On February 27, 2019, Representative Pramila Jayapal (D-WA) and more than 100 co-sponsors in the House of Representatives introduced the Medicare for All Act (HR 1384). The bill, like its predecessors, creates a single payer, government-funded health care program. The new program would cover enumerated medical benefits, prescription drugs, vision, dental, mental health and substance abuse services.

As expected, progressive House Democrats are using Medicare for All to message their position on coverage expansion heading into the 2020 election. The legislation threatens to expose divides in the Democratic Party, with some Democratic leaders publicly silent on the bill as the left flank of the party tries to advance the proposal. In previous years, other Democrats introduced competing proposals aimed at tackling coverage, including Medicaid and Medicare Buy-In approaches. Messaging the future of the Affordable Care Act (ACA), covering the un- and underinsured, and reducing costs promise to dominate the airwaves in the lead-up to the 2020 presidential election.

It is unclear whether Medicare for All will see a vote on the House floor, either as a whole or in its component parts. Even if the bill were to pass in the House, it is almost certainly doomed in the Republican-controlled Senate. Regardless of the bill’s fate, stakeholders should take this opportunity to prepare for forthcoming conversations about how to address the uninsured population and the rising cost of health care.

Many components of the bill are consistent with versions introduced in previous congressional sessions. There are many questions raised by the legislation: This +Insight focuses on five big ones for stakeholders to consider as they evaluate Medicare for All:

1. Is Medicare for All the Democrats’ “Repeal and Replace”?

Since the enactment of the ACA, congressional Republicans have run on “Repeal and Replace” as a counter message to the Democrats’ signature legislative achievement. When the balance of power shifted in Washington after the 2016 election, pressure intensified on Republican lawmakers to come up with an alternative to the ACA. Ultimately, efforts to repeal and replace the ACA failed legislatively, and efforts to modify the law have been piecemeal and primarily regulatory.

Similarly, Medicare for All and other single payer proposals have largely been Democratic messaging tools, with many of the details unspecified or unaddressed, and many aspects of the proposals ambiguous. If Democrats were to see a presidential victory in 2020, will they be in the same “dog that caught the car” position?

2. How much time is necessary to revamp the US health care system?

Medicare for All is a fundamental, sweeping policy change to the way the United States pays for health care. The legislation reorganizes nearly one-fifth of the nation’s economy. Rep. Jayapal’s proposal envisions a very quick transition to the new system—a two-year period, with certain individuals eligible to enroll in Medicare for All beginning one year after the date of enactment. Other proposals, including Senator Bernie Sanders’ (I-VT) Medicare for All plan, have contemplated longer transition periods (four years in the case of the Sanders plan). In interviews following the bill’s release, Rep. Jayapal stated that the swift transition was necessary because a longer transition period would provide perverse incentives in the marketplace.

As a messaging tool, the short transition period serves its purpose: to illustrate that the bill’s supporters are serious and are taking quick action to reform the health care marketplace. Practically speaking, however, if this or a similar bill were to make it across the finish line, the aggressive timeline could create additional challenges. To ensure success while preventing delay requires a delicate balance.

For example, when the ACA passed in 2010, states were mandated to expand Medicaid coverage and given a four-year transition period to make the necessary changes.^[1] That was a far smaller expansion than the one envisioned by Medicare for All, and lawmakers provided twice the time to implement it. Nine years later, legal complications and administration changes mean the outlook is still murky. At the same time, if the transition is too long, advocates risk giving opponents time to pressure Congress for delays, as evidenced by the repeated delays and suspension of some of the taxes imposed by the ACA.

3. What might supplemental coverage look like?

Like previous single payer bills, this bill outlaws the sale of private health coverage that duplicates the benefits provided under Medicare for All. It similarly prohibits an employer from providing benefits to employees, retirees and their dependents. The bill also covers many services currently served by a supplemental market—vision, dental, hearing, long-term care and prescription medication, for example.

The bill contains two provisions, however, that leave open the potential for a private market to exist. First, the bill allows the sale of insurance for additional benefits not covered by the Act.^[2] Second, like others before it, this bill leaves significant discretion to the Secretary of Health and Human Services regarding coverage for certain categories of services. If the Secretary promulgates rules and regulations that provide minimal coverage, could a private supplemental market thrive? If the Secretary goes the other direction, what would be left for the private market to profitably cover?

