People with Type 1 diabetes are among the most vulnerable to coverage changes outlined in the American Health Care Act.
Americans with chronic health diseases such as type 1 diabetes (T1D) are at increased risk from any healthcare legislation that alters how health plans currently handle pre-existing conditions, according to a warning issued by JDRF, a nonprofit organization that funds diabetes research.
JDRF is on record opposing the American Health Care Act (AHCA), the House Republicans' effort at reforming the Affordable Care Act. The nonprofit says the bill would jeopardize the insurance coverage of 1.25 million Americans with T1D.
JDRF was joined by 10 organizations in opposing the bill and any other healthcare reform effort that would endanger the insurance coverage of people with chronic diseases.
Republican Senators are working on their own version of a healthcare reform bill that would have to be reconciled with the House bill, which was dead on arrival in the Senate. Senate Majority leader Mitch McConnell (R-KY) has reportedly told President Trump that the Senate could vote on healthcare legislation by July 4.
Negotiations on the Hill should include careful consideration of what reform would do Americans with chronic diseases, says JDRF Chief Mission Officer Aaron Kowalski, MD.
TD is a life-threatening autoimmune disease that strikes both children and adults. Managing T1D over a lifetime, including paying for the daily insulin needed to live, is expensive and requires 24/7 vigilance and regular doctor appointments to avoid life-threatening medical emergencies and long-term complications such as blindness and kidney failure, Kowalski says.
As access to quality care becomes more expensive, the health of people with T1D suffers, he says, so AHCA-type changes in coverage for pre-existing conditions would be problematic.
"We see this as a step backwards. People with Type 1 diabetes are very vulnerable to increases in the cost of treatments that sustain their lives," Kowalski says. "To be discriminated upon by pre-existing conditions like diabetes is unacceptable to us. We are letting Congress know that we need to preserve the protections that exist currently and not take them away."
JDRF established four principles that a healthcare reform bill would need to meet in order to protect the health of people with T1D and other chronic conditions:
Preserve protections for those with pre-existing conditions: Individuals with pre-existing health conditions should have access to comprehensive health insurance at rates similar to their counterparts without pre-existing health conditions.
Allow young adults to stay on their parent's insurance until the age of 26: Young adults should be allowed to stay on their parents' health insurance plan until the age of 26.
Prohibit yearly and lifetime dollar limits for essential health benefits: Insurance companies should not be allowed to set annual or lifetime dollar limits on their spending for an individual's covered benefits.
Close the donut hole in Medicare Part D: Provisions should remain in place to close the Medicare coverage gap for prescription medicines, known as the "donut hole," by 2020, which will help Medicare beneficiaries afford insulin and other needed drugs.
"We're looking for legislation that ensures people with Type 1 diabetes are protected and have access to affordable healthcare," Kowalski says.
"Type 1 diabetes is 100% fatal without insulin; people with this disease cannot just stop taking insulin when they can't afford it. If you don't have affordable access to a lifesaving drug, that is just not acceptable when our country is trying to develop a healthcare insurance model that is fair and sustainable."
Two large healthcare plans in Florida will pay millions to settle allegations triggered by a whistleblower's complaint that they gamed the Medicare and Medicaid systems by providing inaccurate risk scores for reimbursement.
Two large health insurers based in Tampa, FL, are paying $32.5 million to resolve a federal and state investigation into claims they defrauded Medicare and Medicaid by submitting risk adjustment scores that improperly inflated their reimbursements.
The settlement is the largest ever for risk adjustment fraud. The allegations were made by a physician who took his concerns to state and federal investigators.
The late Darren D. Sewell, MD, aided the United States government and the State of Florida in their case against Freedom Health and Optimum Healthcare, his attorneys from the San Francisco law firm Constantine Cannon reported. Both health plans are controlled by Kiranbhai C. Patel, MD, and Siddhartha Pagidipati, MD, Freedom's former chief operating officer.
The whistleblower complaint, which was unsealed recently, alleges that Freedom and Optimum improperly gamed the risk adjustment feature of the Medicare Advantage program, also known as risk scoring, which allows Medicare to make additional payments to managed-care plans based on the plan members' health-risk scores. The health-risk scores are calculated using patients' medical diagnoses.
