Health Reform Legislative and Regulatory Changes on the Horizon

Health Reform Legislative and Regulatory Changes on the Horizon

  • On January 13, 2017

The 115th Congress has been sworn in and they have already taken some initial action to change the health care landscape.  On Tuesday, January 3, Senator Mike Enzi (R-WY) Chairman of the Senate Budget Committee formally started the process by introducing a resolution that would allow for the repeal of sections of the Affordable Care Act that deal with federal revenue and spending through a budget reconciliation measure.  The Senate and House both passed the budget on January 12 and 13th respectively. This procedural maneuver will allow the repeal effort to eventually clear the upper chamber with 50 votes, instead of the normal 60-vote margin needed to prevent a filibuster.

Now the relevant congressional committees will move forward with drafting the actual repeal legislation and advancing it to the House and Senate floors.  The deadline for the committees to finish drafting the repeal legislation is January 27 according to the budget text, but Congressional leaders have indicated that this date is merely a placeholder noting the earliest bill text may be released.  President-elect Trump and House Speaker Paul Ryan have both indicated that their legislation will not be released until after Health and Human Services (HHS) Secretary Designee Tom Price has been confirmed.  In order to buy time to craft a more thoughtful proposal, some members of Congress are pushing to delay until early March.

While all of this may seem like it will yield fast changes to health reform, it is important to keep in mind that reconciliation in the Senate can only contain provisions that affect the revenues and outlays of the United States and cannot contain “extraneous provisions” that only incidentally affect revenue and expenditures.   This means there are serious limits regarding what the repeal bill can contain that doesn’t require 60 bipartisan votes to advance through the Senate.  So, for example, the tax credit provisions of the ACA, the Medicaid expansion, and taxes and fees built into the law would fall within the realm of revenue-related provisions.  But insurance market reforms, like age rating or preventive care mandates or actuarial value requirements likely would not.  Plenty of provisions, like the employer mandate and the individual mandate fall into grey areas.  The fines imposed on employers and individuals for non-compliance are related to revenue, but what about the requirement to offer and/or maintain coverage itself?  The answers to these questions will be decided not by Congress or the President, but instead by the non-partisan Senate Parliamentarian.

In addition to legislative changes, the Trump Administration also indicated that they would be moving forward to make health reform regulatory changes as soon as possible after being sworn in.  Vice-President Elect Mike Pence, in speaking to reporters on Capitol Hill on January 4, proclaimed “we’re working now on a series of executive orders that will enable that orderly transition to take place even as Congress appropriately debates alternatives to and replacements for ObamaCare.”  Changes to essential health benefit coverage requirements and perhaps simplifying employer-reporting procedures for the 2017 plan year (reporting to be done in 2018) have been identified as key priorities, among others.

However, the procedural limits on federal regulatory action require that even substantial regulatory changes that may be made by the Trump Administration are unlikely to have much impact on employer plan structures that are already in place for 2017.  All regulations that are already finalized prior to a change in Presidential administration cannot be simply set aside by an incoming administration.  Existing regulatory requirements can be amended, but any changes must be based on the underlying law and they must be made according to the existing regulatory review process, which can take several months.   Regulations based on new legislation, such as any health reform replacement measure, also have to go through the traditional regulatory process, which takes months.  Regulation changes also generally contain an implementation window for affected employers and health plans and are rarely imposed on employers on an immediate basis.  Congress may elect to use the Congressional Review Act to review and completely strike down certain recently released “major rules,” but most health reform requirements do not meet the criteria for the Congressional Review Act to apply.

Bottom line, all current laws and regulations governing employer health plans remain in place for now, and any changes will take time to implement.  While we may not know exactly what the future holds in terms of health reform, one thing does remain constant– Kistler Tiffany Benefits will keep you appraised of regulatory and legislative developments that will impact your benefit plans as soon as they occur.

By Jessica Waltman, Special Contributor

Jessica Waltman is a health reform strategist, with more than 20 years of experience in health insurance markets and health policy. She is the former Senior Vice President, Government Affairs, for the National Association of Health Underwriters.

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