Patient Freedom Act of 2017

Lisa Kaplan Howe on February 9, 2017

On January 23rd, Senators Bill Cassidy and Susan Collins introduced the Patient Freedom Act of 2017 to largely repeal and replace Title 1 of the Affordable Care Act (ACA), which includes insurance reforms. Certain ACA provisions would remain, including changes to the Medicaid program (e.g., Medicaid expansion) and Medicare and ACA revenue provisions. In addition, the bill would immediately reinstate many of the most popular ACA provisions:
  • Ban on lifetime and annual coverage limits
  • Coverage of young adults up to age 26 through family plans
  • Prohibitions of preexisting condition exclusions (for those who maintain continuous coverage)
  • Guaranteed issue and renewal of insurance (for those who maintain continuous coverage)
  • Preventive services no-cost coverage requirement (unless the individual receives employer contributions to the new Roth Health Savings Accounts [HSAs])
  • Non-discrimination rules under Section 1557 of the ACA
  • Requirement to cover mental health and substance use disorder services in parity
  • Section 1332 State Innovation Waivers
  • The Federally-Facilitated Marketplace (FFM) (as a state option)
States then could choose from three options:
  1. Reinstate Title 1 of the ACA in full in their state, including the coverage mandates, Exchange, advance payment tax credits (APTCs) and cost-sharing reductions (CSRs) prorated to 95% for eligible residents, small business tax credits and Section 1332 waivers (Medicaid expansions could also be maintained).
  2. Adopt an alternative reform utilizing Roth HSAs, as outlined in greater detail below. This would be the default option for non-selecting states.
  3. Revert to pre-ACA law or implement a state-based system for which the state would receive no federal contributions.
In states that select or default to option two, federal subsidies for health insurance premiums and cost-sharing would be provided via newly-established Roth HSAs. The total allotment in a state would be 95% of the funding that would have been received via APTCs and CSRs, plus – in states that choose to cover their Medicaid expansion population via Roth HSAs – a 95% federal Medicaid match for those individuals. The total funding would then be divided among eligible individuals with adjustments made for age, geography and income (but not other rating factors).
While the total funding available would be decreased, the pool of eligible individuals would increase, with eligibility phasing out at $90,000 in annual income for individuals, and $150,000 in annual income for families. In place of the mandates, individuals would be subject to limited open and special enrollment periods as well as penalties and underwriting if they fail to maintain continuous coverage. States could also auto-enroll individuals into bare-bones High-Deductible Health Plans.
The bill also includes rules regarding provider billing for emergency health care and prescription drugs, price transparency, and cross-subsidization of insurers as individuals change carriers.

Published by Lisa Kaplan Howe

Lisa Kaplan Howe (J.D.) is a Senior Advisor who has spent her career working in health law and policy. At PCG, she focuses on statutory and regulatory analysis and strategic advising, particularly related to health care policy. Lisa has provided subject matter expertise to support state health care reform efforts, including policy development and regulatory support for health insurance Marketplaces and state insurance plan management efforts, Medicaid expansion and Medicaid Waivers (including DSRIP Waivers) and State Innovation Waivers. Lisa led PCG’s work with the New Hampshire Insurance Department relative the state’s Section 1115 Medicaid Waiver to provide coverage to newly-eligible adults through the Marketplace and continues to support the states’ Marketplace plan management work. In those roles, Lisa has served as the chief advisor and policy expert related to Medicaid and private insurance law to the New Hampshire Insurance Department, helping to identify, analyze and lead strategic consideration of federal opportunities and requirements. Lisa is also part of the team helping to design Colorado’s Delivery System Reform Incentive Payment (DSRIP) program. Ms. Kaplan Howe also provides broad policy and regulatory support to PCG’s other health care clients across the country, analyzing policy and regulatory developments, providing strategic advice relative to regulatory questions, and drafting policy briefs and position papers. Lisa is a managing editor of PCG’s monthly health practice area newsletter, Health Policy News. Prior to joining PCG, Lisa served as Policy Director at New Hampshire Voices for Health, where she led legislative and regulatory analysis, strategic planning, and implementation of the organization’s policy agenda. Her work included drafting bills, amendments, testimony, and communications and testifying at hearings. Lisa also held the positions of Private Market Policy Manager and Consumer Health Policy Coordinator at Health Care for All of Massachusetts. While there, she managed private insurance market policy work and was a member of the organization’s internal health reform team. Lisa also practiced law in the Ropes & Gray health care department, advising health care provider and insurer clients.

  1. Roundup of federal health policy developments – Health Policy News Blog July 12, 2018 at 10:12 pm

    […] the bill would immediately reinstate come of the most popular ACA private market reforms. Click here to continue reading about the Patient Freedom […]

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