Employer-Sought Health Policy Changes Left Out of Spending Bill 

Mar 22 2018

As expected, a package of individual health care market stabilization reforms has been left out of the fiscal 2018 omnibus spending bill set to become law. That omission also ended chances for other potential health care add-ons sought by employers, including a new bipartisan package of HSA improvements and retroactive relief from ACA employer mandate penalties.

The parties have been negotiating a stabilization package for the better part of six months, with support from an employer community concerned about market volatility shifting costs and making it more difficult for some early retirees and part-timers to get coverage. On Monday, Republican lawmakers from the Senate and House released text of their stabilization proposal, which includes:

  • $30 billion in federal funding for risk pool and reinsurance programs
  • Appropriation of cost-sharing reduction payments for part of 2017 as well as 2019, 2020 and 2021
  • Additional state flexibility for the Affordable Care Act Section 1332 "state innovation" waiver program
  • Establishment of new "copper" low-actuarial value plans
  • New regulations to be issued that would effectuate the ACA’s provision permitting health insurers to sell policies across state lines
  • New required disclosures to consumers buying "short-term" health insurance plans
  • Restored funding for ACA enrollment outreach
  • So-called "Hyde amendment" prohibitions on the federal funding of abortion

But talks fell apart over abortion prohibitions and conservative Republicans’ opposition to doing anything that could be seen as propping up the ACA.  The stabilization reforms could still come up as a stand-alone bill for a vote in the Senate this year, but it’s hard to see the parties getting past their current differences.  So more instability and higher premiums for many individuals look likely in the short-term, especially for those who don’t qualify for federal subsidies.  And some of the regulatory reforms being planned by the Trump administration could exacerbate the problem.

Beyond the parties’ policy differences, politics is also playing a role in the impasse. While there is fear on both sides about the electoral consequences of failing to head off another year of premium hikes that would hit just ahead of the November elections, each party also appears to see an advantage in continuing to make the ACA and health care a defining issue – and think voters will blame the other party for whatever goes wrong.  We’ll see who’s right.

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