DCMedical News: January 8, 2018
DCMedical News
Washington, D.C.
Monday, January 8, 2018
THE BIG STORY TODAY IN HEALTH CARE
Association Health Plans (AHP) and similar attempts at price control through plan design and benefit limitation, creating an insurance market parallel to that created by PPACA (the Patient Protection and Affordable Care Act, “Obamacare”), at lower cost and devoid of PPACA’s structural protections.
Friday’s Federal Register had the proposed rule (found here) which changes the definition of “employer” under ERISA, and fulfills one of the directives of the President’s October 12, 2017 Executive Order (found here). Comments are due by March 6. Here is an excerpt from the statement of purpose: “The regulation would modify the definition of ‘employer,’ in part, by creating a more flexible ‘commonality of interest’ test for the employer members than the Department of Labor . . . had adopted in sub-regulatory interpretive rulings under ERISA section 3(5). . . the proposal would also permit working owners of an incorporated or unincorporated trade or business, including partners in a partnership, to elect to act as employers for purposes of participating in an employer group or association sponsoring a health plan.”
Once created, AHPs will have the flexibility large employers have concerning benefits. While the AHP proposal retains protection for those with pre-existing conditions, and prohibits lifetime limits on benefits, it would allow associations to buy health insurance that does not cover the ten “essential health benefits,” which include mental health, substance abuse treatment, maternity care and prescription drugs. The most expensive benefit likely to be limited or eliminated is maternity coverage.
The other shoe: short term plans, with nothing “essential” required. This second proposed rule could have much broader exemptions from PPACA. This proposal (also presaged in the October 12 Executive Order) is expected to lift the last administration's restrictions on short-term health insurance plans which would, it is anticipated, allow such plans to last for 12 months, and to be renewed. Higher prices for purchasers with pre-existing conditions may also be allowed with the short term plans.
So the AHP proposal would put the associations (including collections of otherwise unrelated or unconnected small groups and individuals) on the same footing as large employer plans. The large employer plans are still subject to PPACA requirements, but the short term plans would likely not be. The bottom line: the Administration could claim credit for having introduced much lower priced health insurance, while critics of the Administration would point to the role of such plans in further eroding balance in the PPACA marketplaces and in health insurance markets generally. The skimpy plans and skinny networks may become the equivalent of “As Advertised on Late Night TV” health insurance.
HEALTH INSURANCE, MEDICARE, MEDICAID, COMMERCIAL
Keeping the name CHIP out of legislation: a new CBO report (found here) for CHIP (now the Keep Kids’ Insurance Dependable and Secure Act of 2017) says that, after repeal of the individual mandate (reduction of tax to $0), the cost of extending CHIP for five years has gone from $8.3 billion to one tenth of that amount. CBO’s reasoning? Marketplace premiums will rise with elimination of the individual mandate, so the cost of enrolling a child in coverage through marketplaces will rise, so covering the child through CHIP will lead to a larger reduction in spending. Also, a larger number of children would be uninsured without the individual mandate, with one result that some parents will enroll themselves and their children through marketplaces, same result. Finally, premium differences by age would result in higher federal spending per child in the marketplaces. A nice chart is appended to the CBO letter, showing no free lunch in health insurance for children. Reduction of 90% ($8.3 billion to $.8 billion) of the cost will reduce or eliminate the pressure for “pay-fors” offensive to their opponents.
EVENTS
Your January Calendar:
January 9: Senate HELP holds a hearing on "The Opioid Crisis," 10:00 a.m., 430 Dirksen Senate Office Building
Senate Finance Committee holds a hearing on the nomination of Alex Azar II, to be HHS secretary, 10:00 a.m., 215 Dirksen
January 11: Kaiser Family Foundation, on Health Reform 2020, 8:30 to 3:00, 1330 G St., N.W., Washington, D.C.
January 11: MedPAC, continuing to Friday, January 12 (agenda here)
January 17: Reinventing Rural Health, BiPartisan Policy Center, 1225 Eye Street, Washington, D.C.
January 25: MACPAC, 1800 M. Street, Suite 650, Washington, D.C., and continuing to Friday, January 26
January 29: COGME, Bethesda, MD, Livestream at https://hrsa.connectsolutions.com/cogme-council/, also January 30
To our new readers: You have been added to our list of complimentary recipients of this newsletter, suggested by a friend or colleague. If it is too much for your inbox, just hit the “unsubscribe” button. If not, here is what you may find: an entirely independent newsletter, free of ads for astro-turf (false grass-roots) pharma and “managed” care organizations (looking at you Politico!), source documents (when not copyrighted) and a narrative (from fifty years’ experience in the field). For doctors, an early warning sign of the next round of policy-by-slogan, some guidance amid the whirling blades of reimbursement menace. For hospitals, heads up, talking points, cautionary notes. For nurses, how to manage complexity on behalf of your patients. For everyone else, hopefully useful information or perspective. Your suggestions for additional recipients for complimentary copies are welcome. Those with paid subscriptions will receive a minimum of 100 issues per year, publishing at least every day that one or another House of Congress is in session.
Notes to: Fred Hyde, MD, JD, MBA; fredhyde@aol.com