On Thursday, October 12th, President Donald Trump signed an executive order with the goal of rolling back the Patient Protection and Affordable Care Act (ACA) via the regulatory process. The Administration noted that since the Republican-controlled Congress has yet to repeal the ACA as a law, President Trump may begin issuing a series of executive orders to make changes via the regulatory process.
The order signed on Thursday:
- Directs the Department of Labor to consider expanding access to Association Health Plans (AHPs) for small groups and employers, to band together and purchase insurance across state lines. Please note that the ACA already enables creating a process to purchase insurance across state lines. The executive order allows agencies to broaden the interpretation of the Employee Retirement Income Security Act (ERISA) and loosen ACA coverage requirements with a goal of a broader range of insurance options at lower rates in the large group market. According to the Administration, employers participating in an AHP cannot exclude any employee from joining the plan, and cannot develop premiums based on health conditions.
- The Administration noted that this AHP change may help prevent provider consolidation and monopolies, as the ACA “exacerbated a growing trend toward consolidation among healthcare providers, particularly large hospitals systems buying up physician practices. Nearly half of hospital markets are anti-competitive, with many areas of the country dominated by one or two large hospital systems. Evidence suggests that increased market concentration leads to significantly higher prices for consumers.”
- Directs the Departments of the Treasury, Labor, and Health an Human Services to consider expanding coverage through low cost short-term limited duration insurance (STLDI) that are not required to adhere to ACA coverage requirements.
- Directs the Departments of the Treasury, Labor, and Health and Human Services to consider changes to Health Reimbursement Arrangements (HRAs). HRAs are employer-funded accounts that reimburse employees for healthcare expenses, such as deductibles and copayments. Currently, the IRS does not count funds contributed to an HRA as taxable income.
ACG will monitor any forthcoming regulatory proposals and will update membership with any latest developments. ACG will also continue to fight for patients with pre-existing conditions and advocate for coverage for essential health benefits and preventive services, including waiving cost-sharing for these important services provided by ACG members.
Also on Thursday, President Trump announced that the Department of Health and Human Services (HHS) is immediately halting cost-sharing reduction (CSR) payments to insurers. The next payment is scheduled for October 18th, which will likely not occur. These subsidies, which are worth an estimated $7 billion this year, are designed to help insurers cover lower income individuals. They are paid in monthly installments to help maintain coverage, but Congress hasn’t yet appropriated funding for the program before the end of the fiscal 2017 year (September 30th). According to policy experts, insurers will now have the option to try to adjust their rates or pull out of the markets immediately when the CSR payments end, due to a “opt out” clause included in the contracts that insurance companies signed with HHS. U.S. Senators Lamar Alexander (R-TN) and Patty Murray (D-WA) had been working on a deal to fund these subsidies. The latest actions by the Trump Administration will likely speed up this deal in Congress. ACG will monitor these discussions, and will update membership on the impact to your practices, patients, and states.
Whitfield L. Knapple, MD, FACG
Chair, ACG Legislative and Public Policy Council