Repeal and Replace Legislative Update
By Cal Kellogg, executive vice president of external operations and chief strategy officer, Arkansas Blue Cross
The U.S. Senate continues to grapple over how to repeal and replace various aspects of the Affordable Care Act (ACA). Various components of the U.S. House of Representatives-passed American Health Care Act (AHCA) created issues for both conservative and moderate Senate Republicans, so the Senate attempted to craft its own refined version called the Better Care Reconciliation Act (BCRA). Under budget reconciliation rules, the bill can be passed with merely 51 votes, but can only focus on items that are clearly budget related (revenue and spending) and cannot address other ACA market rule issues unless the parliamentarian of the Senate rules the item is budget related. Regardless of whether the BCRA passes the Senate or not, there will have to be additional regulatory and administrative action to address many of the ACA market rules in the future as we transition into post-ACA markets.
There is still a question of whether or not the Senate will pass the BCRA or not. First, it was planned for a vote prior to July 4, but there were enough holdouts to keep it from hitting the 51-vote threshold. Consequently, several amendments were proposed in an attempt to get various senators on board. At this point two obstacles seem to be in place: (1) If the amendment appeases a conservative senator, it creates issues for a moderate senator; and, (2) the amendments have to be scored by the Congressional Budgetary Office (CBO) prior to a vote. At the last “vote count” there were at least eight Republican Senators expressing concern over aspects of the BCRA. As a result, the Senate has delayed its August recess for two weeks and is attempting to get to a vote on the amended BCRA next week. As I write this, the “new” is being circulated in Washington.
There are several key amendments that folks know about. One amendment offered by Senator Cruz and called the “Freedom Option” would allow plans that sell compliant exchange products to also sell non-compliant products with underwriting, more limited benefit designs, etc. This is done in an attempt to create more affordable products, but would have significant long-term impact on the individual market by creating two distinct pools of insured. The healthy and younger who could make it through underwriting and likely focus on purchasing less coverage, and the exchange markets that would likely only have less healthy individuals due to the guaranteed issue and essential benefits packages. Over time the prices in the exchange market would increase significantly as the risk pool deteriorated. Clearly, this is an issue anyone in the individual insurance business will have to monitor as the BCRA progresses through the legislative process.
Other amendments increase funding for the fight against opioid abuse and add additional funding for state stability pools established in the AHCA. Those funds can be used to moderate the rate increases for lower-income individuals but the states must contribute state funds into the process. The additional funding at the federal level comes from not repealing taxes on high-income individuals.
Once again it is important to keep in mind, the market rules for 2018 are still in place, plans are filing their rates for 2018, everyone is preparing for open enrollment and the ACA remains largely intact with a few administrative modifications. Arkansas has submitted its Arkansas Works waiver to Centers for Medicare and Medicaid Services (CMS) and we should be preparing for individuals between 100-138 percent of the federal poverty level, who have coverage under the current Arkansas Works program, to transition to the exchange over the year as they go through a redetermination process throughout 2018. So regardless of the uncertainty and unpredictability, we should all be preparing for the individual open enrollment period and understand the changes that have occurred in Arkansas. If and when repeal, repeal and replace or replace happens, we will have time to adjust and adapt, but for now things remain basically the same even though change is on the horizon.