Senate Majority Leader Mitch McConnell recently gave a candid assessment of the chances of getting an Affordable Care Act (ACA) replacement bill through the Senate, saying “I don’t know how we get to 50 (votes) at the moment.” That succinctly captures the political dilemma. There has long been broad bipartisan agreement that the nation’s health care system was in need of repair. Something had to be done to contain rapidly rising health care costs, increase the quality of medical outcomes, and to expand coverage. But there was little or no bipartisan agreement on how to do it. Indeed, no major health care initiative since Medicare was enacted in 1965 has enjoyed true bipartisan support.
Edward Lenz is a Senior Advisor for the Employment, Labor & Benefits practice in the firm’s Washington DC office. He is one of the nation’s leading authorities on the legal and public policy aspects of employment services and workforce outsourcing. As a member of the American Staffing Association since 1989, he has served as general counsel, senior vice president for legal and public affairs, and senior counsel.
Since the passage of the Affordable Care Act, Ed has also served on the executive committee of Employers for Flexibility in Health Care, testified before Congress on how the law affects businesses and workers, and has represented the staffing industry regarding development of the employer responsibility provisions.
In an effort to make up for a funding shortfall in the Commonwealth of Massachusetts’ Medicaid program, state policymakers have proposed solutions that include a “play-or-pay” option under which employers who fail to offer major medical coverage, or who offer coverage but have low take-up rates, would be required to pay an additional “employer contribution” to the Commonwealth based on multiple factors and complex computations. Another option would make up the shortfall with an across-the-board increase, similar to a payroll tax increase, in the Employer Medical Assistance Contribution (or “EMAC”), which helps defray Medicaid financing.
This post argues in favor of the latter option. We are of the view that an across-the-board increase in EMAC payments, would be vastly preferable because of its simplicity and ease of administration. The “play-or-pay” option would not only be extremely complicated to comply with and enforce, but, as we explain below, it may be preempted by federal law, i.e., the Employee Retirement Income Security Act of 1974 (ERISA).
The stunning failure of the U.S. House of Representatives to pass the American Health Care Act (AHCA) (which we previously reported on here) has political and policy implications that we cannot forecast. Nor is it clear to us whether or when the Trump administration and Congress will make another effort to repeal and replace, or whether Republicans will seek Democratic support in an effort to “repair,” the Affordable Care Act (ACA). And we are similarly unable to predict whether and to what extent the AHCA’s provisions can be achieved through executive rulemaking or policy guidance. The purpose of this post is not to assess why the AHCA failed, or to speculate on the outcome of any future legislative efforts to repeal and replace the ACA, but rather to offer some thoughts about how the AHCA’s failure will impact employers in the near term. As our title suggests, the news may not be all that bad.
On March 6, 2017, after years of promising, GOP lawmakers in the House of Representatives introduced the “American Health Care Act” (AHCA), the first concrete legislative proposal detailing the initial provisions designed to repeal and replace the Affordable Care Act. The bill is a joint effort of the House Energy and Commerce and Ways and Means Committees, and it closely hews to the “Better Way” proposal previously outlined by House Speaker Paul Ryan (which we discussed here.)
The bill currently is the subject of widespread media scrutiny and intense criticism, not only from Democrats, but from Republicans who argue that the bill either goes too far or not far enough. Assuming a bill ultimately passes and is signed into law, it almost certainly will contain significant changes—for example, relating to the timing of the repeal of Medicaid expansion. Nonetheless, we believe the broad contours of any final legislation are likely in place and thus we offer this analysis of the major provisions.
A recent report from the nation’s top actuaries takes a sobering look at the challenges policy makers face in creating a viable individual (i.e., non-group) health insurance market—a critical component of any plan to replace the Affordable Care Act. Published by the American Academy of Actuaries, the report, entitled An Evaluation of the Individual Health Insurance Market and Implications of Potential Changes outlines, without a hint of partisanship, the necessary conditions for a sustainable individual market, examines the extent to which those conditions are currently being satisfied, and discusses the implications of proposed changes to either improve the ACA insurance market reforms or (as is most likely the case) replace them with an alternative approach.
