ParenteBeard Health Care Reform Implementation Update Highlights January 31, 2022
February 3, 2022

This week the Congressional Budget Office (CBO) provided new scores for the three sustainable growth rate (SGR) repeal proposals from the Senate Finance, House Ways and Means, and Energy and Commerce Committees; a list of potential offsets for SGR legislation circulated Washington; the president discussed the already positive developments from the ACA in his State of the Union address; Utah announced its intention to expand Medicaid under the ACA tipping the balance of Medicaid-expansion and non-expansion states to more than half expanding, and 20-term congressman and long-time advocate of a health care reform, Henry Waxman, announced his retirement. Senator and doctor, Tom Coburn, who has spent fifteen years in Congress, will also retire at the end of this year.

On the Hill

On January 24, the CBO said that the House Ways and Means SGR repeal bill would cost $121 billion over 10 years.  Additionally, the CBO reduced its estimate for the House Energy and Commerce SGR bill from $175 billion down to $146 billion. Then on January 25, the CBO announced the score of the Senate Finance Committee’s SGR repeal bill of $150.4 over 10 years.  The higher-cost Senate Finance proposal includes close to $40 billion in Medicare extenders not included in the other two proposals.

A list of possible offsets for Sustainable Growth Rate (SGR) formula repeal is being circulated around Washington.  The list is extensive and is derived from policies developed by the Obama administration, the Congressional Budget Office and the Bipartisan Policy Center. All listed potential offset policies are merely options, not cuts or policy changes that will necessarily occur.

On January 28, the House Ways and Means Committee held a hearing on the law’s employer mandate and its definition of a “full-time” worker. The ACA counts employees who work 30 hours a week as full-time employees, and thus part of the group to whom employers must provide health insurance. At the hearing, retail, restaurant and other business groups argued that the ACA’s definition of full-time work is going to cause businesses to cut employee hours to avoid having to offer them health insurance.

On January 27, senior Senators Orrin Hatch (R-Utah), Tom Coburn (R-Oklahoma) and Richard Burr (R-N.C.) released a legislative outline for a replacement plan for the ACA.  The plan envisions issuing tax credits to those not working at a large company, allowing states to set up high-risk pools and significantly reshaping the Medicaid program.  The plan would be paid for by capping the tax exclusion for employee health plans. It still needs legislative language and an official cost estimate, but it is unlikely to move through the Democrat-controlled Senate.

On January 28, the House voted 227-188 to pass the No Taxpayer Funding of Abortion Act, which would ban federal subsidies from going toward insurance plans that cover abortion and making the ban on federal spending on abortion permanent – something which is approved on an annual basis through the Hyde Amendment.  The White House threatened to veto this bill.

Speaking in Texas on January 23, Rep. Paul Ryan said Republicans are discussing eliminating the ACA’s “insurance company bailouts” in negotiations to lift the nation’s debt ceiling in February. Republicans have already introduced legislation to target the reinsurance fund and risk corridors to which Rep. Ryan alluded, which are designed to limit the risk insurers have to take and try to prevent premium spikes for consumers that result from ACA’s requirements that insurance companies accept all beneficiaries. Sen. Mike Lee also noted the “bailouts” in his official Tea Party response to the State of the Union address.

At the Agencies

According to an IRS notice released on January 23, Americans with limited health coverage under Medicaid and certain military health care programs will not be subject to the individual mandate penalty in 2014.

HHS awarded nine states a combined $201.2 million in new federal grants to support state-run and partnership exchanges.  In order of grant amount received, the states receiving grants are Washington State, New Mexico, Mississippi, Arkansas, Delaware, Nevada, New Hampshire, Rhode Island and Utah.

In the White House

On January 28, President Obama delivered his fifth State of the Union address.  While health care and the ACA did not play as central a role in the speech as they have in years past, the president did note the strides that had been taken for those with pre-exiting conditions, those who are 26 and still able to remain on their parents’ health insurance plans and that more than nine million Americans had signed up for private health insurance or Medicaid coverage.

In the States

On January 23, Utah Governor Gary Herbert said in a news conference that he backed his state’s expansion of Medicaid.  Assuming the legislature is on board with Gov. Herbert, Utah would become the 26th state to agree to expand Medicaid, and a majority of states will be in this group.

In Third Parties

On January 23, Moody’s downgraded the credit outlook for health insurance companies from “stable” to “negative.”  Some of the concerns prompting Moody’s downgrade were a rocky rollout of the exchanges, lower than expected enrollment numbers, uncertainty over who is enrolling, ever-changing regulations, troublesome back-end exchange issues and an underlying question of whether insurers are going to get paid sufficient premiums through the exchanges.

Target is now planning to stop providing health insurance coverage for its part-time employees beginning in April, at which point these employees can join the ACA’s health insurance exchanges.  Target’s announcement follows those of Trader Joes and Home Depot among others.  Target’s shift reflects the ACA requirement that employers provide health insurance to their full-time employees.

In the Courts

On January 24, the Supreme Court granted the Little Sisters of the Poor, a group of Catholic nuns, a temporary exemption from the birth control mandate of the ACA until the 10th U.S. Circuit Court of Appeals decides the case.

For more information on these or other topics, please visit our Affordable Care Act Check-Up Site  or contact ParenteBeard Healthcare Partners Lou Feuerstein at Louis.Feuerstein@ParenteBeard.com or 732.388.5211 x12760 or Mark Ross at Mark.Ross@ParenteBeard.com or 570.820.0311.