Higher risk scores should reflect treatment of sicker patients, resulting in higher reimbursement to offset increased costs associated with treating these patients. Freedom and Optimum fraudulently inflated their members' risk scores and the corresponding risk adjustment payments they received from CMS, the complaint alleges, by claiming their members were treated for conditions they either did not have or for which they were not treated.
The complaint also alleges that Freedom and Optimum fraudulently induced the Centers for Medicare & Medicaid Services to allow them to expand their health insurance offerings into new counties in Florida and the Carolinas by falsely representing that they had a sufficient network of doctors, clinics, and hospitals available to serve their enrollees in the expanded service area when they had no such networks in place.
The Department of Justice announced a settlement agreement in which Freedom Health and Optimum Healthcare will pay the government $16.7 million to resolve the allegations of risk adjustment fraud and $15 million for the allegedly fraudulent expansion of their service areas, for a total settlement amount of $31.7 million.
In addition, Pagidipati will pay the United States $750,000 to resolve allegations regarding his role in the allegedly fraudulent expansion of Freedom's and Optimum's service areas.
Sewell, the whistleblower, worked at Freedom and Optimum from 2007 to 2012 and rose through the ranks to become chief medical officer before transferring to the Medicare Revenue Management Department and assuming the role of vice president of special projects. His attorneys say that through his various roles Sewell became familiar with the defendants' schemes to bilk money from Medicare and Medicaid.
He filed his whistleblower lawsuit in 2009 and played an important part in the FBI's undercover investigation. Sewell's estate will receive a portion of the money recovered in the settlement, but the DOJ says the amount has not been determined.
Insurers are finding it difficult to set premiums and plan for the future when key elements of healthcare reform are still up in the air. They are most concerned over subsidies for low income consumers and changes in how Medicaid is funded.
Health plans are struggling to plan for 2018 and the years ahead because of the uncertainty over subsidies for low income consumers and the funding structure for Medicaid, says the CEO of the largest publicly operated health plan in the United States.
That kind of uncertainty is never good for business or for consumers, he says.
Questions over how Congress will reform the Affordable Care Act have left insurers in limbo, says CEO John Baackes of L.A. Care, which recently hit the 2 million Medi-Cal member mark and is the only publicly operated health plan in the state of California to have a product on the exchange.
President Trump suggested that Republican efforts at healthcare reform might not include a continuation of the subsidies that allow insurers to provide coverage at a low price for very low income consumers, and there was no appropriation for those funds in the continuing resolution passed April 28.
"For those of us in the individual market through the exchanges, we're sitting here trying to decide what our rates are going to be in 2018 and whether the subsidies will affect our rating decisions. With Congress not acting and the president not being clearer, that's doing way more damage to the future of the exchanges than anything that is in the Affordable Care Act," Baackes says.
"We have no clue as to whether the subsidies are going to be continued or not. The speaker of the House says yes, the president says yes, but there's no appropriation in Congress to get the money. The indecision in the individual market is way more concerning than any debate over pre-existing conditions and other issues."
In California, the state has asked plans to submit two rates for 2018, one that assumes the subsidies will continue, and one that assumes they will not. L.A. Care's premiums will increase by a single digit if the subsidies continue, but the health plan is still determining what the increase would be without them, Baackes says.
On top of the subsidies question, health plans are bracing for however Congress ends up changing Medicare, Baackes says. All signs point to a fundamental change in the way Medicaid has been funded for 52 years, he says.
"They're changing the agreement that the federal government made with states when they got them into Medicaid, proposing to throw that out and determine a dollar amount through a formula and then pay 50% of that," he says.
"That's a huge fundamental change that goes way beyond the Affordable Care Act and it's getting no attention. But those of us who are in it say that's the real sleeper issue here that could have a raft of unintended consequences."
That concern stems from how the House bill would require states to redetermine Medicaid eligibility for millions of beneficiaries every six months, a change from the current 12-month eligibility redetermination process.
