On April 20, 2017, a one-page summary of amendments to the American Health Care Act proposed by Congressman Tom MacArthur (R.N.J.) surfaced. It is dated April 13, 2017 and has been presumably been under discussion for a week. It is reportedly a compromise between House Republican moderates, represented by MacArthur, and more conservative members of the Republican Freedom Caucus. It could be considered when Congress returns from its spring recess on April 27.
Congress will have to enact a bill to fund the federal government as soon as it returns and it is hard to imagine that it will also try to enact legislation to amend the Affordable Care Act. Reportedly, however, President Trump would like something to happen during his first 100 days in office, which end on April 29.
What’s In The Amendment?
Reinstating EHBs
The proposal would first “Reinstate Essential Health Benefits as the federal standard.” This would presumably remove the confusing amendment to the American Health Care Act adopted in late March that would have required states to define the essential health benefits package for purposes of premium tax credits.
Keeping Most ACA Market Reforms
Second, the amendment would maintain most of the ACA’s market reforms, including the:
- Prohibition on preexisting condition exclusions;
- Prohibition on discrimination based on gender;
- Guaranteed issue and renewability requirements;
- Coverage of adult children up to age 26 on their parent’s plans; and
- Community rating, except as permitted by waiver.
State Waivers
These provisions would presumably respond to the concern of Republican moderates that the AHCA not undermine access to coverage and care generally. The amendment would also, however, provide “limited waiver options,” presumably included to satisfy the Freedom Caucus. These would allow states to apply for waivers from the ACA’s essential health benefit (EHB) requirements. States could also seek waivers from the community rating rules, except that they could not permit rating based on gender, on age (except for reductions in the 5:1 ratio already included by the AHCA) or on health status, unless the state had established a high risk pool or is participating in a federal high risk pool.
States would have to “attest” that their requested waiver was intended to “reduce premium costs, increase the number of persons with healthcare coverage, or advance another benefit to the public interest in the state, including the guarantee of coverage for persons with pre-existing medical conditions.” The amendment provides that HHS “shall” approve applications within 90 days of determining the application complete.
As compared to current ACA guardrails imposed on the grant of section 1332 state innovation waivers, these conditions are essentially meaningless. Virtually any reduction in essential health benefits, for example, will reduce premium costs for some enrollees, while “another benefit to the public interest of the state” is broad enough to include virtually anything. Moreover, a state must apparently only “attest” that the waiver will accomplish some purpose, not provide evidence that it will in fact do so, as is required for 1332 waiver applications. And HHS has no discretion to deny completed waiver applications.
EHB Waivers
State initiatives to waive EHBs would, as noted earlier, would undermine a number of other ACA insurance protections which are defined in terms of EHB, such as the caps on out-of-pocket expenses or the annual and lifetime limit prohibitions. It could allow insurers to eliminate benefits mandated under the ACA that were often omitted in the individual market prior to the ACA, such as maternity or mental health benefits. It could alternatively allow states to simply permit thinner coverage of mandated categories, perhaps requiring coverage for fewer drugs. But it would mean taking coverage away from people that they now have a right to, which would likely be resisted by patients who need and providers who offer the products and services for which coverage would be eliminated.
Health Status Underwriting Waivers
Waivers that would allow states to permit health status underwriting could dramatically increase premiums for people with high cost conditions to unaffordable levels. High risk pools could reduce the cost of coverage, but would have to be adequately funded. The original $100 billion over nine years provided by the AHCA for states’ stability programs could be used to fund state high risk pools. States would have to provide matching funding beginning in 2020 to access this money. A manager’s amendment added another $15 billion, but it was targeted at maternity and mental health and substance use disorder care. Finally, the most recent amendment to the AHCA added $15 billion to create a national “invisible high risk sharing” program, essentially a national reinsurance program. (For differing views on these programs, see here and here.) The last two funds would presumably not be available for state high risk pools.
Neither the AHCA nor any amendments offered so far create a “federal high risk pool” as contemplated by the amendment. We have a great deal of experience with state high risk pools, which has not been encouraging. High risk pools would segregate high-cost individuals, who account for most of health care spending, in special insurance programs that would likely charge higher premiums and offer more limited coverage. Unless states were willing to offer substantial subsidies, coverage would likely be unaffordable to enrollees. States would also have to establish or reestablish high risk pools as state entities and get insurers to offer coverage in them, which would also take some effort. Although taking high cost enrollees out of the general risk pool could undoubtedly lower premiums for others, the cost to most states of establishing high risk pools could simply be too high.
from Health Affairs BlogHealth Affairs Blog http://ift.tt/2pI2Wnc
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