September 29, 2017

 


 

In This Issue
Fast Facts
BREAKING NEWS: HHS Secretary Tom Price Resigns
Senate Scraps Vote on Graham-Cassidy Bill to Repeal and Replace the ACA
Register Now for the “Live from NAHU” Webinar on October 12 with NAHU CEO Janet Trautwein
President Trump Expected to Release Executive Order on Selling Insurance across State Lines
NAHU to Continue Advocacy for Employer Sponsored Insurance as the “Big Six” Release Tax Plan
Senators Introduce Legislation to Extend One-Year HIT Moratorium
Senate Unanimously Passes Chronic Care Bill with NAHU-Supported Value-Based Insurance Design Measures
Congress to Delay CHIP Reauthorization beyond Tomorrow’s Funding Deadline
What’s Next for Health Reform? Listen to this Week’s Podcast to Find Out!
Register Now for October’s Compliance Corner Webinar: Fuzzy on ERISA Required Disclosures?
HUPAC Roundup
What We’re Reading
Tools
E-mail the Editor
Visit the NAHU Website
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Senate Scraps Vote on Graham-Cassidy Bill to Repeal and Replace the ACA

Following a meeting with Vice President Mike Pence, Senate Republicans announced on Tuesday that they would not be holding a vote on the bill to repeal and replace portions of the ACA offered by Senators Lindsey Graham (R-SC) and Bill Cassidy (R-LA). The announcement came a day after Senator Susan Collins (R-ME) announced that she would not support the bill, becoming the third and deciding vote against the bill along with Senators Rand Paul (R-KY) and John McCain (R-AZ). With the timeline to pass a bill using the reconciliation process for the 2017 fiscal year (FY) ending on Saturday, this puts an end to the prospects of comprehensive health reform for the foreseeable future. NAHU is once again advocating a return to bipartisan health reform to bring immediate market stability ahead of the 2018 plan year.

Earlier this week, NAHU issued a press statement that we would not be supporting the bill as written. The statement noted our concerns with the lack of adequate guardrails for states applying for waivers, for codifying the ACA’s taxes, including the Cadillac/excise tax and the Health Insurance Tax, its stymieing of market-based solutions, and the potential for establishing state-based single-payer healthcare programs. This particular provision had the potential to imperil the very existence of private insurance coverage and eradicate the employer-based insurance system. While NAHU supported earlier iterations of Congress’s health reform proposals, we were unable to support this version given these concerns and the negative impact it would have had on the role of agents and brokers, and your clients’ health insurance options. Our statement called for improving coverage affordability and private health insurance market stability and competition, and noted that the bill lacked these core tenets needed in health reform.

The Senate Finance Committee held a hearing on the legislation on Monday afternoon. This was the first and only hearing on the Senate’s health reform efforts and included testimony from the bill’s primary authors, Senators Graham and Cassidy, along with former Senator Rick Santorum (R-PA) who helped craft the proposal. The hearing came just hours after the latest version of their proposal was released to legislators, prompting backlash from Democrats, who spent much of the hearing decrying the process for a bill affecting more than 320 million Americans and a sixth of the economy. Senator Cassidy blamed Democrats for the process, arguing that they refused to cooperate on legislation. Process questions aside, the hearing also focused on issues from the revised version of the bill, with Senators seeking assurances for constituents with pre-existing conditions, essential health benefits, Medicaid expansion funding, state flexibility, and delivery and payment reform.

Shortly after the hearing on Monday evening, the Congressional Budget Office (CBO) released a preliminary analysis of the bill. The analysis found that the bill would save the federal government $133 billion over 10 years, but acknowledged that it was unable to provide point estimates of the effects on health insurance coverage or premiums given the condensed timeframe. It estimated that the bill would likely lead to millions more uninsured Americans compared to the ACA. The savings would come from the block grants spending less than the net federal subsidies for health insurance, with funding shifting from states that expanded Medicaid eligibility toward states that did not. A full report from the CBO would have taken well into October, necessitating the preliminary analysis for the senate to meet the requirement of obtaining a CBO report ahead of the September 30 deadline for reconciliation.