About 700,000 of L.A. Care's 2.1 million customers came through the Medicaid expansion in the Affordable Care Act, Baackes notes, and every redetermination results in some beneficiaries temporarily losing coverage because of missed deadlines or other factors. The House reform bill calls for the federal government's portion of Medicaid funding to drop from 90% to 50% for those expansion enrollees who are uninsured for more than 30 days.
"The Congressional Budget Office said that in two years two-thirds of the people would be dropped to that lower level of reimbursement. That's another huge transfer of costs to the states," Baackes says.
"We know that will be a significant burden to the states that have to make up the difference, and those of us in the in Medicaid business are wondering what we can expect. It's a huge uncertainty when you're planning for the future."
Health plans would lose revenue by lowering premiums, but they would make it up with lower utilization costs.
Changing the way federal healthcare law addresses pre-existing conditions should result in lower premiums, but not necessarily any improvement in the other cost that has consumers frustrated – the high deductibles.
If the Republicans' American Health Care Act (AHCA) or any other bill allowing insurers to charge more for people with pre-existing conditions is passed, insurers would likely begin offering barebones policies with low, or at least lower, premiums beginning in 2019, says Dan Ehlke, assistant professor of health policy and management at SUNY-Downstate School of Public Health.
However, those policies still would come with high deductibles because insurers will still be focused on limiting utilization costs, he says.
The AHCA preserves the existing federal law stating that no one can be denied coverage for a preexisting condition, but states could apply for a waiver from the Obamacare provision prohibiting medical underwriting, which includes factoring in pre-existing conditions to determine the cost of insurance.
States would have to prove that the waiver would improve their insurance markets, and would have to provide additional protection for consumers in the form of high-risk pools to ensure subsidized funding to pay for premiums.
Consumers still would be shielded from medical underwriting if they receive coverage through an employer, and on the individual market as long as they do not have a gap in coverage of 63 or more consecutive days in the prior year.
If they do, and they have pre-existing conditions like cancer or diabetes, then insurers could charge them higher premiums for a year.
"Premiums for younger, healthier Americans could well fall, though many of these same individuals would be receiving less in the way of tax credit subsidies to help them cover the cost of those premiums," Ehlke says.
"Insurers could profit quite nicely, as they'll be incentivized to offer plans with little real coverage to healthier Americans, while shunting the less healthy into high risk pools. On the other hand, without an effective mandate or penalty, at least some younger individuals will opt to go without coverage."
The penalties for interruptions in coverage may not be enough to prevent young people from dropping coverage, he says.
The larger insurers seem to have remained on the sidelines thus far, though they have expressed displeasure with some Obamacare requirements, Ehlke says, and thus seem to be tacitly supporting efforts to change pre-existing condition law. The prospects for the AHCA are dismal in the Senate, where Republicans are devising their own healthcare reform.
"If this version does not survive the Senate, those with pre-existing conditions will be in much better shape, remaining able to afford insurance coverage," Ehlke says.
"Under the AHCA, if they lived in states receiving a waiver, insurance companies could dramatically increase the price of coverage for those with pre-existing conditions, in addition to offering skimpier policies that may not even cover a large range of conditions."
Being able to exclude pre-existing conditions would actually reduce revenues for health plans, notes Ron Howrigon, president of the consulting firm Fulcrum Strategies and formerly a senior manager with Kaiser Permanente, Cigna, and Blue Cross Blue Shield.
"This is not a strategy to increase revenues but rather to reduce expenses by allowing insurance companies to deny paying for those services," Howrigon says. "All the big health plans would like to see this bill pass, as it will limit their risk and exposure."
A group representing emergency room physicians says the list of approved medical diagnoses developed by Anthem Blue Cross Blue Shield violates the "prudent layperson" requirement of the Affordable Care Act.
The list of what diagnoses will be covered in emergency departments by Anthem Blue Cross Blue Shield (Anthem BCBS), is a clear violation of the national prudent layperson standard, according to The American College of Emergency Physicians (ACEP).
The prudent layperson standard is codified in federal law, including the Patient protection and Affordable Care Act, and it is also found in more than 30 states. It requires that insurance coverage be based on a patient's symptoms rather than the final diagnosis.
In a statement released jointly with its Missouri chapter, which is facing enforcement of the BCBS list soon, ACEP said anyone who seeks emergency care suffering from symptoms that appear to be an emergency, such as chest pain, should not be denied coverage if the final diagnosis does not turn out to be an emergency.