4. What is the role of the states?

Under this legislation, states may provide additional benefits for their residents, and may provide benefits to individuals not eligible under the Act at the state’s expense, provided that the state’s rules provide equal or greater eligibility and access than the single payer plan.

States thus could potentially treat Medicare for All as a floor and build policies to expand services and coverage within state lines. However, this would all be on the state’s dime. The bill effectively ends the Medicaid program, which is where many states have the opportunity to innovate with service and coverage expansion. What would states be able to accomplish without a federal matching rate?

5. What becomes of value-based purchasing?

The legislation would require the Secretary to establish a national fee schedule for items and services provided under the Act. The Secretary is required to take into account the value of items and services provided and amounts currently paid. The Secretary will negotiate annually the prices to be paid for pharmaceuticals, medical supplies, medical technology and equipment.^[3]

The legislation sunsets all federal pay-for-performance programs and terminates value-based purchasing, including the merit-based incentive payment system, incentives for meaningful use of electronic health records technology, alternative payment models, hospital value-based purchasing, payment adjustments for health-care-acquired infections, the Medicare Shared Savings Program, independence at home and the hospital readmissions reduction program.^[4]

The bill’s approach of shifting back to fee-for-service payments (as evidenced by the programs the bill would eliminate) is interesting, coming as it does after years of congressional, administration and private market efforts to move toward a value-based payment system. Do the bill’s authors envision reinstituting these types of programs once the new system settles? Do the authors believe these programs are no longer necessary given the global payments approach included in the bill?

Conclusion

There will be ample opportunities to draw out the consequences (intended and unintended) of implementing this sweeping change in how health care is provided in the United States. The House Rules and Budget Committees have already confirmed intentions to hold hearings on this bill. The House Energy and Commerce and Ways and Means Committees, which notably are the committees of jurisdiction, do not have immediate plans to hold hearings on the bill as a whole, but they are already discussing specific policy provisions. The Democratic presidential primary will certainly keep this issue at the forefront of health care policy in 2019 and 2020.

_{[1] In National Federation of Independent Business v. Sebelius, the Supreme Court of the United States ruled that Congress could not require states to expand the Medicaid program. Medicaid expansion then became an option for states.}

_{[2] Section 107.}

_{[3] Section 616.}

_{[4] Section 903.}

The post Five Unanswered Questions on the Medicare for All Act appeared first on The National Law Forum.

With the fate of health care reform—and its repeal and/or replacement—up for grabs in Washington, there is a health-related compliance item outside of health care reform that should be on employers’ radars: health savings accounts (HSAs) and the new Employee Retirement Income Security Act (ERISA) fiduciary rule.

We have previously kept you apprised concerning the evolving saga of the ERISA fiduciary rule, the Best Interest Contract Exemption (BICE), and other related exemptions in a series of posts. As you likely know, post-inauguration, this hotly-debated and controversial rule and its exemptions largely became effective June 9, 2017 (with a transition period extending through year-end).

At this stage, most employers and plan sponsors have engaged in dialogue with their retirement plan investment advisors and recordkeepers to understand what is being done to comply with the rule. However, employers offering HSAs, the custodial accounts that can be paired with high deductible health plans (HDHPs) to gain significant tax benefits, should not turn a blind eye to this rule.

Discussing the ERISA fiduciary rule in context of HSAs may seem surprising or bizarre given that HSAs are generally not plans governed by ERISA. These accounts are employee-owned (no “use it or lose it” applies) and not employer-sponsored. That said, the Department of Labor has taken the position that an HSA should be treated like an Individual Retirement Account for purposes of the ERISA fiduciary rule, given that its investment accounts may be used as savings accounts for retiree health care expenses. Depending upon the level of involvement an employer has with the HAS, including whether the employer offers or actively facilitates the provision of investment recommendations/advice on the HSA investments or receives a benefit (including revenue sharing) from an HSA vendor or investment, ERISA’s expanded fiduciary rule could come into effect.

At a minimum, an employer who offers a HDHP and facilitates HSA contributions should consider whether its involvement could trigger ERISA fiduciary status. This undertaking could involve reviewing HSA vendor agreements and related practices touching investments. Even if it is determined that the employer is unlikely to be a fiduciary for its HSA plan, an employer may still benefit from implementing certain features of ERISA best practices to mitigate risk for their organization and employees during this transition time period.

For more legal analysis, go to the National Law Review.

