As congressional groups met this week to work out their differences in the wake of the decision two weeks ago to scrap the American Health Care Act (AHCA), President Donald Trump made a late plea on Wednesday urging Congress to vote on a repeal of the ACA before they left town for their two-week Spring Recess. While Congress opted against voting again on the AHCA this week, they did pass a reinsurance amendment to the AHCA and a separate bill that re-affirms the purpose of stop-loss insurance. Congress is now back in district and is set to return the week of April 24, when they will quickly face a tight deadline to pass a new budget agreement by April 28 to prevent another government shutdown.
After being notified late Wednesday that it would be called into emergency action to consider an amendment to the AHCA, by Thursday afternoon the House Rules Committee voted 9-2 along party lines to add language to the reconciliation bill to create a $15 billion “Federal Invisible Risk Sharing Program” to help insurers cover the costs of their sickest enrollees. The amendment is sponsored by Representatives Gary Palmer (R-AL) and David Schweikert (R-AZ) from the House Freedom Caucus and is similar to the ACA’s temporary reinsurance program that expired at the end of 2016. This reinsurance program is separate from and would be in addition to the AHCA’s “Patient and State Stability Fund,” which is designed to expand coverage, increase insurance options, promote access to benefits, and reduce out-of-pocket spending through $10 billion in annual funding over 10 years.
The new reinsurance program would provide states with $15 billion in funding between 2018 and 2026 to reimburse insurers for high-cost plan enrollees. The program would not function as a traditional high-risk pool, as individuals would continue to buy coverage from the individual market, but if they have certain medical conditions, federal funding would cover their claims cost. This could help bring stability to the fragile market and reduce premiums for all consumers in the individual market. The amendment is short on specifics, including which medical conditions would be covered or how insurers would apply for reimbursement, and instead defers to the federal and state agencies to implement the program. It would also permit states to be able to take over the program in 2020, although there aren’t details on how that would work.
A study by Milliman and the Foundation for Government Accountability found that this amendment could help lower premiums by an average of 31% and result in 2 million fewer uninsured individuals . The study includes several assumptions on provisions that were not included in the amendment, including that the reinsurance would only cover claims that exceed $10,000, that the reimbursements would be made at Medicare rates and not those negotiated by the insurers, and that insurers would transfer the full premiums of these consumers directly to the government in exchange for the protections of the reinsurance program. An earlier version of the amendment included some of these details, but because the amendment that was ultimately passed opted to defer to rule makers to implement, it is unlikely that, should the AHCA be passed with this provision, that it would conform to the study’s assumptions.
Meanwhile, the House voted 400-16 on Wednesday to pass H.R. 1304, the Self-Insurance Protection Act. The bill is sponsored by Representative Phil Roe (R-TN) and clarifies that medical stop-loss insurance cannot be redefined as health insurance coverage at the federal level. The bill would change the federal definition of “health insurance coverage” to make these clarifications that stop-loss plans cannot be regulated as health insurance by amending sections of the Employee Retirement Income Security Act, the Public Health Service Act, and the Internal Revenue Code. The Obama Administration had previously increased oversight of self-insured plans as small employers increasingly moved from the fully insured market to the self-insured market to avoid the ACA’s coverage requirements. H.R. 1304 now heads for consideration by the Senate where there is not a companion bill.
Throughout the week, congressional Republicans have been continuing their discussions over how to tackle health reform moving forward. There remains significant disagreements between members of the far-right House Freedom Caucus and the centrist-Republican Tuesday Group and by the end of the week both groups seemed to admit that there is still no clear path forward. Representative Chris Collins (R-NY), a member of the Tuesday Group, doubted that a deal would ever be possible, noting his discouragement with hard-liners for never being satisfied with the concessions they are given, “The Freedom Caucus continues to play Lucy with the football,” and that, “Nothing’s going to change and they’re not there now. What would get them there?”
Vice President Mike Pence led the White House’s efforts this week to bring the two factions together. However, each of the concessions that Pence tried to win the support of Freedom Caucus members were quickly panned by centrist and mainstream Republicans. This included a proposal that would allow states to opt-out of the ACA’s essential health benefits and community rating provisions. While there would still be a prohibition on excluding individuals with pre-existing conditions, this would allow insurers to charge them more for coverage.
This proposal was later pared down to just allowing states to opt-out of minimum health benefits and narrowly increasing flexibility with age-rating bands, which led to confusion and consternation among members of both groups, as Freedom Caucus members saw the proposal as falling far short of their requests while the Tuesday Group thought that the proposal went too far. This has led to blame being cast by members of both groups and outside organizations, including Heritage Action, which called out the moderate Republicans saying, “They’re opposed because they do not want to repeal Obamacare” and “They do not believe in the basic premises of the Republican party.” Meanwhile, Representative Collins of the Tuesday Group cast blame on House Speaker Paul Ryan (R-WI) and House Majority Leader Kevin McCarthy (R-CA), “I’ve been extremely unimpressed at this point with the job House leadership is doing.”
Following the proposal’s rejection, the White House’s discussions with Speaker Ryan and Majority Leader McCarthy culminated in the demand for Congress to hold a vote on the bill before the two-week break and prompted the Rules Committee vote on the reinsurance amendment. While the House opted against holding a vote this week, just prior to leaving for the break, McCarthy claimed that members could be called back at some point during the recess to vote on a new healthcare package. But with a full calendar of items they must pass awaiting their return—including avoiding a government shutdown and re-authorization of the Prescription Drug User Fee Act—it is unlikely that repeal efforts will be seriously considered until May at the earliest, assuming Republicans determine there is any possibility for crafting a policy solution that will satisfy all constituencies of the party.
As Republicans continue to hash out these disagreements, the White House’s congressional liaison and the conservative-leaning Blue Dog Democrats held a meeting to discuss various issues where they could find agreement. President Trump previously noted that he may need Democratic support to push through his agenda items after Republicans have shown sharp policy disagreements. Yet, Democrats have also pushed back at the administration, including a score of Senate Democrats who called out Health and Human Services Secretary Tom Price for sharing a list of proposed regulatory changes with House Republicans and not Democrats during negotiations over the AHCA, and requested that the administration provide those changes and to work with Democrats on improvements to the ACA.
Democrats have also been relaying their concerns with the White House over the ACA’s cost-sharing reduction subsidies, imploring the administration to continue challenging the House of Representative’s lawsuit on their validity. Nine Democratic senators sent a letter to Attorney General Jeff Sessions this week noting their critical importance to the stability of the marketplaces. In February, the administration was granted a 90-day postponement of the case to determine how to proceed with the case. A federal judge had previously ruled that the subsidies were invalid, and if the administration were to drop their challenge then the payments made by the government to insurers would cease, while insurers would still be required to provide the roughly $9 billion in combined annual subsidy payments to individuals, likely causing insurers to abandon the marketplaces and throw them into chaos.