The standard also prohibits insurance companies from requiring patients to seek prior authorization before seeking emergency care, ACEP President Rebecca Parker, MD, FACEP, noted.
"Health plans have a long history of not paying for emergency care," she said.
"For years, they have denied claims based on final diagnoses instead of symptoms. Emergency physicians successfully fought back against these policies, which are now part of federal law. Now, as healthcare reforms are being debated again, insurance companies are trying to reintroduce this practice."
Nearly 2,000 diagnoses on the list are classified as non-urgent by BCBS and would not be covered if the patient goes to the emergency department. ACEP says some of these "non-urgent" and non-reimbursed diagnoses can be symptoms of medical emergencies, citing these examples:
"Chest pain on breathing" can be a life-threatening pulmonary embolism.
"Acute conjunctivitis," if caused by gonorrhea, can cause blindness.
"Influenza," which has killed hundreds of thousands of people over the past century, can be an emergency. Thousands of people die from the flu each year.
Missouri emergency physicians are particularly concerned because Anthem BCBS plans to enforce this policy there this summer, said Jonathan Heidt, MD, MHA, FACEP, president of Missouri's ACEP Chapter.
The company has already put this practice into place in Virginia and Kentucky and may try to enforce it in other states, most likely Indiana and Ohio, he said.
"This policy threatens the citizens of Missouri," Heidt said. "If this practice of denying emergency care can happen in our state, it can happen in any state and we must work both locally and nationally to fight for our patients'' rights to have access to emergency care as protected by the 'prudent layperson' standard."
Parker noted that research shows patient perceptions of urgency are what contribute most to emergency department use, and the Anthem BCBS list could discourage people from seeking lifesaving care.
Prudent Layperson Standard
"When privately insured people have an urgent medical problem and cannot access their usual physicians as quickly as they believe necessary, they frequently will go to hospital emergency departments," Parker said.
"At the same time, patients may minimize their symptoms. In fact, nearly one in four Americans responding to a poll reported that their medical conditions got worse after they delayed visiting an emergency department because they feared their health insurance companies would not cover the costs."
Patients cannot be expected to self-diagnose their medical conditions, which is why the "prudent layperson" standard was created and must also be included in any replacement legislation of the Affordable Care Act, ACEP said. The vast majority of emergency patients seek care appropriately, according to the CDC and often times should have come to the ER sooner, Parker noted.
"If patients think they have the symptoms of a medical emergency, they should seek emergency care immediately and have confidence that the visit will be covered by their insurance," Parker said.
The AHCA would eliminate essential benefits in favor of letting each state decide, but why reinvent the wheel? Oregon has already developed a system that works.
It's time to get serious about assessing the value of health services, says a former health plan executive, and Oregon is a good place to look for a structure that works.,
The American Health Care Act (AHCA) or a new reform bill should replace the Affordable Care Act's 10 Essential Health Benefit (EHB) categories with evidence-based basic health services that deliver the best possible care and value, says Archelle Georgiou, MD.
Between 1995 and 2007, she was a senior executive and chief medical officer of UnitedHealthcare, where she dismantled many of the company's legacy policies in order to minimize the bureaucratic hassles imposed on patients and physicians.
For policies sold to individuals and employers with 50 or fewer employees, the ACA requires health plans to include 10 EHBs:
Emergency services
Habilitative and rehabilitative services
Inpatient care
Outpatient care
Maternity and newborn care
Mental health and addiction treatment
Lab tests
Preventive care
Prescriptions
Pediatric services, including oral and vision care
Plans sold to larger employers are exempt from the requirement, but if they cover any EHBs, the health plan cannot have lifetime or annual limits for that care.
Potential for Chaos
The Republican bill would eliminate the ACA's mandate on EHBs, allowing states to determine what health plans must cover. Not the right move, Georgiou says.
"That would mean we have 50 different legislatures determining independently what basic services are needed by a population, but the biology and the needs of people don't vary that much across the country. Why are we figuring this out 50 times?" she says.
