Health Policy News March 2017

The primary focus of this month’s edition of Health Policy News is the recently-introduced American Health Care Act. The bill has received much attention in D.C. and nationwide as it moves quickly through the U.S. House of Representatives. To help you understand what the bill would mean for private health insurance and Medicaid going forward, PCG subject matter experts have created a comprehensive summary of the bill. The Congressional Budget Office (CBO) just released its analysis of the bill (known as the “CBO score”) and that analysis is the focus of our second article.

Finally, we share information about another – more limited – action taken related to the Affordable Care Act (ACA) recently. At the end of February, the Centers for Medicare & Medicaid Services (CMS) announced the extension of transitional health plans.

As always, contact us at for more information on any of these topics.

House Committees move forward on ACA repeal

The House took a major step in advancing action on the ACA with the filing of the American Health Care Act. The bill, which was filed in the House of Representatives on March 6, 2017, is a compilation of budget reconciliation packages from the House Ways & Means Committee and the House Energy & Commerce Committee, in follow-up to the budget resolution adopted in January.

The bill does not repeal the ACA in full, but rather proposes changes primarily to the ACA’s insurance affordability, Medicaid expansion, coverage requirement and revenue provisions. It also proposes changes to Medicaid funding more generally. On the other hand, the bill leaves many other ACA provisions (insurance consumer protections, Exchanges and enrollment provisions, delivery system reform provisions, Medicare provisions, to name a few) largely untouched. The administration has said that action through budget reconciliation will be followed-up with changes through administrative actions and non-budget legislation.

While informative as the starting point for the official debate in Congress over repeal of the ACA, the bill is likely to change throughout the legislative process. The bill also faces a number of challenges: divisions in the Republican party regarding Medicaid Expansion and tax credits; Senate rules regarding what can be included in budget reconciliation legislation; and the newly-released CBO score, which projects significant increases in uninsured rates and increased premiums at least in the near-term.

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Proposed ACA repeal legislation would increase persons without health coverage

On March 13, 2017, the CBO released estimates on the impact of the proposed American Health Care Act. The CBO score

indicates that the bill would increase the number of persons without health coverage by 24 million persons in 2026: 52 million persons without coverage in 2026, as compared to 28 million persons in 2026 under the ACA.

Although it would eliminate various federal revenue streams established under the ACA, the CBO also predicts that the bill would reduce the federal deficit by a net $337 billion (about $34 billion per year) through 2026. CBO estimates that federal deficit reduction would occur despite the loss in revenues mainly as a result of two factors: the bill’s $880 billion in reductions in Medicaid federal financial participation (FFP) for state Medicaid agencies through 2026; and the bill’s $673 billion elimination of federal subsidies through 2026 for low-income persons lacking other sources of coverage.

Continue reading about the CBO’s analysis here.

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Transitional health plans to continue through 2018

In November of 2013, CMS introduced the concept of “grandmothered plans,” coverage in place prior to 2014 that would have been prohibited as of 2014 as a result of changes under the ACA. CMS issued guidance permitting those plans to be renewed for existing policyholders if permitted by states.

Initially, CMS permitted grandmothered plans to be renewed for policy years starting as late as October 1, 2014. CMS subsequently extended grandmothered plans that have been continually renewed, most recently through policy years starting on or after October 1, 2017, provided that all such policies end by December 31, 2017.

On February 23, 2017, CMS issued a bulletin that, once again, extended grandmothered plans, allowing them to be renewed for policy years beginning on or before October 1, 2018, provided that all such policies end by December 31, 2018. Once again, this applies in states that also allow for such plans. States may also adopt the policy in a more limited manner. The guidance also sets forth consumer notice requirements.

Click here to continue reading about this guidance.

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