The paper offers an unvarnished explanation of the impact of the relevant actuarial principles that informed the ACA and that must be negotiated in the process of its replacement. Any policy maker hoping to expand (or at least to expand access to) health insurance coverage, control rising health care costs, and increase the quality of medical outcomes—the three goals of the ACA—would be well advised to read this paper. The actuarial principles expounded in the paper appear to transcend law and politics and any ACA replacement plan that fails to take them in account may face significant, if not insurmountable, hurdles in achieving its objective.
This week continues our survey of key Republican proposals to “repeal and replace” the Affordable Care Act (ACA). In the past two weeks, we have reviewed the Trump/Pence transition plan, entitled “Healthcare Reform to Make America Great Again,” and House Speaker Paul Ryan’s proposal, entitled “A Better Way.” This week we take up the Empowering Patients First Act and the Restoring Americans’ Healthcare Freedom Reconciliation Act of 2015. The former is intended to replace the ACA; the latter to repeal the ACA’s key features. Congressman Tom Price (R-GA) is the sponsor of both bills.
The recent Republican election victories appear to ensure that the Affordable Care Act’s (ACA) days are numbered. But with nearly a fifth of the U.S. economy, and the health care coverage for some tens of millions of U.S. citizens, at stake, the law will not simply be repealed. Something will be enacted to take its place. And some popular features of the law (e.g., protection for those with pre-existing conditions) are likely to survive.
Our previous posts have attempted to outline the alternatives and to handicap their odds. Last week we looked that the Trump/Pence transition plan, “Healthcare Reform to Make America Great Again.” This week we turn our attention to particulars of the program offered by House Speaker Paul Ryan entitled A Better Way. In the next two weeks, we will look at legislative proposals offered by Representative Tom Price (R-Georgia), who is President-elect Trump’s nominee to head the Department of Health and Human Services, and by Senator Orrin Hatch (R-Utah). In future posts, we will speculate on the process by which the various policy prescriptions might become law—including whether the repeal of the ACA will be done quickly (we expect it will), whether there will be a transition period (we expect that the answer is “yes”), and if so how long (anywhere from two to four years).
Unlike the Trump/Pence plan, which consists of a series of high-level bullet points, the Ryan plan is a fairly detailed policy proposal. Hence, while not in actual legislative form, it provides a good sense of some of the likely features of the ACA’s replacement.
The Trump campaign promised to “repeal and replace” the Affordable Care Act. On the campaign trail, candidate Trump was particularly critical of the ACA’s individual mandate, the subsidization of premium charges to older individuals by younger individuals, and the coverage mandates on insurance products offered on the exchanges. In contrast, he was in favor of keeping the ban on imposing pre-existing condition limitations and allowing dependents to remain on their parents’ coverage to age 26. So we are not without some clues as to the details of the ACA’s replacement.
As the campaign promise morphs into legislation, there are some sources that give us a sense of what the future has in store for the regulation of the U.S. health care system. These include:
- The Trump/Pence transition plan entitled “Healthcare Reform to Make America Great Again;”
- Speaker Ryan’s A Better Way; and
- Rep. Tom Price’s Empowering Patients First Act.
This post examines the Trump/Pence transition plan. In the next two posts, we will turn our attention to the Ryan and Price plans. All three plans share common features. The particular elements and terms of these plans have been the subject of much study and commentary. Much less is known about how these components will fit together. Nevertheless, we expect that these plans taken together contain many if not most of the elements of the ACA’s replacement.
In Q&A format, recently issued Notice 2015-87 addresses a number of pressing issues that have arisen under the Affordable Care Act (ACA), including that law’s employer shared responsibility rules, information reporting requirements, and insurance market reforms, among others. Q&A 15 of the notice addresses, and proposes changes in, the rules governing breaks-in-service involving staffing firms that place contract and temporary workers with educational organizations. This post explains the proposed changes and examines their impact on staffing firms that provide employees to educational organizations.