Leading House Democrats Unveil New Plan to Fortify ACA
This package includes multiple sections to address
affordability, access and reinforcing consumer protections...
Democratic leadership, backed by House Speaker Nancy Pelosi, marked the ninth anniversary of the Affordable Care Act this week by unveiling broad legislation to shore up the ACA, The Protecting Pre-existing Conditions and Making Healthcare More Affordable Act of 2019. This legislative package seeks to reinforce mid-term campaign promises to lower healthcare costs, especially for Democrats who ran in swing-districts.
This sweeping legislative package includes multiple sections to address affordability, access and reinforcing consumer protections. First, the bill would expand eligibility for premium tax credits beyond 400% of the federal poverty level (FPL), as well as increasing the amount of the tax credit for all income brackets. The bill also seeks to eliminate a quirk in the ACA: the “family glitch.” Currently, the law bars subsidies to workers who have access to affordable employer-sponsored coverage for themselves, even if the cost of coverage for the entire family is unaffordable. The newly introduced bill would solve this by making subsidies available based on the family income, allowing more working families to benefit from subsidies who are currently ineligible.
The Democrats’ package also takes aim at the Trump Administration’s final rules on Association Health Plans and short-term limited duration plans. The bill would completely rescind the final rule on AHPs that changed the definition of a bona fide association and established new regulations that allow for an additional method for forming and operating such a plan. In addition, the House Democrats’ bill would scale back the administration’s final rule expanding short-term plans by stipulating that these plans are included in the definition of “individual health insurance coverage” under the ACA and must comply with the EHB coverage requirements of the law and should be limited to three months.
The House Democrats also hope to increase outreach, enrollment and education funds that saw cuts under the Trump administration. The bill would require HHS to increase funding for a navigator program at $100 million per year and fund marketing and outreach for the federally facilitated marketplace at $100 million per year. Furthermore, the bill would create a national reinsurance program, as well as allowing states to form their own reinsurance programs. The Democrats’ plan would also block October 2018 guidance issued by the Trump administration on Section 1332 waivers under which states can get waivers allowing them to use ACA tax credits on plans that do not comply with coverage requirements of the law. Provisions promoting transparency ($100 million for Consumer Assistance Program grants for states) and providing funding for states that want to set up their own state-based marketplace (currently, federal funding is no longer available for states to set up state-based marketplaces after January 1, 2015) are also included in the legislative package.
Notably missing from the Democratic bill is single-payer, Medicare for all or Medicare buy-in plans. This is because incremental reforms are thought by Democratic leaders to be a more viable approach to expanding coverage. This is due to the fact that many on the Democratic side don't support sweeping proposals like Medicare for all or single-payer. The new bill also does not restore funding for cost-sharing reduction (CSR) payments. This is due to insurers finding a way to respond to the end of CSRs; “silver-loading.” Rather than raising the cost of all ACA health plans, most insurers packed CSR-related premium rate increases into just silver-level plan premiums. The law uses the premiums for silver-level plans to determine the amount of federal subsidies available to individuals with annual incomes below 400% of FPL and when premiums for silver plans increased, federal subsidies rose along with them.
Moreover, the legislation was released a day after the Department of Justice (DOJ) took maintained their position that the entire ACA should be invalidated because the individual mandate penalty has been set to $0. The DOJ now fully agrees that the December 2018 court decision (where a Texas federal district court judge declared the entire ACA to be invalid) should be upheld by the Fifth Circuit. This is expands upon the DOJ’s inaction to defend the law suit. The DOJ intends to file its next brief on April 24th alongside plaintiffs who are challenging the ACA. Just a reminder that this ruling is not final and is expected to be engaged in appeals for the next several months, which will likely culminate in a hearing before the Supreme Court in 2020 or 2021. This means that the ACA continues to be the law of the land and compliance with the ACA is still being enforced.