Independent Health is closely following efforts by the Trump Administration and Congress to repeal and replace the Affordable Care Act (ACA), a process that involves a three-pronged approach: reconciliation legislation through the proposed American Health Care Act; administrative action, and additional legislation outside of the reconciliation bill.

We provide this latest overview in our occasional series of ACA updates.

June 19, 2017 Update:
Reconciliation Update: Discussions Continue on the American Health Care Act (AHCA)

The American Health Care Act (AHCA), which passed in the House as a budget reconciliation bill, had been under review by the Senate Parliamentarian to make sure it complied with a Senate rule known as the Byrd Rule, to which all budget reconciliation bills must comply. The Senate Parliamentarian, who is the official advisor to the Senate on interpretation of Senate rules, determined that the AHCA indeed complies with the Byrd rule, and can be considered during the reconciliation process.

The AHCA has since been delivered to the Senate budget committee, and is now on the Senate calendar, a significant step because the AHCA is available as a legislative vehicle that Senate leaders can use when they are ready to proceed with their own bill to repeal and replace the ACA.

Some senators have suggested the Senate may vote on a health reform bill before the end of its July 4th recess. However, before a vote, the Senators must make progress on several fronts, including:

  • Making final decisions on several highly contentious issues;
  • Drafting legislative language;
  • Obtaining a Congressional Budget Office cost estimate on its own bill;
  • Garnering support from 50 senators.

Administrative Activity: CMS Request for Information
The Centers for Medicare and Medicaid Services (CMS) issued a request for information (RFI) on reducing regulatory burdens related to the Affordable Care Act. The RFI requests suggestions that can further these goals for the individual and small group markets, including suggestions regarding:

  • Empowering patients and promoting consumer choice; and
  • Stabilizing the individual, small group and non-traditional health insurance markets; and
  • Enhancing affordability; and
  • Affirming the traditional regulatory authority of the states.

New Legislation: New Health Bills to Advance Health Reform
The House is planning to vote this week on several health-related bills. It is important to note that if passed, these bills would not go into effect until the AHCA was passed. Details of the bills are below:

  • The “Broader Options for Americans Act” (H.R. 2579) would include unsubsidized COBRA continuation coverage in the AHCA’s definition of a qualified health plan in determining eligibility for the new premium tax credit that would be established under this legislation.
  • The “Verify First Act” (H.R. 2581) would prohibit advance payments to individuals of the ACA’s premium tax credits – and also of the AHCA’s premium tax credits – unless the individual’s citizenship or immigration status has been verified.
  • The “Protecting Access to Care Act” (H.R. 1215) proposes medical liability reforms that would apply to lawsuits against health care providers. Specific provisions of the bill would place a $250,000 cap on non-economic damages, limit attorneys’ contingency fees, limit the number of years a plaintiff can wait before filing a health care liability action, and limit a party’s liability to its degree of fault.

For additional information on the ACA, check out Independent Health’s website for our ongoing series of updates, listed by date. In addition, click here for a helpful summary of the key provisions of the proposed American Health Care Act

NYS Emergency Regulation: Risk Adjustment Change
Claim-based risk adjustment mechanisms have been used extensively in the health insurance industry for over two decades. At the federal level, risk adjustment programs have been used for Medicare Advantage, Medicaid, and now in the Commercial ACA markets.

The risk adjustment program was created to help level the playing field among insurers and promote competition based on quality and efficiency.

The risk adjustment program allows for the transfer of funds within a state from plans with a healthier and less costly membership to plans with a less healthy or sicker membership in order to subsidize the premium rates so they can cover the claim costs of the high risk members. Plans with costlier membership, including Independent Health, rely on this fund transfer to keep their plan premiums affordable to small groups and individual subscribers.

Earlier this year the New York State Department of Financial Services issued an emergency regulation to modify risk adjustment results in the state’s ACA marketplaces. This regulation reduced the amount plans either pay into or receive from the risk pool by 30 percent. Rather than building a stronger foundation for marketplace stability, this emergency regulation moves us further from the goals of risk adjustment.

While the challenge of rising medical costs continues to impact health insurance rates, the unexpected change in the risk adjustment calculation has exacerbated the situation, which has resulted in plans’ proposed rate requests for 2018 for small groups and individuals.

Despite these challenges, Independent Health will continue to offer the greatest level of coverage and value through our comprehensive provider network, as well as a variety of unique benefits, tools, and programs, including our FitWorks® Rewards online wellness program, our nutrition and gym benefits, and our telemedicine benefit provided through Teladoc®. We also remain steadfast in our commitment to provide our customers with the high-quality service they deserve and help make it easier for them to take charge of their overall health and well-being.