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Another One Bites the Dust
By: Brady Bizarro, Esq.
    
It turns out that the reports of Obamacare’s death were greatly exaggerated, at least for the 2017 calendar year. Earlier this week, Senate Republicans scrapped their last-ditch effort to repeal and replace the Affordable Care Act (“ACA”). This time around, the repeal bill, named after its sponsors, Senator Lindsey Graham (R-SC) and Senator Bill Cassidy (R-LA), received a sudden burst of momentum in the past few weeks, mostly due to the September 30th deadline, after which procedural protections expire and Republicans will need sixty (60) votes to pass a healthcare bill.

Like the earlier repeal bills, Graham-Cassidy would not have truly repealed the ACA, but it would have made fundamental changes to it. The centerpiece of this bill was the proposed repurposing of nearly all federal money currently allocated to states for premium tax credits, cost-sharing reductions, and the Medicaid expansion, into a giant block grant distributed to the states. Along with this pinch of federalism, the bill’s sponsors proposed repealing the individual and employer mandates and providing some flexibility to insurers with regard to ACA coverage mandates (provided those insurers offered “adequate” alternative coverage options). In the end, however, this bill ran into the same hurdles that plagued the other repeal bills; moderate Republicans were unwilling to make deep cuts to Medicaid and roll back protections for people with pre-existing conditions, at least not without hearings and regular order.

Now, many political supporters of the President are urging him to turn the page to tax reform, a policy area where Republicans are more unified and perhaps the last opportunity for the Trump Administration to secure a major legislative victory before the end of the year. That does not mean that the GOP is about to abandon the top campaign promise of most Republicans in Congress. We fully expect Republican leaders and the Trump Administration to revisit this issue after they deal with tax reform (possibly after Thanksgiving). Just this week, Senator Graham told reporters that he was optimistic and that it is merely a question of “when,” not “if” repeal was going to happen.

So where does this all leave us? What does this mean for the self-funded industry? It means that for the rest of 2017, Obamacare is staying put. Whether or how strictly the Trump Administration will enforce the ACA remains to be seen. The President has already indicated his intention to sign as many executive orders as he can to ease the regulatory burden of the ACA (his first proposal, to permit states to sell policies across state lines, really only affects the fully-insured market). Meanwhile, HHS, the IRS, and other federal agencies will have to prepare for open enrollment on the exchanges and a new coverage year.


The Benchmark Shuffle
By: Kelly Dempsey, Esq.

Sadly this is not some new dance craze (though we can make one up if you want us to).  We know that the state of the health care industry requires us to be flexible and stay on our toes, especially on the regulatory front; so instead of a traditional “dance,” we’re talking about a fun regulatory topic – benchmarks and essential health benefits (EHBs)!  While ACA repeal and replace proposals have been in debate for months now, a consensus hasn’t been reached and it’s unclear what will be coming next on health care legislation.  As mentioned in previous blogs, for now, employers and health plans should continue to comply with all applicable provisions of the ACA, including the EHB rules that were the center of focus in some of the proposed repeal/replace bills.  

The EHB rules (i.e., the prohibition on annual and lifetime dollar limits for in-network EHBs and the requirement for self-funded health plans to select a benchmark) have been around for quite some time now.  The bottom line of picking a benchmark is for the determination of which benefits are EHBs and which benefits are not EHBs, thus helping plans determine which, if any, dollar limits can be maintained.

It’s important to remember that each state is responsible for their benchmark and the original benchmarks and the rules allow changes after designated timeframes.  Revised benchmark summaries were released for 2017 that reflect updates to the benchmarks, thus requiring employers to review their health plans and make necessary changes to ensure compliance.  Just like the benchmarks changed, health plans change too.   

Benefit changes are the nature of the beast in health care – be it to maintain compliance, to better align with the needs of the employer’s employees, or in an attempt to better contain costs – which means employers have to review and revise their benefits from time to time.  It’s easy to forget all the nuances of the ACA, so when an employer makes changes to benefits, they need to take into consideration the implications of those changes, including a potential change to the benchmark selected.  Whether or not a different benchmark will work for a plan, and which benchmark best aligns, is a case by case analysis based on the benefit changes the employer is looking to make.  

If your plan, or a client’s plan, is looking to make benefit changes, remember to review the benchmark and “shuffle” as needed.

Behind Closed Doors
By: Brady C. Bizarro, Esq.

Anyone paying attention to national politics in the past six months knows that Washington has a problem with leaks; leaks from the White House, leaks from the intelligence community, and unsurprisingly, leaks from Capitol Hill. While many of these leaks come from “anonymous” sources and some are later debunked, they can be extremely damaging to both administration officials and lawmakers. Leaks, however, are not typically an issue in the legislative process. This is because, although legislation is not usually made public until it reaches a congressional committee, Congress routinely holds public hearings, meetings, and roundtable discussions after introducing legislation that could have a significant impact on domestic policy. This time around, however, Republican leaders have chosen to write their health care bill behind closed doors, and that decision should worry employers, insurers, and providers alike.

