Health Reform WK-EDGE Top 5 health reform themes of 2017
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Monday, December 11, 2017

Top 5 health reform themes of 2017

By Kelly J. Rooney, J.D., M.P.H.

Donald Trump’s campaign for president focused on razing the Patient Protection and Affordable Care Act (ACA) and he proposed in his "100-day action plan to Make America Great Again" the Repeal and Replace Obamacare Act. Yet as his first year in the Oval Office draws to a close, only small dents have been made in the health care reform law. This Strategic Perspective provides an overview of key health reform themes that dominated the landscape in 2017.

1. Trump’s executive orders and follow-through (or lack thereof) on promises

Trump hit the ground running on Inauguration Day. His first executive order (E.O.) signaled the intention to seek a "prompt repeal" of the ACA and directed agencies to halt implementation of ACA provisions that would result in fiscal or regulatory burdens (see Trump Administration previews health care plans with Executive Order, regulatory freeze, January 25, 2017). Since then, two other E.O.s specifically took aim at the ACA. In May, Trump signed an E.O. related to "conscience-based objections" regarding the preventive care mandate regulations (providing contraceptive coverage). In October, another E.O. had three targets: (1) access to association health plans (AHPs), potentially across state lines; (2) short-term limited duration insurance (STLDI); and (3) changes, and possible expansion, to health reimbursement arrangements (HRAs) (see Trump suggests regulatory changes, possibly undermining ACA protections & market stability, October 18, 2017). Although the E.O.s were or are a sign of things to come, they cannot be used to repeal standing law (only legislation can do that).

After months of speculation about whether Trump would maintain cost-sharing reduction (CSR) payments and years of litigation surrounding their legality, the Trump Administration announced that CSR payments to insurance companies participating in the ACA’s exchanges would end because Congress made no appropriation for them (see Trump terminates CSR payments, October 18, 2017).

2. Other actions by the Executive Branch

Agency heads, particularly HHS, followed up on E.O.s and other ACA requirements. Additional religious and moral exemptions to the contraception mandate were provided through two HHS interim Final rules. One expanded the exemption for entities with religious beliefs from providing contraceptive/abortifacient services, and the other exempted organizations and small businesses with moral convictions not based on religious beliefs from providing them (see New regulations provide opportunity for moral objection to contraceptive coverage, October 18, 2017).

To stabilize the individual insurance market, a Final rule was issued: (1) changing the end date for open enrollment—starting November 1—from January 31 to December 15; (2) requiring 100 percent of new special enrollment period consumers in states using HealthCare.gov to undergo pre-enrollment verification; (3) allowing insurers to collect unpaid premiums for prior coverage efore enrolling consumers in a new plan year; and (4) revising actuarial values, used to determine metal levels of coverage, to allow for greater variation and flexibility in designing new plans (see HHS finalizes rule to improve marketplace stability, April 19, 2017). Also, a Proposed rule for 2019 benefit and payment parameters would give state a larger role in administering individual and small group exchanges, such as defining essential health benefits, operating a small business health options program (SHOP) exchange, and certifying qualified health plans (see 2019 ACA proposal would enhance states’ role, grant flexibility, November 1, 2017).

3. Will they or won’t they? Congress’s attempts to repeal the ACA

On the heels of Trump’s campaign promise to repeal the ACA and his subsequent E.O. to that effect, the GOP-controlled Congress has made various attempts to deliver.

First came the American Health Care Act (AHCA) which passed by the House in May and sought to eliminate or change contentious provisions like the individual mandate, Medicaid expansion, and ACA taxes, but the Congressional Budget Office (CBO) subsequently determined 23 million additional people would be uninsured as a result (see Republicans present health reform that is neither repeal nor replacement, March 7, 2017; AHCA amendments won’t save coverage for 23M or lower premiums for unhealthy Americans, May 25, 2017).

