CMS Final Rule Would Increase Costs for Moderate-Income Families and Reduce Open Enrollment

RulesFollow up from blog posted February 21, 2017

Yesterday afternoon, the Centers for Medicare and Medicaid Services (CMS) issued a final rule claiming to stabilize the Affordable Care Act insurance markets. In fact, it does just the opposite.

HCFANY and thousands of other consumer and provider groups submitted comments in opposition to the proposed version of the rule because many of its provisions would have harmed consumers. However, the rule was finalized largely as proposed.

The final rule reduces the open enrollment period for individual and small group health insurance plans from 13 weeks to just six weeks, which gives consumers significantly less time to shop around for and enroll in the best plan for them.

The final rule also decreases the allowable actuarial values for health plans at each metal level, which could reduce the advanced premium tax credits (APTCs) that help make health plans purchased through the Marketplace more affordable for moderate-income individuals and families. According to an analysis from the Center on Budget and Policy Priorities, even a 2 percent decrease in actuarial value could result in a $327 reduction in APTCs for an individual.

The final rule will make it more difficult for consumers to qualify for and enroll in health coverage through special enrollment periods, which could lead to gaps in coverage and deter enrollment.

Currently, it is unclear how this rule will affect New York because state officials are still studying it closely. Come back to HCFANY next week for more information.

HCFANY worked hard this year on a series of important priorities during this budget session. Governor Cuomo’s statement on the final enacted budget can be found here.

Here is a quick summary of how we did:

Full funding for Community Health Advocates (CHA)

HCFANY Recommendation: Provide $4.75 million in funding for CHA to help people and small businesses obtain, use, and keep their health insurance coverage.

Result: The final budget included $3.5 million for CHA – $2.5 million from the Executive and $1 million from the Assembly. The total funding is an increase of $250,000 from the past year.

Expansion of Child Health Plus (CHP) to Age 29

HCFANY Recommendation: Increase the age limit for CHP from 19 to 29 to create an affordable coverage option for young adults who are not eligible for subsidized health insurance because of their immigration status.

Result: This measure was not included in the enacted budget.

Essential Plan Premiums and Cost-Sharing

HCFANY Recommendation: HCFANY opposed increasing premiums and cost-sharing for consumers enrolled in the Essential Plan (EP), New York’s Basic Health Program for consumers with incomes just above the Medicaid limit.

Result: There were no changes to EP premiums, and there will be no increases in cost-sharing through at least March 2018.

Medicaid Beneficiary Protections

HCFANY Recommendation: HCFANY opposed the following threats to Medicaid beneficiaries: (1) increase in copayments for preferred, non-preferred, and over-the-counter drugs; (2) elimination of spousal/parental refusal, a reduction of resources that spouses and parents of people in managed long-term care or nursing homes can keep; and (3) repeal of “prescriber prevails.”

Result: (1) The budget increased copayments for preferred prescription drugs from $1 to $2.50 and decreased copayments for non-preferred drugs from $3 to $2.50. There were no changes to copayments for over-the-counter drugs; (2) there were no changes to spousal refusal; and (3) there were no changes to “prescriber prevails.”

Enhanced Reimbursement for Safety Net Hospitals

HCFANY Recommendation: Provide an enhanced reimbursement rate for hospitals that: (1) have at least 50 percent Medicaid or uninsured patients; (2) have at least 40 percent of inpatient discharges covered by Medicaid; (3) have no more than 25 percent of patients commercially insured; and (4) are facilities that are part of the state’s five public health systems or federally designated as critical access or sole community hospitals.

Result: The final budget includes $40 million for safety net hospitals that meet the criteria above for fiscal year 2018.

Health Care Regulation Modernization Team

HCFANY Recommendation: Designate at least 20 percent of the seats on this team for health care consumers or advocates and require consumer representation on all team subgroups. Limit the team’s role to making recommendations that would then be taken up by the legislature.

Result: The Health Care Regulation Modernization Team was not included in the final enacted budget.

UrgentLate last month, the American Health Care Act (AHCA), which would have devastated the Medicaid program and left millions uninsured, was pulled from the House floor. According to an article in today’s New York Times, the majorities in Congress are discussing a proposal to move forward with the bill.

In addition to all of the harmful provisions in the original AHCA, the new proposal would eliminate community rating, which requires insurers to charge the same price regardless of health status, and the requirement that insurers cover a standard minimum benefits package, known as the Essential Health Benefits. These two changes would effectively get rid of the protections for people with pre-existing conditions and allow insurers to put annual and lifetime caps on payment for covered benefits.

There could be a vote to pass a new bill with these amendments as early as this Friday. Please call your Members of Congress at 844.898.1199 and tell them “Don’t take away our health care.”

Red AlertYesterday, Members of the House of Representatives introduced Affordable Care Act (ACA) repeal and replacement legislation in the Ways and Means and Energy and Commerce Committees. According to a blog post from Health Affairs, the committees will begin markup of the bills tomorrow, March 8, and the House is hoping to pass a repeal and replacement bill in the next three weeks.

The two bills would not repeal the ACA entirely. They would leave in place many of the ACA’s insurance reforms including: coverage for people with pre-existing conditions; guaranteed availability of coverage; coverage of young adult children under their parents’ health plans until age 26; and annual out-of-pocket maximums. The bills would also leave in place certain consumer protections including the ban on discrimination on the basis of race, nationality, disability, age, or sex.

However, there are a number of provisions in the two bills that would harm consumers. These include:

Gutting Medicaid

  • Medicaid would be transitioned to a per capita cap program by 2020. This means that the federal government would provide a fixed amount of money to each state per enrollee, rather than a percentage of the total costs per enrollee.
  • Federal funding for Medicaid expansion would be eliminated.
  • States would be provided incentives to re-determine Medicaid eligibility more frequently. In New York, many Medicaid enrollees have 12-month continuous Medicaid coverage.

Undermining Coverage Gains

  • Individuals would no longer face a tax penalty for not having coverage. Instead, premiums would go up by 30 percent as a penalty for consumers who do not maintain continuous coverage during the 12 months preceding enrollment in a new plan.
  • Employers would no longer be penalized for not offering coverage to their employees and dependents.

Eroding Marketplace Affordability

  • States would be allowed to charge older consumers premiums 5 times greater than those of younger consumers. Currently, insurers are only allowed to charge only consumers 3 times as much as younger consumers.
  • The current income-based advanced premium tax credits would be replaced with tax credits based on age. This means that a low-income consumer would receive the same tax credit as a wealthy consumer in the same age bracket.
  • Cost-sharing reductions for eligible consumers with incomes under 250 percent of the Federal Poverty Level would be eliminated after 2019.
  • Plans sold through the Marketplace would provide less coverage for health services, and consumers would be responsible for more out-of-pocket costs.

Reducing Access to Family Planning Services

  • Planned Parenthood would lose federal funding for one year if the bills become law.

New York Representatives Chris Collins and Paul Tonko serve on the Energy and Commerce Committee, and Representatives Tom Reed and Joe Crowley serve on the Ways and Means Committee. If you or someone you know would be affected by the changes proposed in these two bills, please call your elected Representatives today at 1-866-426-2631.