Back in March, the Washington Post reported that the House bill to repeal and replace Obamacare was being kept secret in an undisclosed room in the U.S. Capitol. This led Republican Senator Rand Paul (R-Ky) on a rather public quest to find the bill and to demand that his House colleagues show him the secret draft. Eventually, a draft leaked to the press, causing Republicans significant grief and making the task of passing the legislation that much more difficult. The Senate has also chosen secrecy, opting not to hold any public meetings on their version of a repeal and replace bill. The strategy seems to be to wait until the Senate has enough votes to pass the bill before unveiling it. Unsurprisingly, an outline of that bill emerged last week and is now causing Senate Majority Leader Mitch McConnell (R-Ky) many headaches.

According to the leaked outline, the Senate bill requires insurance companies to offer coverage to people with preexisting conditions and, unlike the House bill, it prohibits them from charging sick people higher premiums. The outline still permits states to seek waivers that would permit insurers to decide not to cover essential health benefits. This effectively means that insurers can reinstate lifetime and annual limits on coverage since the ban on limits applies only to essential health benefits. Finally, the outline reveals that heavy cuts to Medicaid are still planned, but are pushed out a few more years. In short, these changes represent a compromise between hardline conservatives who want a full repeal of Obamacare and moderate Republicans who are concerned about the impact on low-income Americans and those with pre-existing conditions.

Since we do not know for sure what the final bill will look like, it is futile to try to assess its impact on the health care industry as a whole and on the self-insurance industry in particular. Still, one conclusion we can draw is that the legislative strategy at play is creating substantial uncertainty for our industry. When the Affordable Care Act was being passed, Democrats held public hearings involving industry experts, advocacy groups, and other key stakeholders. While the bill was far from perfect, at least interest groups got the chance to give their input and to discuss their concerns in an open forum. By writing their health care reform bill behind closed doors, Republicans are making themselves susceptible to leaks and to charges that they shut key stakeholders out of the process. It remains to be seen if this strategy is more or less likely to produce a bill that works for the health insurance industry and the American people.

The Rules of the Game are Still Changing
By: Kelly Dempsey, Esq.

It’s clear the rules of the Health Care Reform game we’ve been playing for the last seven years are going to be changing.  If you’ve been living under a rock and haven’t heard about the ongoing debates on Capitol Hill, you’ll be unaware of the fact that an ACA replacement bill is in the works.  There have been numerous articles recently on the impact the new bill would have on the amount of individuals in the United States that would lose coverage.  With the mainstream media focused on the full ACA replacement, you may have missed that another Executive Order associated with the ACA was issued.  

Before we get to what the Executive Order says, what is an Executive Order?  The power to issue Executive Orders is granted under Article II of the Constitution.  An Executive Order is directive from the President to certain identified federal agencies that the President oversees on how to direct their resources – in other words, the President is telling the agencies how to operate with the parameters of the applicable rules already in place.  These orders are published in the Federal Register, the same as the interim and final rules associated with the ACA.      

So what’s this new Executive Order you may have missed?  On May 4, 2017, the President issued an Executive Order related to the ACA’s contraceptive coverage mandate.  The Executive Order directs the agencies involved in issued ACA regulations (the Department of Labor, Health and Human Services (HHS), and the Internal Revenue Service) to re-examine and consider amending the ACA’s preventive service regulations “to address conscience-based objections” to the contraceptive coverage mandate.  HHS issued a statement in response welcoming the opportunity to re-examine the preventive services mandate to help safeguard deeply held religious beliefs.    

We’ve already seen multiple challenges, specifically to the contraceptive coverage portion of the preventive services mandate, heard in front of the various courts, including the Supreme Court of the United States.  As a result of these cases accommodations were made to “pardon” certain entities from complying with the contraceptive coverage piece of the preventive services mandates.  With this new Executive Order, it appears the rules of this game may change again, but it’s still unclear what will be changing.  As always, stay tuned…


Repeal and Replace Faces a False Start - Affordable Care Act Review

By: Brady Bizarro, Esq.

After the surprising collapse of the American Health Care Act (“AHCA”), House Speaker Paul Ryan (R-Wis.) remarked, “We’re going to be living with Obamacare for the foreseeable future.” Tom Price, the Secretary of Health and Human Services, proclaimed that Obamacare was “the law of the land.” In the immediate aftermath of the stunning political defeat, many political analysts concluded that the effort to repeal and replace Obamacare was finished. Only a few days later, however, there were talks of reviving the legislation over the next few weeks. The President himself took to social media to proclaim, “We are all going to make a deal on health care . . . that’s such an easy one.”

