The fate of healthcare reform remains in question a week after House Speaker Paul Ryan (R-WI), in consultation with President Donald Trump, decided to cancel a scheduled vote last Friday on the American Health Care Act (AHCA), the reconciliation bill to repeal and replace certain provisions of the Affordable Care Act (ACA). Following this decision, NAHU’s Legislative Council Chairman Dave Mordo was interviewed this week on what this means moving forward and what can be done to stabilize the market for 2018. Meanwhile, congressional Republicans have sent mixed messages as to whether they would attempt to bring back legislation to repeal and replace the ACA. However, until any legislation is passed by both chambers and signed into law, the ACA will remain the law of the land and NAHU will continue to press Congress and the Trump Administration to make as many changes as possible that will ease the law’s impact on the agent and broker community and your clients.
Congressional Republicans have expressed dismay at the failure to reach a consensus last week and make good on their seven-year promise to repeal and replace the ACA. After the failure to hold a vote last week, members of two opposing factions of the Republican caucus met to attempt to find common ground, the conservative House Freedom Caucus and the moderate Tuesday Group. But talks broke down early this week and further discussions were cancelled after sharp policy disagreements prevented consensus. Republican leadership encouraged them to work out their differences but they were not part of the talks, which moderate Republicans faulted for the continued inability to work together.
White House Press Secretary Sean Spicer claimed that Speaker Ryan’s and President Trump’s decision to scrap the planned vote was because the deal that was forged was a “bad deal” and that passing the bill would have deviated from the president’s vision for healthcare reform. Speaking on behalf of the president, Spicer said, “It's not just about making deals. It’s knowing when to walk away from deals and knowing [that] when there’s a bad deal, that’s the only solution.” Spicer also noted, “I think [President Trump] smartly recognized that what was on the table was not going to be keeping with the vision that he had, and so he decided that this was not the time and that a deal was not at hand.”
There are several options that Congress is evaluating to reconsider legislation to repeal and replace elements of the ACA. These include using the existing reconciliation vehicle, but instead of attaching numerous healthcare reform items to the bill, it would only repeal core elements of the ACA that can reach a consensus of the requisite number for passage in both the House and Senate (currently 215 and 51 votes, respectively for a reconciliation bill). This could help bring along some Republicans who challenged the provisions to include defunding of Planned Parenthood (which a separate Planned Parenthood de-funding measure was passed by the Senate yesterday in a 51-50 vote with the tie-breaking vote by Vice President Mike Pence), or drastic changes to Medicaid (which were opposed by several moderates in states that expanded the program). Yet, a paired-down package would also have its own challenges, as while it may attract some support from the conservative House Freedom Caucus, it may lose support from moderate Republicans who also opposed the AHCA last week because it would result in immediate coverage losses for their constituents.
Another option is for Republicans to drop its appeals to get support from the House Freedom Caucus, many of whom have not shown concrete evidence that they are seriously considering proposals to vote in favor of a package, and instead forge a bipartisan agreement with Democrats. There are 237 Republican members of the House, of which roughly three-dozen belong to the most conservative or Freedom Caucus, and may not be supportive of any legislation that isn’t ideologically pure and doesn’t meet all of their requirements. For his part, President Trump continued his intimidation of the House Freedom Caucus with a tweet on Thursday that, “The Freedom Caucus will hurt the entire Republican agenda if they don't get on the team, & fast. We must fight them, & Dems, in 2018!” The tweet follows similar statements made by the president indicating that he would either directly or indirectly support primary challengers to members of the Freedom Caucus, most of who represent solidly Republican districts.
Without the support of the Freedom Caucus, the House can count roughly 200 Republican votes they should theoretically be able to whip to vote in favor of a compromise package, and therefore would need 15-18 moderate Democrats to join them. While the universe of moderate members of both parties has shrunk in recent years, there are several dozen Democrats who have joined with Republicans on several ACA reform measures and would be targets for bipartisan agreement, such as Representatives Kyrsten Sinema (AZ), Kurt Schrader (OR), Ann McLane Kuster (NH), Tony Cárdenas (CA), Scott Peters (CA), Dan Lipinski (IL), Mike Thompson (CA), Ami Bera (CA), John Carney (DE), Joe Courtney (CT), Collin Peterson (MN), and Julia Brownley (CA). Each of these Democratic representatives has supported bipartisan legislation in recent years that would make substantial changes to the ACA.
The bipartisan route could be pursued either through the reconciliation vehicle or through regular order, which would require 60-votes in the Senate, and therefore would need the support of at least eight Democrats in the chamber, assuming all 52 Republicans also support the bill. NAHU has long advocated for making piecemeal changes to the ACA that can achieve bipartisan support and therefore pass Congress and be signed into law. NAHU has been able to garner bipartisan support on a number of smaller changes to the ACA, including a delay to the Cadillac/excise tax and Health Insurance Tax, repeal of the small-group expansion and auto-enrollment provisions, the law’s 1099 requirement, long-term care CLASS Act and the $2,000/4,000 deductible cap. While NAHU is working with legislators on larger changes to the ACA in the ongoing discussions of a repeal and replacement, we will also continue to advocate for piecemeal changes to the law where lawmakers can find consensus.
This week, Senators Lamar Alexander (R-TN) and Bob Corker (R-TN) introduced draft legislation that would provide a legislative fix to the ACA and could potentially attract bipartisan support from legislators where the marketplaces have struggled to attract insurers. Their bill would permit consumers to use the ACA’s advanced premium tax credits to purchase coverage outside of the exchange if there are no participating insurers on the state’s marketplace where they live. Nationwide, roughly a third of Americans live in areas where only one insurer is offering a plan on the marketplace, including in Knoxville, Tennessee, where the bill sponsors represent roughly 40,000 residents who currently only have plans offered by Humana, but announced this week that it will no longer offer marketplace plans for 2018. NAHU has called for similar proposals that would allow consumers to purchase subsidized coverage outside of the marketplace.
In addition to the Alexander/Corker plan, NAHU will also advocate for other solutions to improve the law’s impact on agents and brokers and your clients:
- Preserve the employer exclusion of health insurance
- Permanently repeal the Cadillac/excise Tax
- Permanently eliminate the national premium tax (HIT tax)
- Fully repeal the Medical Loss Ratio (MLR) requirement
- Allow tax credits to be used outside of the marketplace if fewer than two choices are offered in a state
- Allow any person to purchase catastrophic category coverage regardless of age or income status
- Stabilize the market: tighten both open enrollment and special enrollment periods to reduce adverse selection
- Allow states to be eligible for funding for new hybrid high-risk pools
- Increase flexibility for HSAs
- Limit special enrollment periods and require documentation
- Reduce 90-day grace period for individuals with premium tax credits to 30 days
- Immediate restoration of HIPAA Certificates of Credible coverage
- Allow “grandmothered” policies beyond the scheduled expiration date of 2018
- Redefine the MLR formula to exclude broker commissions
- Allow composite rating in fully insured plans
- Remove the requirement for standardized benefit plans to be offered in marketplaces
- Review and simplify the IRC §§6055 and 6056 reporting requirements
- Remove limitations on keeping grandfathered plans
- Work with NAHU’s state chapters to pursue ACA Section 1332 Waivers to provide more flexibility to modify certain parts of the ACA.
Finally, until any legislation or regulations are formally enacted into law, the ACA remains the law of the land and all of its mandates, penalties, and enforcement remains in effect and your employer and individual clients should continue to follow all rules and regulations that are currently in place.