposed on plans in the “small group” and individual markets.

Although the concept of AHPs predates the DOL’s new regulations, associations had difficulty forming AHPs under prior law. Before the new regulations, an association could form an AHP only if it satisfied stringent “commonality of interest” standards. Those standards require that the association be formed for a purpose unrelated to the provision of benefits, and that it have a common economic or representational interest in a narrow sense. As a practical matter, few employers could satisfy these requirements, and AHPs have not been commonplace.

Continue Reading New Association Health Plan Rules and What the Recent Attorneys General Lawsuit Means for These New Rules

Last week, the Departments of Treasury, Labor, and Health and Human Services (the “Departments”) issued final regulations to redefine the meaning of “short-term, limited duration insurance” (“short-term insurance”). The controversial regulations are likely to expand the use of this limited form of health insurance among consumers who do not receive coverage through their employers.

Background

The Affordable Care Act (“ACA”) imposes strict requirements on most individual health insurance coverage. Short-term insurance is exempt from most of those requirements. Significantly, short-term insurance (unlike other forms of individual insurance) is: (1) allowed to exclude or limit coverage for preexisting conditions; (2) not required to provide coverage for essential health benefits (such as coverage for emergency care, inpatient care, prescription drugs, and mental health services); and (3) permitted to impose annual and lifetime maximums to limit the amount that the insurance company pays.

Continue Reading Final Regulations on Short-Term, Limited Duration Insurance: What the Regulations Mean for the Individual Insurance Marketplace

The new Tax Bill (H.R. 1), which President Trump is expected to sign soon, will have an impact on healthcare in the U.S.

First, the Tax Bill will permit a taxpayer to deduct medical expenses that exceed 7.5% of the taxpayer’s adjusted gross income (which has been reduced from the previously 10% threshold). This will allow more Americans to deduct their medical expenses.

Second, and more notably, the Tax Bill repeals the “individual mandate” under the Affordable Care Act (“ACA”), effective January 2019. While the repeal of individual mandate is estimated to reduce the Federal deficit—its impact on the health insurance market is difficult to estimate. Back in November of 2017, the Congressional Budget Office (“CBO”) reported that the repeal of the individual mandate would increase the number of uninsured Americans by 4 million in 2019 and 13 million by 2027. Additionally, the CBO projected that the repeal would likely increase average premiums by 10% in the individual insurance market. The CBO cited the fact that, without a tax penalty, fewer healthy Americans would purchase health insurance as the primary reason for these projections. The CBO also noted that the likely increase in premiums would further result in fewer insureds, especially in the individual insurance market, because the premiums would become less affordable. The Tax Bill leaves the ACA’s “employer mandate” and the corresponding employer reporting requirements untouched.

Interestingly, the Tax Bill did not repeal the Cadillac tax on health coverage or the medical device tax.

Venable’s Healthcare attorneys are happy to address any specific questions you may have on the Tax Bill’s effects on healthcare.

Last week, Senators Lindsey Graham of South Carolina and Bill Cassidy of Louisiana (with their co-sponsors, Senators Dean Heller (R-NV) and Ron Johnson (R-WI)) released the “Graham-Cassidy-Heller-Johnson Amendment” (“Graham-Cassidy bill”), which, if passed, would have repealed major sections of the Patient Protection and Affordable Care Act (ACA).

Specifically, the bill would have repealed the ACA’s individual and employer mandates, ended the Medicaid expansion in 2020, replaced the ACA’s subsidy program with state block grants (which would have allowed states to decide how their healthcare system would operate), weakened restrictions against pre-existing condition protections, and defunded Planned Parenthood.

Continue Reading The Senate Will Not Vote on the Latest ACA Repeal Effort (the Graham-Cassidy Bill)

Senate Republicans have released several bills in recent weeks in support of their goal of repealing and replacing the Affordable Care Act (ACA). This morning, that effort appears to have failed.

On Tuesday, the Senate narrowly approved a motion to proceed, allowing the chamber to begin consideration of measures to achieve that goal. Republican Senators Susan Collins of Maine and Lisa Murkowski of Alaska voted with the Democrats against the motion, but Vice President Mike Pence broke the resulting 50-50 tie. That vote allowed debate to move forward on a range of healthcare legislative options.