What changed? Republican leaders faced immense pressure from conservative activists, interest groups, the insurance lobby, donors, and constituents to follow through on one of their most significant campaign promises. In addition, the President has targeted individual congressmen, mostly from the House Freedom Caucus, and pressured them to get on board with the AHCA. Whatever the Republicans decide to do, they need to act fast. The legislative calendar is jam-packed with other top priorities, including passing a budget and tackling tax reform. Additionally, insurers are developing premiums and benefit packages for health plans to offer in 2018, and these will need to be reviewed by federal and state officials over the summer.

In the immediate future, despite the legislative failure, the Trump Administration still has plenty of ways it can cripple the ACA. The President himself has said the law would “explode” on its own, but that process could certainly be accelerated. For example, the Administration could block funding for ACA subsidies, refuse to enforce the individual and employer mandates, and redefine Essential Health Benefits (“EHBs”).

That last part, redefining EHBs, could have a significant impact on employer-sponsored health insurance. In fact, a new bill is in the works, and one of its provisions (included by the Freedom Caucus) is to repeal EHBs entirely. Essential Health Benefits are requirements that insurers have to cover services like maternity care, mental health care, and hospitalization. According to Republican lawmakers, removing these requirements would significantly lower the cost of certain health plans because they would not be forced to cover a defined list of services.

We will continue to follow new developments closely, especially those that impact employer-sponsored health care.
 

Contact The Phia Group today about an affordable care act external review!


Trump’s Healthcare Bill Failed… Here’s Why
By: Adam Russo, Esq.

The fact that Trump’s healthcare bill failed is big news and now everyone in Washington and in the media is trying to place blame on someone, whether it’s president Trump, Speaker Ryan, the Freedom Caucus or the Democrats. The reality is that this bill would not have worked and I believe that no bill passed in the next few years will work either and the reason is simple. Neither the Democrats nor the Republicans are willing to truly lower the overall cost of healthcare.  The only way that we can have a successful health plan for all Americans is by fighting the root of the problem – the ridiculously high priced hospital and other facility bills and the huge sticker prices on specialty drugs.

There is an easy solution – force the hospitals to justify their charges and negotiate with the pharmaceutical companies on what they can charge. However, the politicians in Washington will never do it because these two entities are the reason they are in DC in the first place. They fund the campaigns, they feed the lobbyists, they are the biggest employers in most representatives’ districts.  They will never push them or fight them or even question them because they need them. If you are a politician and the largest employer in your district that employs the most people is the hospital, then are you really going to criticize their practices? Hell, no! Until this changes, we will see the same games being played as they are now. That’s why we are here at The Phia Group, because we are not afraid to criticize, to fight, to question and to ensure that our clients can offer their employees the best health care coverage at the lowest prices possible.

Health Insurance is NOT Health Care
By: Ron E Peck, Esq.

The Congressional Budget Office (CBO) has provided its assessment of the American Health Care Act, and already Congressional would-be supporters of the law are jumping ship. The CBO’s analysis resulted in what is being called a “devastating blow” to the proposed law.  Primary among the negative reviews is the CBO analysis that predicted about 24 million fewer people would be insured by 2026 under the GOP bill, and that premiums would skyrocket for low-income Americans and the elderly. Yet this is exactly what (some) supporters of the proposed law expected. You likely heard about White House budget director, Mick Mulvaney’s remarks, shared with ABC News chief anchor George Stephanopoulos.  He said that critics worry too much about “getting people coverage,” and that the purpose of the law should instead be, “… focused on getting people affordable health care.”

It’s as if the two sides are talking past each other. If you value securing health insurance for everyone in the nation, then the CBO’s report should scare you. If you care more about securing affordable, accessible, health care for everyone – then the whole discussion over “insurance” should be irrelevant to you. Why? Because Health Insurance is NOT Health Care.

President Obama knew this, once. On the evening of September 9, 2009, President Obama advised a joint session of Congress, that the amount spent on health care is the root cause of skyrocketing insurance premiums. He said, “We spend one and a half times more per person on health care than any other country, but we aren’t any healthier for it. This is one of the reasons that insurance premiums have gone up three times faster than wages.”

Yet… when the Patient Protection and Affordable Care Act (“PPACA,” “ACA,” or “ObamaCare”) was revealed, that fundamental problem was essentially ignored, in exchange for a law whose primary mission was merely to get everyone insured.

So… the money comes out of a different pocket, but what are we doing to reduce the amount actually being spent? Nothing. If I go to a baseball game with my wife, and I buy a beer for $10, whether I pay for it with my debit card, a wad of cash my grandmother sent me for my birthday, or my wife’s credit card (thanks honey), it doesn’t make it any cheaper. $10 for a beer is outrageous, but not as outrageous as the cost of health care.

