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2018 News & Updates

Last Updated: December 20, 2018

Texas Judge Rules against the Affordable Care Act

On Friday, December 14, a Texas federal district court judge declared the Affordable Care Act’s (ACA) individual mandate—and consequently, the entire ACA—unconstitutional.  In Texas v. Azar, the court determined that since Congress eliminated the penalty associated with the individual mandate through the passage of the Tax Cuts and Job Acts in December 2017, the individual mandate was no longer a permissible exercise of its taxing authority.  Moreover, since the judge deemed the individual mandate as an essential provision of the ACA that could not be severed (separated) from the frest of the law, he concluded that the entire ACA was invalid.  The decision, however, did not impose an injunction against the law (meaning that the court did not give an order to stop the implementation of the law) and, thus, the law remains in effect for the time being. The court’s decision resolved many, but not all of the claims raised in this litigation.   The court plans to hear and resolve the remaining claims by early 2019.

Thereafter, it is expected that the case will work its way through various appeal processes, commencing with an appeal by the 16 states and the District of Columbia who intervened in the case to defend the provisions of the ACA.  In fact, California’s Attorney General, Xavier Becerra, has already signaled his intent to do so.

For now, please be aware that:
• Open enrollment will proceed as planned in New York. New York State’s Open Enrollment Period extends through January 31st and people can enroll at nystateofhealth.ny.gov
• There will be no changes to enrollees’ current coverage or their coverage in a 2019 plan.
• All ACA protections remain in place.

Looking ahead, the case will likely move to the Fifth Circuit Court of Appeals and then to the Supreme Court. If upheld, invalidating the ACA would also invalidate all of its provisions across the United States, including federal subsidies, Medicaid expansion, and protections for pre-existing conditions.

For more information about the decision, you can read helpful analyses in the Health Affairs Blog and from the Commonwealth Fund. 

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Last Updated: July 23, 2018

Federal Risk Adjustment Program Suspended

On July 7th, the Federal Administration announced that it would suspend the “risk adjustment” payment program, which redistributes billions of dollars among insurance companies to help stabilize the insurance markets.

What are risk adjustment payments?
The risk adjustment program was established by the Affordable Care Act (ACA) to discourage insurers from selectively insuring healthier people. It does so by redistributing funds from plans that enroll lower risk (healthier) people to plans that enroll higher risk (less healthy) people. 

Is risk adjustment the same as the reinsurance and risk corridor programs?
No, but all three of these programs were designed to complement each other to help stabilize the insurance markets. The reinsurance and risk corridor programs were also established as part of the ACA, but were set to expire after three years, while the risk adjustment program was intended to continue permanently.

What has changed?
A February court ruling in New Mexico pointed out a flaw in the way risk adjustment payments are calculated, so the federal administration decided to put the program on hold. It is worth noting that another court in Massachusetts upheld the program, so there are conflicting rulings in the Federal District Courts.
While the program is suspended, risk adjustment payments from 2014, 2015, 2016, and 2017 will not be made to insurance companies that took on higher risk clients. Some say the uncertainty over the future of the risk adjustment program will lead insurers to increase premiums, but it’s still unclear how the recent events will impact the market. Much will depend on any changes made to the program and how long it is suspended. 

What’s happening in New York?
Regardless of what happens at the federal level, New York State has the authority to implement risk adjustment programs that fit the needs of its markets. In fact, the State already supplements the federal program with mechanisms to make it a better fit for New York’s markets. On July 9th, Governor Cuomo directed state officials to “prepare to implement an expanded State Risk Adjustment Program that controls health cost increases as much as possible in case the federal program is not reinstated.” This press release indicates that New York is preparing to take any necessary measures to ensure the federal suspension of the risk adjustment program doesn’t negatively impact the state’s insurance markets. 

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Last Updated: July 9, 2018

 The Department of Labor Finalizes Rule on Association Health Plans (AHPs)

On June 19, 2018 the Department of Labor released a final rule that changes the way Association Health Plans are regulated. The rule makes it easier for people to get coverage through AHPs, and will allow these plans to avoid some of the Affordable Care Act’s (ACA) requirements.

What are Association Health Plans?
AHPs allow employer groups and/or associations to band together to provide health coverage for employees.  They are especially used by small businesses.

Why This Rule Matters:
AHPs do not have to follow the same regulations as other plans in the individual and small group markets. For example, they aren’t required to cover the 10 Essential Health Benefits (EHBs), such as prescription drugs or mental health services. Therefore, AHPs could decide to eliminate certain areas of coverage and offer cheaper, skimpier plans to their members.