The post HSAs and the ERISA Fiduciary Rule: What Employers Should Know appeared first on The National Law Forum.

Will the Changes Result in Additional Support?

Securing the required votes to pass the revised BCRA will be very difficult, with two GOP Senators, Rand Paul (R-KY) and Susan Collins (R-ME) announcing soon after its release they cannot even support beginning debate on the measure, a key procedural Senate vote. Senator Paul believes the bill doesn’t go far enough to repeal the Affordable Care Act (ACA) while Collins believes the Medicaid cuts are far too deep.  Four other Republican Senators have publicly said they remain undecided and many moderates in the Caucus have not announced their position.

Currently, Senate Republican Leader Mitch McConnell (R-KY) plans to begin the procedural process to allow debate on the bill as early as next week, following an anticipated Congressional Budget Office score Monday of the new language and the possible addition of an amendment by Senator Ted Cruz (R-TX).  In an effort to appease more conservative Senators, the Cruz amendment would allow non-ACA compliant plans to exist alongside ACA compliant plans in the exchanges. However, that causes angst for many moderates who are concerned about the potential loss of assurances such as coverage for pre-existing conditions.  Similar to the dynamic that unfolded in the House, moderates and conservatives in the Senate are deeply divided and appeasing one group tends to aggravate the other.

The following are highlights of the changes in the most recent version of the BCRA:

Changes to the Medicaid Provisions

• Allows CMS to increase federal contributions to states above the limits imposed by per capita caps or Medicaid block grant amounts, if the state, or a location within the state, has a declared public health emergency.
• Modifies requirements for Medicaid block grants to allow them to be applied to the Medicaid expansion population, and to prohibit states from using unspent block grant funds for non-Medicaid services.
• Would retain an ACA requirement for states to cover children up to age 19 with incomes below 133% of the federal poverty level.
• Allows states to receive relief from reductions in allowable disproportionate share hospital (DSH) payments during the following quarter in 2018 or 2019 if the state terminates its Medicaid expansion, and modifies the formula by which non-expansion states can receive additional DSH allocations.
• Would allow seniors and the disabled to have Medicaid cover services provided during the three months prior to enrollment, as in current law.  Other Medicaid beneficiaries would be limited to retroactive coverage during the month of enrollment.
• Would allow states to apply for an aggregate of up to $8 billion in additional federally funded payments for home and community based services (HCBS) providers through a demonstration project.  The 15 states with the lowest density are given priority in applying for these demonstration project funds.
• Would expand federal support for services provided to members of an Indian tribe by enrolled Medicaid providers that are not Indian Health Services facilities.

Insurance-Related Changes

• Consumers will be permitted to use HSA funds to pay health insurance premiums for the first time.  This will allow consumers to use pre-tax dollars to pay for health insurance, and could reduce the financial incentives that have long supported employer-provided health insurance coverage.
• The so-called “Cruz Amendment” has been included in the revised BCRA.  This amendment would permit insurers to sell individual health insurance policies that do not comply with the market reforms in the ACA, so long as the insurer also sells an ACA-compliant policy in the same state.
  • The non-ACA-compliant policies would be exempt from a number of popular market reforms, including:
    • Actuarial value requirements
    • Essential health benefits coverage
    • Limits on out-of-pocket expenses
    • Community rating
    • Guaranteed issuance of policies
    • Prohibition of pre-existing condition exclusions
    • Limitations on coverage waiting periods
    • No-copay preventive care coverage
    • Medical Loss Ratio requirements
  • Coverage under a non-ACA-compliant policy does not constitute creditable coverage, so persons moving from non-compliant policies to ACA-compliant policies will be subject to a 6-month waiting period.
  • Non-ACA-compliant policies are not included in the ACA’s risk adjustment program (42 U.S.C. §18063).

Other Notable Items

• Substance use disorder treatment and recovery service funding is increased from $2 billion for one year to approximately $5 billion per year from 2018 through 2026.
• Purchasers in the individual market will be able to buy catastrophic/lower-premium plans and still be eligible for tax credits.
• While most of the Affordable Care Act tax repeals remain, this version does not repeal the net investment income tax, additional Medicare tax, and the limit on insurance company deductions for executive compensation.

As we continue to monitor the Senate debate on the BCRA, we will provide updates on the status of the Senate repeal and replace efforts.