Just as health insurance is not health care, so too health insurance reform is not health care reform.  Yet, because the ACA got so much press, and many previously uninsured individuals did secure insurance (giving us all the warm and fuzzies), the result was a nationwide misconception that affordable insurance equates with affordable health care. For many, ObamaCare is therefore viewed as a success because millions of uninsured Americans are now insured.

Yet, insurance isn’t a magical money-tree. Like a college student wielding his first credit card, a newly insured America forgets that “someone” has to pay, eventually.  What you buy – with your own money, or with insurance – and how much it costs, still matters.  Insurance just passes the buck – to other insureds, and to you, when the time comes to renew. It blows my mind.  People are involved in car accidents, get out of their vehicle, examine the minor damage, and agree NOT TO REPORT IT TO THEIR INSURANCE, because they DON’T WANT THEIR PREMIUM TO INCREASE! People actually choose to pay for car repairs out of pocket, because they fear insurance premium increases and want to save their insurance for “when they really need it.”  Yet, if we treated auto insurance the way we treat health insurance, we’d be outraged that insurance doesn’t pay for the air in my tires, or the dancing hula girl on my dashboard.

Providing insurance (meaning, digging into another pocket to pay for healthcare) didn’t reduce the cost of said care. In fact, in many instances, having new, direct access to deeper pockets incentivized providers to increase their rates – and why not? Instead of balance billing an uninsured patient, I now have direct access to the deep pockets of a carrier? Sign me up!

Steven I. Weissman, a former hospital president, stated that, “Rates must be published in a uniform format such as industry standard CPT codes or a percentage of Medicare rates. Every citizen would be empowered to search any medical procedure online and see pricing for all providers within X miles. It would be as easy and familiar as checking the price of any other goods or services;” (http://www.orlandosentinel.com/opinion/os-ed-health-care-prices-myword-061015-20150609-story.html; https://www.change.org/p/end-predatory-healthcare-pricing).

In addition to addressing the actual cost of care, we need to be honest about what insurance is, and is not; as well as what it is, and is not, meant to cover. Insurance only works when the insurer is allowed to assess risk, and through underwriting, quote premiums and offer limits adjusted to the individual policy holder. Forcing a carrier or health plan to accept $1,000 in premium for coverage that we know, with certainty, will cost the carrier $1,000 is outrageous and – in my mind – amounts to a form of eminent domain or a governmental taking.

When insurance is required to cover people without regard for risk, forcibly collecting money from all to pay for benefits afforded to some more than others; with limits placed upon carriers regarding how much they can charge, what they must provide, and more, insurance ceases to be insurance and becomes an agent of wealth distribution, a.k.a. a tax collector.

A promise to pay for all but certain future costs eliminates the entire reason to engage in the business of insurance. It’s the reason why auto insurance doesn’t pay for oil changes, tire rotations, or gas changes!

The time has come to be honest with each other and ourselves. What do we hope to accomplish with health care reform? What is the easiest, most direct way to achieve that goal? Do that.  Commandeering an entire private industry to camouflage a tax because politicians are too scared to openly admit that is what they are doing – taxing the nation to raise capital for the purpose of paying out of control health care costs – just doesn’t work for me.


First Proposed ACA Rule Changes
By: Jen McCormick, Esq.

Today we got our first new proposed ACA rule changes from the Trump Administration.  One of the proposals was to decrease the open enrollment window for individuals to sign up on the insurance exchanges.  Specifically, the window which is currently November 1 to January 31 would instead be November 1 to December 15.  The thought, it seems, is that this will limit an insurers exposure from individuals only signing up once they get sick… if there is a shorter window. Hold on for the ride because I imagine this will be the first of many revisions to ACA as we know it today.

Land of 10,000 Stories: Cop and Homeless Veteran
wkyc.com

CLEVELAND – Big medical bills are a problem for many Americans.
But few services deliver a bigger surprise hit than a life-saving ride on an air ambulance.
Here in Northeast Ohio, we found dozens of court battles with one of the nation’s largest private, for-profit air ambulance companies.
Read more…

The Time of Uncertainty
By: Brady Bizarro, Esq.

At a recent Republican retreat, someone secretly recorded discussions regarding the repeal of the Affordable Care Act. While many have condemned the leak, it has revealed that political leaders in Washington are very troubled and seemingly overwhelmed by the prospect of Repeal and Replace. They acknowledged that there is uncertainty and confusion surrounding ACA regulations, enforcement, and the fate of the Medicaid expansion. Patients are also concerned about losing coverage or particular benefits. All of this may be a sign that Repeal and Replace may take longer than most political pundits anticipated.