Well, it is that time of year again, when dry leaves start skittering around and the days get shorter. School supplies have been purchased and tucked into backpacks, and first-day-of-school photos have been filling up my Facebook page. Summer recess is also over for Congress, which returned to work after Labor Day. What can we expect from the Senate and the House during what remains of 2017? With back to school as a theme, I thought it would be interesting to look at how Congress might deal with the three Rs of health care – reading, writing, and ‘rithmetic.
I think this year, the numbers tell the story:
Less than a dozen: The number of working days left in the Congressional session for federal fiscal year 2017
The Senate’s parliamentarian recently confirmed that September 30, the end of the fiscal year, is the deadline for passing legislation aimed at repealing and replacing the Affordable Care Act (ACA) through budget reconciliation. Less than a dozen days doesn’t give Congress much time to address the many items on its to-do list. Funding the government for 2018, raising the debt ceiling, and flood-relief funding related to recent hurricanes have been high priorities, which were temporarily solved last week with a package signed into law after quick deliberation in Congress. But on the health care front, major issues still on the table are reauthorization of funding for the Children’s Health Insurance Program (CHIP) and the extension of a handful of programs in Medicare.
The Senate Committee on Health, Education, Labor, and Pensions (HELP) held hearings on September 6 and 7 to explore ideas to shore up the public health insurance exchanges and the individual market.1 Witnesses at the September 6 meeting included state insurance commissioners, while the next day’s hearing featured Republican and Democratic governors from five states (see the first story on this week’s Health Care Current). While this is an important topic, action in September is unlikely. HELP Committee Chairman Lamar Alexander (R-TN) emphasized that Congress must act before September 27 – the deadline for insurance companies to sign contracts with the federal government to sell insurance through HealthCare.gov this fall for the 2018 plan year. Moreover, anything tied to the ACA remains politically volatile.
Tax reform is another issue to keep an eye on this quarter. In addition to being of great interest to many health care stakeholders as taxpayers, it might also be a vehicle to address health care policy.
63: The total number of US counties that don’t have at least one health plan offering coverage through an insurance exchange during the upcoming open-enrollment period.2
Last week, one health plan announced it would no longer offer products in 63 counties and cities in Virginia, leaving those areas without any options on the exchange. This happened in several other states over the summer, but in the end, insurance commissioners and health plans worked hard to ensure that eligible people will be able to purchase health coverage through an exchange regardless of where they live. It is unclear how the counties in Virginia will fare for now. And, despite the availability of coverage in most of the country, premiums around the country are expected to rise to reflect the health care cost trend as well as the uncertainty surrounding the exchanges.
$194 billion: According to the Congressional Budget Office (CBO), annual federal spending will increase by $194 billion if the administration stops cost-sharing reduction (CSRs) payments.3
One question as we head into fall is whether the administration will continue to pay health plans to reduce cost sharing for low-income beneficiaries. This question continues to add uncertainty to health plans, insurance commissioners, and consumers who buy coverage through the exchanges. If the government opts to end CSR payments, many carriers have said they will have to increase premiums. Higher rates would translate to larger federal premium subsidies, which are based on the cost of coverage. The administration has paid the CSR payments every month to date.
I am looking forward to reading a potential Request for Information from the US Centers for Medicare and Medicaid Services (CMS) on the overall direction the Center for Medicare and Medicaid Innovation (CMMI) will take. I will also be interested in reading the responses. CMMI has been the hub for much of the agency’s work on alternative payment models, and is closely tied to the implementation of the Medicare Access and CHIP Reauthorization Act (MACRA). Some industry observers have urged the agency to keep pressure on value-based payment models in Medicare, even as some provider organizations support a gradual transition to many of the MACRA provisions.
As part of larger efforts to support the president’s priority, CMS is working actively with all stakeholders – including state officials – on innovative payment arrangements. These arrangements could, for example, include outcome-based pricing for medicines in relation to clinical outcomes. CMS plans to issue future guidance to explain how pharmaceutical manufacturers can engage in innovative payment arrangements, and plans to continue to work with states on other options, as well as help them manage the cost of new therapies and cures.
I am also keeping an eye out for information outlining the administration’s ideas for reducing drug prices or making information about pricing more transparent. This includes watching US Food and Drug Administration (FDA) Commissioner Scott Gottlieb’s next steps around creating a more competitive market for drugs, accelerating the approval process, and implementing 21st Century Cures – including its provisions around real-world evidence and consumer input into the drug approval process.
A good bit of writing took place over the summer, and we expect it could continue. States have been writing and submitting waivers that, if approved, will allow them to tinker with Medicaid and ACA requirements. Section 1332 of the ACA allows a state to apply for a State Innovation Waiver “to pursue innovative strategies for providing their residents with access to high-quality, affordable health insurance while retaining the basic protections of the ACA.”2 CMS approved Hawaii’s waiver late last year. Iowa’s recently submitted waiver request seeks to offer just one plan in the individual market and set a flat premium subsidy payment based on income and age. It also would eliminate CSR payments to insurers and would instead establish a reinsurance program (see the August 29, 2017 Health Care Current). If that waiver is approved, other states are likely to follow.
Many states also have been busy developing policies to address high-risk individuals who buy coverage through an exchange. Some states contend that pulling these members out of the risk pool will bring premium costs down and add a measure of stability to this market. Some states also have been exploring innovation waivers to reshape the structure of subsidies and enrollees.
Even though the Congress did not act to make major changes to Medicaid, some states want to experiment with their programs (see the August 29, 2017 Health Care Current). Section 1115 of the Social Security Act gives the US Department of Health and Human Services (HHS) authority to approve experimental projects and demonstrations that promote the objectives of Medicaid and CHIP. Some states want to test whether it is acceptable to scale back (but not altogether eliminate) Medicaid expansion. Other states want to add employment and other requirements as a condition of Medicaid eligibility. Stay tuned this fall to see if the federal government approves them.
Watch this space as this new school year unfolds. We will keep you up to speed with the latest developments on the Hill, in the administration, and the courts, and – as states take a stronger role – around the country.
2 2018 projected health insurance exchange coverage map, the Center for Consumer Informationl & Insurance Oversight, www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Marketplaces/2018-Projected-Health-Insurance-Exchange-Coverage-Maps.html