This post was also written Nick Welle, Anil Shankar , Jennifer F. Walsh, Morgan J. Tilleman Marian E. Dodson of  Foley & Lardner LLP,

The post Senate Unveils Changes to the Better Care Reconciliation Act of 2017: Significant Changes, but Uncertainty Remains appeared first on The National Law Forum.

Cries of ‘Hands off my health care’ mask the benefits of the Affordable Care Act

Hands off my health care!

Remember those words from the health care reform debate of two years ago? I’m confident we’ll be seeing them on protest signs in Washington again this week as the Supreme Court hears arguments on the constitutionality of the Affordable Care Act. And we’ll see them again when the protest campaigns shift into high gear this summer.

One of the rules of effective communications is to keep it simple. In attacking something you don’t like, use as few words as possible, and make sure those words pack an emotional wallop. That’s why lies about “death panels” and a “government takeover” of health care have been so potent. Unfortunately for those advocating reform, it’s far more challenging to explain and defend a law as complicated as the Affordable Care Act.

Maybe, then, supporters of the law should co-opt the “hands off” slogan and make it their own. That would require adding just a few more words here and there to make clear what would be lost if the law is repealed, gutted or declared unconstitutional.

Here’s are some suggestions:

“Hands off my health care! Granny doesn’t need her meds all year anyway!”

The Affordable Care Act is closing the despised and even deadly “doughnut hole” in the Medicare prescription drug program, which was designed in 2003 largely by lobbyists for insurance and pharmaceutical companies who were more interested in protecting their companies’ profits than helping seniors stay alive. The way the law was cobbled together, Medicare beneficiaries get prescription drug coverage only up to a certain amount. When they reach that limit, they fall into the “doughnut hole” and have to pay about $4,000 out of their own pockets for their prescriptions before coverage resumes. As a consequence, many people stop taking their medications because they don’t have the money to pay for them. And many of them die. The Affordable Care Act has already shrunk that gap and will close it completely in 2020.

“Hands off my health care! Who cares if insurers refuse to cover sick kids?”

Before the Affordable Care Act, insurance companies routinely refused to insure children who were born with disabilities or who developed life-threatening illnesses like diabetes or cancer. It was perfectly legal for them to refuse to sell coverage to anyone — even children— who had what insurers call a “pre-existing condition.” The reform law already requires insurers to cover all kids, regardless of health status. It will apply to the rest of us in 2014.

“Hands off my health care! My 24-year-old daughter can just stay uninsured!”

Insurers have long had a policy of kicking young adults off their parents’ policies when they turn 23. Many of these young folks don’t have the money to buy coverage on their own—and a lot of them can’t buy it at all because of, you guessed it, pre-existing conditions. That’s why young people comprise the biggest segment of the uninsured population. Because the Affordable Care Act allows parents to keep dependents on their policies until they turn 26, an estimated 2.5 million young people had become insured again as of the end of last year.

“Hands off my health care! If I lose my coverage because I lose my job, so be it!”

Millions of Americans fall into the ranks of the uninsured every year when they get laid off. That’s one reason the number of people without coverage swelled to 50 million during the recession. Many of them can’t afford to buy insurance on their own and many of them have—you guessed right again—pre-existing conditions and can’t buy it at any price. Starting in 2014, not only will the Affordable Care Act prohibit insurers from refusing to sell coverage to people of any age because of their medical history, it will also provide subsidies to low-income individuals and families to help them buy insurance.

“Hands off my health care! It’s not my problem if your insurance company dumps you when you get sick!”

To avoid paying claims, insurers for years have cancelled the coverage of policyholders when they got sick. A former nurse in Texas testified before Congress in 2009 about getting a cancellation notice from her insurer the day before she was to have a mastectomy because she had failed to note on her application for coverage that she had been treated for acne. The Affordable Care Act makes it illegal for insurers to cancel policies for any reason other than fraud or failure to pay premiums.

“Hands off my health care!” Maybe we ought to think that through a little bit more before we take to the streets with those words on our placards. Insurers who profited from the way things used to be will laugh all the way to the bank if you start waving those signs, but you and people you love might live to regret it. On the plus side, at least for the special interests, you probably won’t live as long.

Signs from a Tea Party protest in St. Paul, Minn.Flickr Creative Commons/Fibonacci Blue

Reprinted by Permission © 2012, The Center for Public Integrity®

The post Slogans versus substance in the battle over ObamaCare's future: ANALYSIS appeared first on The National Law Forum.