November 6, 2017
Individual mandate could be included in tax plan
Some lawmakers are looking to include a repeal of the ACA’s individual mandate in proposed tax legislation. The individual mandate is a key tenet of the ACA and helps keep insurance markets stable. The repeal of the mandate is not in the most current draft of the tax plan, but lawmakers have signaled it will be part of the bills’ negotiating process. The nonpartisan Congressional Budget Office estimates that repealing the individual mandate would save $416 billion over the course of a decade, but leave 15 million more Americans without health insurance.
House passes bill to restore CHIP funding
The House passed a bill on Friday to reauthorize the Children’s Health Insurance Program (CHIP), one month after funding expired. The House bill limits federal subsidies for Medicare beneficiaries with an income of more than $500,000 annually and cuts more than $6 billion over the course of 10 years from an ACA fund to help pay for public health initiatives such as diabetes prevention, heart disease, cancer and opioid abuse. The Senate plans to make substantial adjustments to the House bill to gain bipartisan support.
CMS backtracks on physician payment rule
CMS has been criticized for its reliance on a secretive panel of doctors, the Relative Value Scale Update Committee, also known as RUC, convened by the American Medical Association to determine Medicare payments. In response, CMS has stated it will independently establish physician payment rates and consult with other independent sources in its final physician payment rule for 2018. The AMA’s RUC is a group with little public oversight and tends to favor specialty physicians. The RUC is still expected to influence the development of Medicaid rates.
California insurers making billions off of Medicaid
Some California insurers are making unusually large profits off of Medicaid, according to state data. Medicaid insurers in the state made more than $5 billion in profits from 2014 to 2016 as a result of higher payments to insurers during the first years of the ACA. The state expected sick patients would flood the system, so they increased payments to health plans. However, the claims were not as high as the state anticipated, allowing insurers to keep the profits. The insurers who have benefitted defend the profits, saying the increase in money follows losses in previous years.
House votes to repeal IPAB
The House voted to abolish the Independent Payment Advisory Board (IPAB), which was tasked with cutting Medicare costs if they reach a certain threshold. However, the 15-member panel was never convened because Congress did not fund the panel and Medicare cost increases have stayed below the level that would trigger action by the panel. Some lawmakers support repealing the panel as they feel it takes oversight of Medicare out of their hands. Others believe the board is necessary to address Medicare spending and keep the program fiscally solvent for future enrollees.
Humana sues federal government for unpaid risk-corridor payments
Humana has sued the federal government to recoup $611 million in risk-corridor payments for 2014 through 2016. The ACA established the risk-corridor program to encourage insurers to participate in the exchanges by reimbursing them for excess costs and reducing their risk. But HHS and CMS later claimed the risk-corridor program had to be budget-neutral, with profitable insurers’ payments offsetting the reimbursements. In its suit, Humana argues that past HHS and CMS rulemaking never claimed the risk-corridor program had to be budget neutral and is seeking reimbursement for the costs. Several other exchange insurers have sued the federal government to recoup their risk-corridor payments.
IRS issues rules for use of QSEHRAs
The IRS has released its first guidance on qualified small employer health reimbursement arrangements (QSEHRAs), an exception to ACA rules created by the 21st Century Cures Act that allows small businesses to use pretax dollars to help employees purchase individual coverage. The guidance follows President Trump’s executive order, which encourages federal agencies to consider new rules that expand the usability of HRAs. The guidance establishes the qualifications for QSEHRAs, what employees are eligible for participation, and other technical requirements. The guidance will go into effect after November 20, 2017, but the IRS is accepting comments until January 19, 2018 to help with future rulemaking.
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