On May 22, 2017, the House of Representatives and the Department of Justice jointly asked the District of Columbia Court of Appeals to continue to hold House v. Price in abeyance, presumably for another 90 days as contemplated by the court’s earlier order. The next status report would be due on August 20, 2017. The court is expected to respond to their request in the near future.
Legal Background
As readers of this Blog know, this case was known earlier as House v. Burwell. The Affordable Care Act (ACA) requires insurers to reduce out-of-pocket limits and other cost sharing for enrollees in marketplace silver plans with household incomes not exceeding 250 percent of the federal poverty level. The House challenged the federal government’s reimbursement of insurers for these payments under the ACA, claiming that no money had been appropriated and that the payments were thus unconstitutional.
The lower court accepted the position of the House on this issue and enjoined the reimbursement until Congress appropriated funds to cover them, but stayed its order pending appeal. The Obama administration appealed. The House asked for additional time to respond, and then, after the election, sought a further delay to give the Trump administration time to develop a position in the litigation. The Trump administration has yet to take a position on whether the payments are legal or not.
The Danger Of Continued Uncertainty For Insurers And The Marketplaces
Leaving the appeal in abeyance leaves the insurance industry in limbo. The Trump administration has refused to commit itself to continue to make the payments for any definite period of time. President Trump has suggested several times that he might cut payments off or might use continued payment of the CSR reimbursement as a bargaining chip to get Democrats to support changes to the ACA.
Insurers, however, must notify the federal government of their preliminary decision whether or not they will participate in the exchanges for 2018 by June 21. In most, if not all, states, they must file their rates for 2018 before that time. Final exchange-qualified health plan rates are due by August 16, 2017, before the next 90-day status call would be due.
Approximately 7 million exchange enrollees qualify for cost-sharing reductions, nearly 60 percent of all enrollees. The cost-sharing reductions are expected to cost insurers that offer qualified health plans about $7 billion this year, more in coming years. The Kaiser Family Foundation projects that insurers would have to raise their silver plan rates by an average of 19 percent, 21 percent in Medicaid non-expansion states, above premium increases they would otherwise seek in order to cover lost CSR payments. As Oliver Wyman and the Urban Institute have pointed out, these premium increases would result in corresponding increases in premium tax credits, increasing the cost of the total subsidy program for the federal government, making it possible for persons eligible for premium tax credits to purchase bronze plans for free and gold plans for little more than silver plans, and making more people eligible for tax credits. The premium increases would also, however, make health insurance in the individual market unaffordable for many people whose income is too high to qualify for premium tax credits.
These scenarios presume, however, that insurers would not decide that exchange markets, or even the individual market as such, are just too risky and abandon them. The individual market constitutes a small part of the total business of most larger insurers, which depend much more on the large group market, administering self-insured employer plans, and Medicare and Medicaid managed care. A number of insurers have already left the exchange or individual market in a number of states, and more will almost certainly follow if the CSR issue is not addressed. Within the past week the National Association of Insurance Commissioners and a group of insurers and business organizations have written to Congress and/or the administration reminding them of the chaos that will ensue in nongroup insurance markets if the CSRs cease to be funded. Most voters apparently agree that the Trump administration will be responsible if the individual market collapses.
As long as the payment of CSRs remains uncertain, insurers cannot know how to set their rates. Some state insurance regulators are reportedly requiring insurers to submit dual rate filings—one filing with and the other without the CSRs. Other states are requiring insurers to file rates assuming CSR payments but indicating how their rates may change if the CSRs are defunded. Yet others are apparently allowing insurers to simply build into their rate filings a large factor for regulatory uncertainty, which would include uncertainty as to the CSRs and also as to the administration’s intentions with respect to enforcing the individual mandate.
Another issue is whether insurers should build all of the potential loss from nonpayment of the CSR reimbursement into their silver plan rates or whether they can spread it across all metal levels. The cost-sharing reductions only apply to silver plans, so it would seem that the cost of losing CSR reimbursement should be built into the silver plan rate. This would also be the best option for consumers, as the premium tax credit amounts are determined by the second-lowest cost silver plan. If insurers are allowed to each determine without direction how to allocate the increased costs among metal levels, the decisions of individual insurers could dramatically affect competition among insurers.
The Question Of Whether The House Has Standing
Finally, House v. Price is not just about the CSRs. Another important issue in the appeal is whether a single house of Congress has standing sue an administration to stop the expenditure of funds that it believes were not properly appropriated. The court below ruled that the House did have a judicially protectable interest in blocking the expenditure of funds in the absence of an appropriation, but the Obama administration appealed this conclusion; the issue is before the appellate court. However the Trump administration feels about the CSRs, it may not want to have a precedent established that either house of Congress can sue it at any time over an appropriations disagreement. Who knows whether friends of the President will control Congress throughout his term?
State Request For Intervention?
Regardless of what the court decides with respect to the request of the House and HHS to continue the case in abeyance, it will also need to deal with a motion filed on May 18 by the attorneys general of 15 states and the District of Columbia asking the court to lift the abeyance for purposes of allowing them to intervene in the House v. Price appeal. The brief sets out in detail the havoc that the litigation is wreaking on the individual insurance markets in the states as well as the problems it is causing them in regulating their markets; it asserts that the Trump administration is not representing their interests in the appeal.
An earlier attempt by two enrollees to intervene was rejected by the court, but since then the problematic position of the Trump administration has become clearer. The House and administration say in their status report that they will address this issue separately. They apparently have 10 days to do so from the date of filing of the states’ motion last week.
The CSR issue must get resolved. And it must be resolved not just for 2017 but for 2018 and beyond. The fundamental objection of Republicans in Congress has been that the money is being spent without an appropriation. Whether or not this is true, Congress should simply appropriate the money and consider itself to have won its point.
from Health Affairs BlogHealth Affairs Blog http://ift.tt/2rLClFL
No comments:
Post a Comment