"The risk is that states are going to be influenced by lobbying, lack of knowledge, and then you have situations where people in Minnesota don't have some type of care that people in Wisconsin get. What kind of effect will that have on people deciding where to live and work?"
The notion of allowing states to decide runs counter to what the healthcare community knows about population health and evidence-based care, Georgiou says.
She cites Oregon as a state already taking the right approach, one that she says could be implemented nationwide rather than having other states reinvent the wheel, and make some wobbly wheels in the process.
Oregon's Health Evidence Review Commission (HERC) determines what healthcare services will be covered by the Oregon Health Plan, which operates under a Medicaid waiver granted in 1993.
An Evidence-Based Strategy
The 13 members of the HERC consists are mostly healthcare professionals. Each year they prioritize several hundred treatments using a formula that considers the impact on healthy life years, suffering, population health, and other factors. The HERC uses the annual state budget to determine the cut off point for which services will be covered by the health plan.
The prioritized list currently has 665 items. Coverage is provided for items 1 (pregnancy) through 475 (repair for acquired ptosis and other eyelid disorders with vision impairment) but not for items 476 (medical and surgical treatment for keratoconjunctivitis) through 665 (evaluation for miscellaneous conditions with no or minimally effective treatments or no treatment necessary).
The same concept can be applied on the federal level, she says, to establish which essential benefits health plans would be required to cover.
"I'm concerned with the current version of the AHCA because a lot of what it is trying to do is not based on evidence. It's based on politics, and that is not the right way to determine what healthcare benefits are the most essential and worthwhile," she says.
"The current essential benefits may not be the best answer, but neither is deferring to 50 states to determine something that should be uniform for all consumers. The rationale behind evidence-based care doesn't change just because you crossed a state border."
The Republican bill to retool the Affordable Care Act may stall in the Senate, where legislators have different concerns than their House peers.
It took Republicans almost two months to cajole their own representatives into voting for the party's plan to gut Obamacare, but getting the bill passed in the Senate could be far more challenging.
Senators are going to look almost exclusively at the Medicaid provisions, one analyst says, and they already don't like what they see.
The bill passed the House last Thursday by a vote of 217 to 213, with just one more "yes" vote than needed. All 193 voting Democrats and 20 Republicans opposed the bill.
The American Health Care Act (AHCA) would reform the Affordable Care Act by removing the Obamacare rule requiring most Americans to have health insurance coverage and allowing health plans to impose a 30% premium surcharge for consumers with gaps in coverage.
The AHCA also would end the requirement that plans offer a minimum set of benefits and would allow insurers to charge more for pre-existing conditions if the state has an available alternative such as a high-risk pool.
Proponents of the Republican bill shouldn't celebrate the House passage too much, says Julius W. Hobson Jr., an attorney and healthcare analyst with the Polsinelli law firm in Washington, DC.
"The bill as passed by the House has virtually no chance of passage in the Senate," Hobson says.
"The issue in the House was essential benefits, but the big concern in the Senate is and always has been Medicaid. Leading senators have already expressed concern about the cuts in Medicaid, and given the narrowness of the Republican majority, this is not going anywhere in the Senate."
Under the Republican bill, Medicaid would be cut a total $880 billion over 10 years. Rather than an open-ended revenue stream from Washington, states would receive a set amount of federal funds for each beneficiary. If they agree to accept the funds in a lump sum as a block grant, the federal government would impose fewer requirements.
'Start from Scratch'
"Senate leaders have already said they're not going to take up the House bill and are going to start from scratch if they pass anything at all. That tells you right there that the House bill is not going to become law," Hobson says. "The question is, if the Senate is able to pass a bill and get it through reconciliation with the House, can that bill be passed in the house?"
At that point, the Freedom Caucus could block the bill just as it blocked an earlier version of the Republican bill, Hobson notes. The powerful caucus of conservative and libertarian House members took a hard line on the earlier bill because it did not change the ACA enough, and Hobson says it is likely to see a reconciled bill from the Senate as a watered down version of the bill just passed.
"Whatever comes out of the Senate will be more liberal than what the House just voted for, and that one just got by with the bare minimum of support needed," Hobson says.
