ACA Round-Up: Governors Offer Individual Market Stabilization Proposals And More

On August 30, 2017, governors John Kasich of Ohio, John Hickenlooper of Colorado, and six other Republican, Democratic, and Independent governors sent a letter to the Republican and Democratic leaders of the House and Senate asking them to take immediate steps to restore stability and affordability to the individual health insurance market. The letter was sent ahead of the testimony governors are expected to offer to the Senate Health, Education, Labor, and Pensions committee on September 7.

The immediate steps recommended by the governors include:

• funding cost-sharing reduction payments through 2019;
• creating a temporary fund to stabilize the reinsurance market, funded for at least two years;
• exempting insurers that cover counties with only one exchange insurer from the health insurance tax on their exchange plans and allowing residents of these counties to buy into the Federal Employees Health Benefit Program; and
• keeping the individual mandate until a better solution to encouraging continuous coverage is found, subject to states implementing alternatives through state waiver programs.

The governors also suggest additional steps that states could take and Congress could facilitate to encourage market stability. These include:

• federal and state outreach and enrollment efforts to encourage younger, healthier people to enroll in the individual market;
• fixing the "family glitch" to allow families that are not offered affordable family employer coverage to gain individual coverage;
• promoting appropriate enrollment, for example, by shortening grace periods for non-payment of premiums, verifying special enrollment eligibility, or limiting exchange enrollment for individuals eligible for government programs;
• strengthening federal risk sharing programs; and
• giving states more flexibility for coverage redesign, including developing alternatives to ACA essential health benefit requirements that do not reduce comprehensiveness or affordability of coverage.

Finally, the governors urge Congress and the federal agencies to:

• not duplicate regulatory efforts of the states (while recognizing the need for common federal standards):
• streamline the 1332 state innovation waiver procedures, including allowing states to build on approved waivers, get fast-track renewal authority, and measure deficit neutrality across the life of a waiver and across federal programs; and
• encourage value-based payments and consumer empowerment.

Attached to the letter is a one–page menu of state reform options, including many of those included in the letter, but also recommendations that states:

• encourage participation across lines of businesses (Medicaid MCO, state Employees);
• require SEP enrollees to maintain continuous coverage or face penalties or waiting periods; and
• consider combining individual and small group or private insurance and Medicaid risk pools to create larger, more stable, risk pools.

The eight governors are by and large moderate Democrats and Republicans and do not necessarily speak for the full political spectrum of governors, much less of Congress. But a number of the proposals mirror those submitted by a bipartisan group of experts for the Bipartisan Policy Center on August 30, 2017 and suggest a path forward for health reform that could be bipartisan if Congress and the President are willing to embrace it.

Senate Parliamentarian: ACA Repeal Reconciliation Instructions Expire September 30

On September 1, 2017, Senator Bernie Sanders (D-VT), ranking member of the Senate Budget Committee, announced that the Senate Parliamentarian had determined that the budget reconciliation act instructions to repeal the Affordable Care Act will expire on September 30, 2017. This means that after that date, the Senate will no longer be able to repeal the ACA without Democratic support, unless it enacts a new reconciliation resolution for 2018 with repeal instructions.

This does not, of course, block a bipartisan effort to amend the ACA, nor does it block the use of a must-pass vehicle, like the debt ceiling bill or the Children's Health Insurance Program funding bill, to attempt to enact changes to the ACA.

Judge Orders Government To More Fully Consider Alternative Approach To Out-Of-Network Emergency Care Rates

On August 31, 2017, Judge Colleen Kollar-Kotelly remanded to HHS, Labor, and Treasury for reconsideration their final rule regarding payment of out-of-network emergency room physicians in American College of Emergency Physicians v. Price.

Recognizing that consumers often do not have a real choice as to where they receive emergency medical care, the ACA requires insurers to cover out-of-network emergency medical treatment with the same copayment amount or coinsurance rate that consumers would pay for in-network services. Recognizing that insurers could effectively bar access to emergency services by paying unreasonably low rates for emergency services, thus imposing unaffordable balance bills on insureds, the departments proposed a rule requiring insurers to pay for emergency care the greater of 1) in-network rates, 2) the rate the insurer generally used for out-of-network services, or 3) the Medicare rate.

During the comment period on the proposed rule, the plaintiffs and others objected to this rule, asserting that rates that insurers used for out-of-network services, such as "usual, customary, and reasonable" are not transparent and could be manipulated by insurers. They recommended that the departments use a neutral fee database, such as FAIR Health, instead. The departments dismissed these comments with only cursory consideration.

The court held that the departments had not responded to the comments in a reasoned manner and considered reasonable alternatives, as they are required to do under the Administrative Procedures Act. Agencies must respond to all comments that if adopted would require a change in the proposed rule. The court acknowledged that the departments had offered a number of explanations for their decision in their summary judgment briefs. But, the court concluded, their obligation was to consider the comments during the rulemaking proceeding on the record. The court remanded the rule to the departments to address the comments. In the meantime, the rule remains in effect and emergency medical providers will continue to be reimbursed under it.

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