October 1, 2021

In This Issue
Fast Facts
Federal Agencies Release Second Installment of Surprise-Billing Regulations
Democratic Infighting Delays Reconciliation Process
Urge Your Members of Congress to Support the Commonsense Reporting Act
Plan-Year 2022 Marketplace Registration and Training for New Agents and Brokers
Please Submit Any Follow-Up Info from Your In-District Meetings
State Spotlight: Four States Chosen for New CMS Innovation Model Aimed at Rural Healthcare
Healthcare Happy Hour: Employer Reporting Bill Introduced as Democrats Continue Reconciliation Debate
HUPAC Roundup: Virginia Elections Slowly Drift Toward a Toss-up
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Democratic Infighting Delays Reconciliation Process

According to Speaker Nancy Pelosi (D-CA), there will be a vote tonight on the bipartisan $1 trillion INVEST in America Act, as Democrats scramble to put together a reconciliation bill that the entire party between both chambers can agree on.

The House passed a budget resolution last month that formally began the reconciliation process, creating non-binding commitments for committees to pass their pieces by September 15 and to move forward with the bipartisan bill by September 27, but disagreement on what exactly to include in the reconciliation bill has delayed the process. As usual, the primary divide within the Democratic Party is an ideological wedge between “progressive” and “moderate” lawmakers. Those on the progressive side have vowed to vote against the bipartisan INVEST bill, which is seen as more of a pure infrastructure package, if their desired provisions do not make it into the partisan reconciliation bill. Since the margin for passage in the House is so steep, progressive lawmakers have the power to defeat the measure. On the other side of the coin, famously moderate Senator Joe Manchin (D-WV) informed party leadership that he would not support a reconciliation bill that totals over $1.5 trillion –a full $2 trillion less than the legislation is slated to cost.

One health insurance provision that is universally agreed upon within the Democratic Party is a 10-year extension of the American Rescue Plan’s subsidies that temporarily eliminated the ACA’s subsidy cliff, which are currently set to expire in 2023. This package is also expected to extend ARP’s child and dependent care tax credits. Beyond that, however, there is great disagreement as to what healthcare provisions to include and how far the package should go. Another proposal on the more moderate end of the spectrum, supported by House Majority Whip James Clyburn (D-SC), is the creation of a federally facilitated Medicaid program. There has been discussion for some time regarding how Democrats might expand coverage to this population without compelling states to expand Medicaid. Current legislative language says that, beginning in 2025, a federal Medicaid program would be established to cover consumers in non-expansion states that would closely mirror the benefit package and beneficiary protections of the Medicaid expansion under the ACA. It also implements a maintenance of effort requirement to incentivize states to maintain Medicaid coverage at current eligibility levels.

Of course, the more progressive provisions are already well-known – an expansion of Medicare to cover dental, vision and hearing, as well as lowering the Medicare eligibility age to 60. According to current language, Medicare vision and hearing benefits would go into effect in 2022 and 2023 respectively, while dental benefits would not go into effect until 2028. These benefits would be covered under Medicare Part B. Beneficiaries would be responsible for 20 percent of cost-sharing for preventive and screening services as well as basic services. Beneficiary cost-sharing for major services will be phased in over time, reaching 50 percent in 2032.

Another area of disagreement is how to tackle high drug costs. The Energy and Commerce Committee initially included a provision in its language granting the secretary of HHS the ability to negotiate drug prices, requiring drug manufacturers that increase their prices faster than inflation to pay back that excess amount to the federal government, and capping out-of-pocket costs for Medicare Part D beneficiaries at $2,000 annually. However, Reps. Scott Peters (D-CA), Kurt Schrader (D-OR) and Kathleen Rice (D-NY) joined Republicans in voting against the provisions, therefore preventing them from passing out of committee. Congressmen Peters and Schrader both cited the provisions’ potential to stifle future investment in drug development as their primary reason for opposing the measure, something that NAHU has previously noted could occur.

Aside from these hot-button issues, there are a couple of provisions in the reconciliation bill that NAHU is concerned about, such as the modification of the “firewall” between employer-sponsored coverage and ACA marketplace coverage. The firewall prevents employees who have an offer of affordable, minimum value job-based coverage from receiving premium tax credits in the marketplace. How exactly this affordability percentage is calculated is outlined by the ACA and changes on an annual basis; the IRS recently released guidance decreasing this percentage to 9.61 percent in 2022. Under current language included in the Build Back Better Act, the employee contribution would be permanently reduced from 9.5 percent to 8.5 percent and the indexing requirement would be eliminated. This change would go into effect in 2022.  Another worrisome statute in the reconciliation bill is a mental health parity provision that would expand the DOL’s authority to penalize health insurers and plan sponsors. Currently, the DOL is only able to require employers to reimburse their workers after there are parity violations in their self-funded insurance plans. Since 2008, health insurance plans are required to cover mental illnesses like they cover physical illnesses.

Fortunately, despite disagreement over how to contend with these two legislative packages, Congress was able to pass a stopgap funding bill last night to avoid a potential government shutdown. Shortly after signing the continuing resolution, President Biden stated: “The passage of this bill reminds us that bipartisan work is possible and it gives us time to pass longer-term funding to keep our government running and delivering for the American people." To learn more about the reconciliation process, listen to this week’s episode of our Healthcare Happy Hour podcast.

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