"For legislation that affects one-sixth of the nation's economy, you can't do that on one side of the aisle. You almost always end up with something that one side, or both sides, think will still need to be fixed at some point."
AARP and the Catholic Health Association are urging Congress not to approve the modified American Health Care Act. The current bill would throw millions of people off insurance rolls and hit older Americans disproportionately, they say.
Two powerful healthcare industry groups are chiming in on the future of the American Health Care Act, and neither is cheering for the bill's passage. At least not in its current form.
AARP Executive Vice President Nancy LeaMond issued a statement saying the amended House bill would create an "Age Tax," increase premiums, eliminate protections for pre-existing conditions, cut the life of Medicare, and give sweetheart deals to big drug and insurance companies. House leaders are likely to pay attention to the comments, as the group has nearly 38 million members and is one of the most powerful lobbying groups in the country.
In a letter sent to all 435 members of the U.S. House of Representatives, AARP restated its strong opposition to the bill, saying the legislation will have a significant harmful impact on the health of millions of older Americans ages 50 to 64, as well as other vulnerable groups, including poor seniors and disabled children and adults.
"This harmful legislation still puts an Age Tax on older Americans and puts vulnerable populations at risk through a series of backdoor deals that attempts to shift responsibility to states. Older Americans need affordable health care services and prescriptions," the letter says. "This legislation still goes in the opposite direction, increasing insurance premiums for older Americans and not doing anything to lower drug costs."
The AARP president promised to let the group's members know how their Representative votes on the bill in its newsletters, publications, on social media and in other formats.
The Catholic Health Association (CHA) also is critical of the House bill, saying the legislation to repeal and replace the Affordable Care Act would significantly undermine access to healthcare for many who desperately need it.
CHA issued a statement referring to an analysis by the Congressional Budget Office and the Joint Committee on Taxation showing that in the first year under the legislation 14 million people who had just gotten health insurance would lose it, and approximately 10 million more would lose their coverage in later years.
CHA is the nation's largest group of not-for-profit health systems and facilities.
"The recent amendments to the bill, intended to make it more palatable to those who did not support it initially, are even more disastrous for people who have just gotten healthcare," the CHA statement says.
"Changing the current rules to undermine essential benefits requirements and protections for people with pre-existing conditions, as well as allowing insurers to set annual and lifetime caps on the care they cover, would seriously undermine health security and leave many individuals with substandard protection. Even the proposed state high-risk pools would be an inadequate and under-funded solution to a problem that need not exist in the first place."
CHA claims the legislation is not really a healthcare bill at all, but instead is intended to "take significant funding allocated by Congress for health care for very low-income people and use that money for tax cuts for some of our wealthiest citizens. This is contrary to the spirit of who we are as a nation, a giant step backward that should be resisted."
Employers seek more flexibility in designing a plan suitable for their employees. The self-insured are not immune, however, from the effects of the healthcare reform debate.
More employers are moving to self-funded healthcare insurance and the trend is likely to continue as they seek health plans that satisfy their employees more than the commercial options currently available under the Affordable Care Act, says an industry insider.
Dissatisfaction with the offerings of commercial health plans is encouraging a steady migration of employers to the self-insurance option, says Mike Ferguson, CEO of the Self-Insurance Institute of America. Rather than paying the insurance company a premium to take the annual risk on the healthcare costs of its employees, the company assumes the risk and pays the bills directly.
"Over the years there has been a slow but steady increase in the number of employers moving to self-funded plans, and the reason for that is that they can better take advantage of some cost saving opportunities and also customize the plans to the needs of their work force," Ferguson says.
Bespoke Insurance
"If they purchase a health plan off the shelf, they get a one-size-fits-all plan, but on a self-funded basis, they get a plan that best suits a particular group."
The proportion of self-insured companies has increased from 28.5% in 1996 to 39% in 2015, according to data from the Employee Benefit Research Institute. The biggest increase was in companies with fewer than 1,000 employees.
The shift to self-insure represents a loss of group market share to the traditional health plans at a time when many are already finding it difficult to succeed with the imbalance of utilization costs and younger, healthier customers on individual plans.
The impact on the insurance giants is not likely to be enough to put anyone out of business, Ferguson says, but it is one more burden on top of many.