As a result, some people who decide to get their coverage through an AHP could enroll in a plan that may not meet their healthcare needs and may be faced with high out-of-pocket costs when they go to receive services. Experts predict that this rule will encourage young, healthy people to enroll in AHPs, which will drive up cost of coverage for those who continue to rely on the full range of services provided in the individual and small group markets.

It is important to note that even with this new rule, AHPs cannot deny coverage or charge people different premiums based on their health status. For a more detailed analysis of the final rule, you can visit this link. 

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Last Updated: April 17, 2018

CMS Finalizes 2019 Notice of Benefit and Payment Parameters

Each year, the Centers for Medicare and Medicaid Services (CMS) implement a detailed notice on changes to our healthcare system called the Notice of Benefit and Payment Parameters (NBPP). On April 9, 2018, the CMS finalized their most recent iteration of this rule.

Among the many changes made this year, below are some provisions that have the potential to impact healthcare consumers:

• Increasing the maximum annual out-of-pocket limit on cost-sharing (which is the maximum amount an individual can spend on in-network co-pays and/or coinsurance, not including premiums) to $7,900 for self-only (individual) coverage and $15,800 for other than self-only coverage. 
• Eliminating the requirement that tax filers receive “direct notification” when their tax subsidies on the Exchange are at risk of being discontinued.
• Allowing pregnant women who lose CHIP coverage to qualify for Special Enrollment Periods (SEPs)
• Exempting consumers from the prior coverage requirement that applies to certain SEPs if they lived in a service area without a qualified health plan (QHP) available through an Exchange.

Additional changes the final rule advances include:

• Expanding State flexibility to choose their Essential Health Benefits (EHB)-benchmark plan
• Removing the requirement that each Exchange have at least two Navigator programs, with each Navigator entity maintaining a physical presence in the Exchange service area
• Increasing State flexibility to oversee risk adjustment transfers in their respective individual, small-group, and merged markets
• Easing the process for States to request adjustments to their Medical Loss Ratio (MLR) standards
• Eliminating the requirement that Stand-Alone Dental Plans (SADPs) cover pediatric dental care at low and high actuarial value levels

Along with finalizing the 2019 NBPP, CMS released updated guidelines on the hardship exemption for the Individual Mandate requirement, which is still being enforced.

It’s important to remember that there is still a penalty for most people who do not have health insurance in 2018.

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 Last Updated: February 21, 2018

Congress Passes another Continuing Resolution (CR) with Key Funding for Certain Health Programs

On Friday, February 9th, a new Continuing Resolution (CR) was signed into law that keeps the federal government funded through March 23rd, 2018. In addition to the broad short-term spending extension, the bill contains a variety of longer-term healthcare provisions. Notably, the bill:

• Extends funding for the Children’s Health Insurance Program (CHIP) for an additional 4 years.
  • The last CR, signed on January 22nd, reauthorized funding for CHIP through Fiscal Year (FY) 2023, ensuring that the program covering nearly 360,000 children in New York would be funded. The new CR builds off this previous reauthorization by extending CHIP funding through FY 2027.
• Reauthorizes funding for Community Health Centers through FY 2019. 
  • The CR allocates more than $7 billion to Community Health Centers, which provide care for more than 25 million Americans nationwide.
• Delays cuts to the Disproportionate Share Hospital (DSH) program until FY 2020. 
  • The DSH program provides financial support to hospitals that serve large numbers of Medicaid and uninsured individuals, including NYC’s Health + Hospitals system. According to Governor Cuomo’s FY 2019 Budget Briefing Book, these cuts would have taken $165 million from the State’s public and safety net hospitals’ revenue in FY 2019 and $1.3 billion by FY 2025.

The CR also contained the following health-related provisions:

• Significant cuts to the Prevention and Public Health Fund through FY 2028.
• Funding for the National Health Service Corps and Teaching Health Centers through FY 2019
• Repeal of the Medicare payment cap for therapy services beginning on January 1, 2018
• Changes to the treatment of lottery and other lump-sum winnings when determining Medicaid eligibility
• Inclusion of biosimilars in the Medicare Part D coverage gap discount program
• Closure of the Medicare “donut hole” by moving up from 2020 to 2019 the requirement that drug manufacturers pick up a larger portion of the costs of their medicines
• Changes to Medicaid and CHIP Third-Party Liability

For a complete summary of the bill, including all of the non-healthcare provisions, you can click here. Be sure to check back soon for additional updates!

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 Last Updated: January 25, 2018

Children's Health Insurance Progran (CHIP) is Funded for 6 Years as Part of a 3-week Continuing Resolution

 

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