Next was the Senate Republican’s Better Care Reconciliation Bill (BCRA) which would end the individual and employer mandates and the small business tax credit in 2019. Majority Leader Mitch McConnell (R-Ky) removed the bill from consideration instead pushing the Obamacare Repeal Reconciliation Act of 2017 (ORRA), but both bills received unfavorable CBO in terms of uninsured estimates (see Senate Republicans release discussion draft of "Better Care" health bill, June 28, 2017; BCRA would curb Medicaid spending growth, increased uninsured numbers, June 30, 2017; BCRA may be gone, but AHCA, ACA repeal efforts continue, July 18, 2017). Then a "skinny repeal" bill was offered, proposing in part to eliminate the individual mandate penalties. That bill failed in a 49-to-51 Senate vote (see McCain’s thumbs down vote defeats ACA ‘skinny bill’ repeal, July 28, 2017). Another failed attempt was the Graham-Cassidy bill, which would replace certain federal subsidies with block grants, but the sponsors lacked votes following the CBO’s analysis (see Graham-Cassidy would reduce coverage by millions to reduce deficit, September 27, 2017).

The remaining viable option, due to its inclusion in the tax reform overhaul bill, is the Alexander-Murray bill, a bipartisan deal to fund CSR payments for two years and stabilize the individual marketplace while expanding Section 1332 state innovation waivers (see Bipartisan ACA deal announced, October 18, 2017). The bill, passed by the Senate on December 2 and yet to be reconciled with the House version, would repeal the individual mandate reducing the federal budget deficits by approximately $318 billion over 10 years, but overall would add $1.414 trillion to the deficit, according to the CBO (see Significant deficit reduction would come from elimination of individual mandate penalty, November 28, 2017).

4. Meanwhile in the Judicial Branch…

A number of ACA issues are working their way through the courts.

CSR payments. Litigation has been ongoing for years over the legality of CSR payments, with the GOP claiming they were illegal. Summary judgment was granted to the House in House v. Burwell (now Hargan), but appeal was held in abeyance while the new administration got settled. A number of state attorneys general were granted leave to intervene but the matter is currently stayed. Following Trump’s announcement ending CSR payments, however, California and 17 other states requested an emergency ruling requiring payments to continue. The request was denied by the Northern District of California finding that the administration’s argument was stronger (see Court denied states’ request to require Trump to continue CSR payments, November 1, 2017).

Risk corridor payments. Litigation is also plentiful regarding the risk corridors program and annual payments promised to insurers to negate claims cost uncertainty during early years of the exchanges. Insurers have only seen a fraction of the payments owed under the program and continue to file suit against the government (see When will insurers receive risk corridor payments?, February 15, 2017). The Center for Consumer Information and Insurance Oversight (CCIIO) issued a memo saying collections under the program in 2015 were insufficient to make 2014 payments in full, so HHS will use 2016 collections to pay 2014 balances (see And the debt goes on: 2016 risk corridor collections will pay 2014 balances, November 15, 2017).

Biosimilars. The ACA passed the Biologics Price Competition and Innovation Act of 2009 (BPCIA) which streamlined the FDA biosimilar approval process. A dispute between Amgen and Sandoz resulted in litigation over the notice required and timing of notice from the biosimilar manufacturer to the sponsor manufacturer. In June, the Supreme Court decided that the biosimilar manufacturer need not wait for FDA approval before providing notice to the sponsor (see BPCIA’s patent-dance rules clarified; notice allowed before FDA license received, June 14, 2017).

Contraceptive mandate. The new contraceptive mandate rules allow for more exceptions—now for moral reasons—to the ACA requirement. There have been a number of legal challenges brought against the rules (see Five more states join legal fight against expanded exemptions, November 8, 2017).

340B. Following the OPPS 2018 Final rule cutting reimbursement to covered facilities under the 340B program, the American Hospital Association filed suit against HHS, alleging the cuts threaten hospitals’ ability to provide care to communities and violate the Social Security Act and the purpose and design of the program (see AHA makes good on threats to sue over 340B cuts, November 15, 2017).

5. A look ahead

A cloud of uncertainty looms over the future of the ACA and many of the law’s most notable provisions as Trump and the GOP have made it clear that fight to repeal and replace the ACA is far from over. In the meantime, however, the ACA remains the law of the land. Courts are still deciding on a number of ACA-related issues that may affect the sustainability to the law’s provisions and actions taken by the government under the new administration. Efforts to stabilize the insurance market are playing out, and proposed updates to the benefit and payment parameters would not apply until 2019, if finalized. Despite shortened enrollment period and reduced marketing efforts, as of December 6, 3,604,440 people have selected Obamacare marketplace plans on HealthCare.gov.

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