If the commercial health plans continue to find the ACA exchanges unworkable, Ferguson says the self-insurance market would not be directly affected and would continue humming quietly in the background. That does not mean, however, that the self-insured have no concerns over the current healthcare reform debate.
"It is good for everybody that we have a well-functioning individual insurance marketplace, and absent any new action or any fixes to the healthcare law, there is a reasonable chance that the individual healthcare insurance market will implode because the health insurers will withdraw from the exchanges," Ferguson explains.
Stop-Loss Insurance
"That will leave fewer options for individuals, and that can lead to a reactionary scenario in Congress where they feel they have to do something. Those actions, whatever they might be, can bleed into the group market like they did nine years ago in the run-up to the Affordable Care Act. We had a relatively large uninsured population and that led to legislative action that ultimately affected the group market also."
Ferguson's group saw some success recently in its push for passage in the U.S. House of Representatives of H.R. 1304, the Self-Insurance Protection Act (SIPA). Sponsored by Dr. Phil Roe (R-TN) SIPA would clarify existing law to ensure that federal regulators cannot re-define stop-loss insurance as traditional "health insurance."
Stop-loss insurance is utilized by most private and public employers with self-insured plans as a financial backstop to reimburse the employer or the plan for catastrophic losses and to protect the plan and plan sponsor from financial insolvency.
Designating stop-loss insurance as a form of health insurance would effectively force these self-insured entities to discontinue their plans, Ferguson says.
The possibility of such a designation arose during the Obama administration. Though it is less likely to happen now, Ferguson says it is important to codify the protection now to head off any similar regulatory threats in the future.
Denying the subsidies would push health plan costs beyond the reach of many low-income consumers, say advocates for very low-income patients.
A group of safety net organizations has sent a letter to Congressional leaders urging them to allocate funds for the cost-sharing reductions (CSRs) that they say are vital to keeping healthcare insurance affordable for the underprivileged.
The plea comes after President Trump suggested he might not continue providing the subsidies that allow insurers to provide coverage at a low price for very low income consumers. Denying the payments would be a strategy for putting pressure on Democrats to negotiate on overhauling or repealing the Affordable Care Act (ACA), the president said.
The ACA requires insurers to reduce certain costs, such as deductibles, co-insurance, and co-payments for low-income enrollees in silver-level plans. To lessen the financial burden on insurers, the federal government then reimburses them directly through CSRs.
The Congressional Budget Office estimates that reimbursements to insurers are estimated to cost $7 billion in 2017 and are projected to top $9 billion in 2018. Democrats and others are pushing for appropriating the funds in the continuing resolution due April 28.
Failure to allocate funds for the CSRs would threaten the healthcare coverage of the approximately 5.9 million people who benefitted from CSRs in the first half of 2016, which amounts to almost 56% of Affordable Care Act marketplace enrollees, the groups say.
The subsidies averaged about $1,000 per person.
The letter was sent by America’s Essential Hospitals, the Association for Community Affiliated Plans, the Association of Clinicians for the Underserved, and the National Association of Community Health Centers.
They claim that denying the CSR payments would cause carriers to drop coverage and premiums to increase, and that federal spending would increase because the government would have to provide more tax credits to Americans for their health plan coverage.
In addition, the groups claim that uncompensated care will increase.
“Many individuals will be unable to afford coverage if premiums rise drastically, leading them to drop coverage altogether,” the letter says.
“The resulting impact is an increase in the uncompensated care burden for hospitals, community health centers, and other safety-net providers in particular. Additionally, many individuals will simply go without needed care.”
In an earlier statement, Margaret A. Murray, CEO of the Association for Community Affiliated Plans, said insurers would be hard pressed to fund coverage for low income Americans on their own.
“Few health plans could sustain unplanned expenses of such magnitude; many would be forced to exit the market if CSR payments were discontinued for an extended period of time; those that remain for Plan Year 2018 would be forced to raise their premiums substantially,” the statement says.
“This uncertainty is a toxic business environment for health insurance plans, and can prove costly to health plans and consumers alike. This issue could readily be resolved with an act of Congress. Its allowance to linger is a choice, and a puzzling one.”
