Top Takeaways from this week – (1) The current tax reform package includes a repeal of the individual mandate; (2) House republicans have introduced a number of standalone bills that delay several ACA taxes; and (3) Open Enrollment for the federally-facilitated marketplace ends tomorrow.
Congressional Action –
Yesterday, the House-Senate Conference Committee met to discuss and resolve differences between the two chambers’ versions of the Tax Cuts and Jobs Act (H.R. 1/S. 1). While the Senate’s version had originally included a repeal of the mandate, the House’s version did not.
Both chambers have now reached an agreement in principal on the tax bill, which will include a repeal of the ACA’s individual mandate, per a statement from Senate Majority Leader McConnell (R-KY). The final bill will be voted on next week.
Sen. Collins (R-ME), a key swing vote, has said that her vote on the final bill is contingent on Congress passing two market stabilization bills that would fund cost-sharing subsidies for two years, allow greater state flexibility for section 1332 waivers, and provide funding to states to establish reinsurance programs or high-risk pools. On Tuesday Sen. Collins noted, “I do expect the commitment that it will be passed before the end of the year will be kept.”
Yesterday Sen. Collins noted that she received assurances that the bills will be included in an upcoming spending bill, but neither were included in the House appropriations bill released last night that would reauthorize the CHIP program for five years, and would provide full-year funding for defense programs and extend fiscal year 2017 funding levels through January 19 for other domestic spending programs. The Senate is expected to largely rework the bill, which may entail adding the market stabilization provisions.
The White House also backs the plan to pass market stabilization legislation, per Senate HELP Committee Chair Alexander (R-TN), who noted, “President and Vice President are strongly for it and are advocating for it publicly and privately.”
However, others have argued that the market stabilization bills will not be enough to counter the negative effect of eliminating the individual mandate on the individual insurance markets. The American Academy of Actuaries sent a letter on Tuesday to Congressional leaders saying that “eliminating the individual mandate would lead to premium increases,” regardless of whether the market stabilization legislation being contemplated is passed. The letter notes, “while making cost-sharing reduction reimbursements to insurers, as would be provided for through separately-introduced legislation, would offset premium increases due to the prior termination of those payments, it would not offset premium increases due to an elimination of the mandate.”
On Tuesday, House Ways & Means Committee republicans released several bills that would delay a number of ACA taxes set to go into effect on January 1:
- R. 4617, introduced by Reps. Erik Paulsen (R-MN) and Jackie Walorski (R-IN), delays the effective date of the medical device tax until 2023;
- R. 4618, introduced by Rep. Lynn Jenkins (R-KS), amends the Internal Revenue Code to include over-the-counter drugs as a qualified medical expense with health savings accounts for two years;
- R. 4620, introduced by Rep. Kristi Noem (R-SD), provides relief in 2018 from annual fee imposed on health insurers, if the insurer provides the plan holder with a premium rebate and delays the fee in 2019 for all insurers;
- R. 4619, introduced by Rep. Carlos Curbelo (R-FL), provides temporary relief from the annual fee imposed on health insurance providers to the extent that such fee is due to Puerto Rican health insurance; and
- R. 4616, introduced by Reps. Devin Nunes (R-CA) and Mike Kelly (R-PA), provides a one year moratorium on the employer mandate and provides for a three-year delay in the implementation of the Cadillac tax.
Also on Tuesday, Sen. Johnson (R-WI) and Rep. Meadows (R-SC) introduced the Repeal Insurance Plans of the Multi-State Program Act (RIP MSP Act) (S. 2221), which would repeal the ACA’s multi-state plan program.
Meanwhile, House Speaker Ryan (R-WI) is already thinking ahead to next year, suggesting today that the next reconciliation bill for fiscal year 2019 will tackle entitlement reforms and that next year Congress will also return to ACA repeal, noting that “Obamacare is collapsing and failing. We won’t be able to ignore that problem, so we’re going to have to revisit the problem of a health care marketplace that is collapsing.”
Administrative Action –
Yesterday, CMS released updated enrollment data for the sixth week of Open Enrollment, finding that over 1.07 million people selected plans using Healthcare.gov, including almost 389,000 new consumers, totaling over 4.68 million since the beginning of open enrollment. Open enrollment ends on Friday; enrollment this year is expected to fall short of prior years due to a shorter open enrollment period, increased uncertainty due in part to outreach and marketing cuts, and higher premiums for unsubsidized coverage in many areas.
On Tuesday, Senate Finance Committee Ranking Member Wyden (D-OR) and Senate HELP Committee Ranking Member Murray (D-WA) sent a letter to HHS Acting Secretary Hargan and CMS Administrator Verma urging them to extend open enrollment for the individual insurance market from December 15 until January 31, 2018 to give consumers more time to purchase health insurance. Yesterday, Sens. Wyden and Murray joined Sen. Casey (D-PA) as well as House Ways & Means Committee Ranking Member Neal (D-MA) and House Energy & Commerce Committee Ranking Member Pallone (D-NJ) in another letter to HHS Acting Secretary Hargan and CMS Administrator Verma requesting that HHS and CMS offer people seeking to obtain heath coverage on the final day of eligibility a grace period if they are unable to access Healthcare.gov due to high demand.
CMS also released a report on effectuated enrollment for the first half of 2017, finding that as of September 15, 2017, an average of 10.1 million individuals has effectuated coverage through June 2017, meaning that they had selected a plan and paid their premium.