Senate Republicans deliberated on Tuesday whether they should hold a vote despite its known outcome, but determined that “it would be a mistake to have another failed vote.” Had a vote been scheduled, the bill would have had another hurdle of passing the Senate parliamentarian’s ruling of adhering to the Byrd Rules of budget reconciliation. An earlier Senate reconciliation bill, the Better Care Reconciliation Act (BCRA), had violated the Byrd Rules in July with provisions to expand the ACA’s age-rating bands from 3:1 to 5:1, permitting association health plans, as well as language that would have defunded Planned Parenthood and banned abortion coverage in ACA plans. All of these provisions are present in the current Graham-Cassidy proposal and would almost certainly be stricken for violation of the rules. Therefore, the final bill to be voted on would have either needed to have these elements stripped, which would jeopardize other Republican support, or would have needed 60 votes to avoid a filibuster.

The decision to not hold a vote using the FY 2017 reconciliation vehicle effectively ends that as an option for comprehensive health reform this year. The budget reconciliation process allows the Senate to pass legislation with only a simple majority, avoiding the 60 votes needed for cloture that are otherwise needed to pass legislation. However, there will be other opportunities for Republicans to pass a partisan health reform bill without the aid of Democrats.

They can use the FY 2018 reconciliation vehicle that is currently earmarked for tax reform and either add healthcare to its instructions or make it exclusively for healthcare, or they can wait until next year and purpose the FY 2019 vehicle for health reform. This would still come with the challenge of corralling enough support among Republicans to pass a bill, which they haven’t been able to do to this point. Another option would be to wait until after the 2018 midterm elections when the next class of senators is sworn in. Republicans are very likely to retain their majority, if not expand it, and the new class could give them enough room to pass legislation while still losing the votes within their caucus of those who haven’t supported reforms to this point.

Senators Graham and Cassidy have already begun discussions for how to advance a version of their proposal through regular order, as Senator McCain called for. Following a meeting with President Trump, Graham and Cassidy released a statement that they have committed to holding hearings and working with governors on the next iteration of their plan that would be based on the concept of returning federal funding to the states. Their statement specifically noted that “it is just a matter of time until Obamacare is replaced by a state-centric system closer to patients and more focused on positive health care outcomes.”

It is unclear if Graham and Cassidy plan to use another reconciliation vehicle to advance their new proposal, or if they will use the traditional legislative process that would require support from Democrats to avoid a filibuster. It is unclear what the next steps will be for health reform in the remainder of the year. Prior to the Graham-Cassidy proposal taking shape, Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA) had been working on a bipartisan market stability bill. This would have temporarily funded the ACA’s cost sharing reduction (CSR) program and provided additional flexibility for states to implement health reform. The Trump Administration and House Speaker Paul Ryan (R-WI) announced their opposition to these efforts, which led to Alexander to announce he would no longer pursue them.

Following the demise of Graham-Cassidy, Alexander said, “We stopped the bipartisan talks last week because my goal wasn't just to get a bipartisan agreement—it was to get a bipartisan result, and I didn't see any way to get one in the current political environment. That environment hasn't changed. Maybe it does change—but it hasn't.” Alexander and Murray met this week to find a way to get consensus on a bipartisan deal. Alexander has said that for these to be successful, he will need to get broader buy-in amongst their Senate colleagues and win over the objections of Republicans who see funding for the CSR program as a “bailout” of insurers, as well as Democrats hesitant to weaken the law.

NAHU is optimistic that Congress will resume these bipartisan healthcare discussions to help provide immediate relief for consumers ahead of the 2018 plan year. NAHU has successfully advocated for bipartisan changes to the ACA since the law was passed, including a delay to the Cadillac/excise tax and Health Insurance Tax, and repeal of the small-group expansion and auto-enrollment provisions, the law’s 1099 requirement, the long-term care CLASS Act and the $2,000/4,000 deductible cap. We believe that market stability and affordability should be addressed immediately while Congress continues to debate next steps for comprehensive reforms.

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