The next step for proponents of the repeal effort was to agree on what, if anything, would replace the ACA. Three options were considered, and all were voted down:

Continue Reading The Republican Health Bill Failed Key Tests – So What’s Next?

Senate Republicans have released several bills in recent weeks in support of their goal of repealing and replacing the Affordable Care Act (“ACA”). This afternoon, the Senate narrowly approved a procedural step that allows the chamber to begin consideration of measures to achieve that goal. Republican Senators Susan Collins of Maine and Lisa Murkowski of Alaska voted with the Democrats against the motion to proceed and Vice President Mike Pence broke the resulting 50-50 tie.

Today’s vote allows debate to move forward on a range of healthcare legislative options. The next step for proponents of the repeal effort is to agree on what, if anything, will replace the ACA. It remains to be seen if any of the legislative proposals (including straight repeal with no immediate proposal to replace) put forward so far will be able to draw enough votes to pass the closely divided Senate. One possibility may be a “skinny repeal” bill limited to repealing the individual mandate, employer mandate, and medical device tax. If passed, this bill could be approved by the House as-is, but would more likely move to conference with the House.

On Thursday, June 22, 2017, Senate Republican leaders released their legislative proposal to amend the Affordable Care Act (ACA). A revised version of the bill was released on June 26. The Senate’s take on healthcare legislation, titled the Better Care Reconciliation Act of 2017 (BCRA), comes after the House passed the American Health Care Act (AHCA) by a narrow margin in early May. The Senate bill is structurally similar to the House version, but it departs from the AHCA in important ways. The Senate bill makes deeper cuts to Medicaid and establishes a different set of subsidies to help individuals purchase insurance. The BCRA is labeled a “discussion draft,” but Senate leaders have set an ambitious goal of holding a vote on the measure before the July 4th holiday.

Key provisions of the BCRA are outlined below.

Continue Reading Senate Republicans Release Healthcare Bill

Repealing and replacing the Affordable Care Act (ACA) has long been a priority of congressional Republicans, yet recent events in Washington suggest that accomplishing this goal will be harder than originally anticipated. In early May, the House of Representatives narrowly passed the American Health Care Act of 2017 (AHCA). The AHCA rolled back a host of ACA provisions, including the individual and employer mandates and numerous taxes funding the expansion of healthcare coverage. The Congressional Budget Office (CBO) projected that enactment of the bill would result in cutting over $830 billion from Medicaid and 23 million people losing coverage by 2026. Rather than embrace the AHCA, Senate Republicans crafted their own bill, the Better Care Reconciliation Act of 2017 (BCRA). Similarly, it would effectively eliminate the mandates and numerous taxes associated with the ACA. Notably, however, it differs in its approach to Medicaid. The CBO projected that enactment of the BCRA would remove $772 billion from Medicaid and would increase the number of uninsured Americans by 22 million by 2026. The Senate scheduled a vote on the BCRA prior to Congress’s July 4 recess, but it was ultimately cancelled by Republican leadership because of a lack of votes.

Continue Reading Status of “Repeal and Replace” as of the End of This Week

On Thursday, May 4, 2017, the U.S. House of Representatives narrowly passed the American Health Care Act (AHCA) by a vote of 217 to 213. The AHCA as passed includes recent amendments offered by Representatives MacArthur and Upton. The key provisions that impact every individual, healthcare provider, healthcare insurance carrier, and employer sponsoring a group health plan are explained below.  Continue Reading House Passes the American Health Care Act—What You Need to Know

One of President Trump’s first official actions was to sign an executive order affirming the administration’s intent to seek repeal of the Affordable Care Act (ACA) and directing federal agencies to minimize the economic and regulatory burdens of the ACA to the fullest extent permitted by law. While Congress and the White House continue to work out the specifics of a new healthcare policy, the administration has moved its repeal effort forward in important ways. Continue Reading Congress Continues to Consider Its Affordable Care Act Repeal and Replacement Options While the Trump Administration Moves Forward with Regulatory Action