On Christmas Eve in 2009, Secretary of State Hillary Clinton was awake before dawn to personally monitor a critical moment in the nation’s history.
But Mrs. Clinton, the country’s top diplomat, was not observing a covert operation in the Middle East or tracking pivotal negotiations with a foreign power. Her television was tuned to C-Span, and she was watching the Senate vote on President Obama’s landmark health care law.
Emails released last week by the State Department that were found on Mrs. Clinton’s private server show that she was keenly interested in the administration’s push to win passage of the health care law.
People are starting to get excited about another ObamaCare work-around: The section 1332 waiver. This refers to a section of ObamaCare that allows states great flexibility in how they deliver ObamaCare within their borders. The curious thing about section 1332 waivers is that they can only be issued as of January 1, 2017.
Why? Why not allow states to get section 1332 waivers as of October 2010, when ObamaCare’s first regulations took effect? Or January 2014, when the gushers of tax credits began to flow through the exchanges? Who knows? Maybe the administration just thought they needed a few years for the cement around ObamaCare to solidify.
Newt Gingrich and Tom Daschle have co-authored a report on how states can use section 1332 waivers to execute policy preferences either to the left or the right of ObamaCare. Anne Phelps of Deloitte & Touche LLP has also written a report describing the benefits of using a section 1332 waiver.
Unfortunately, while many 2016 presidential candidates have backed the “repeal” part of the “repeal and replace” equation, few have addressed how they would start over.
They would do well to follow the advice of The Heritage Foundation. The think tank’s soon-to-be-released policy handbook for candidates, Solutions 2016, lays out the “then what” reforms candidates should be talking about:
- Remove regulatory and policy obstacles that discourage choice and competition.
- Encourage personal ownership of health care by reforming the tax treatment of health care.
- Transform health care coverage for low-income Americans by reforming Medicaid as a true safety net and glide path out of poverty.
- Modernize Medicare program to meet the demographic, fiscal, and structural challenges that threaten to bankrupt the system.
There were two notable Affordable Care Act rules this week. A final rule for “Covered Outpatient Drugs,” which has been planned since the fall of 2010, contains $330 million in new annual costs, in addition to 3.1 million hours of paperwork. The 189-page rule regulates drug pricing, confidentiality, rebate payments, and requirements for states.
The administration also finalized “face-to-face” provisions under the ACA. The rule would require health care providers to document face-to-face encounters with Medicaid recipients when delivering health services. The rule imposes $23 million in annual costs and 190,000 paperwork burden hours.
Since passage, based on total lifetime costs of the regulations, the ACA has imposed costs of $50.1 billion in state and private-sector burdens and 177.9 million annual paperwork hours (167 million from final rules).
High-deductible health plans (HDHPs) are increasing in prevalence in both the group and individual markets. In the group market, rising insurance costs make HDHPs more attractive to employers. Employers now spend an average of $5,179 and $12,591 on health insurance premiums for their employees in individual and family plans, respectively. A recent Henry J. Kaiser Family Foundation survey of employers shows that deductibles have increased 67 percent since 2010. Nearly one-quarter of workers are enrolled in an HDHP, up from 4 percent in 2006. Nearly half of workers are covered by an insurance plan with a general annual deductible of at least $1,000 for individual coverage.
In the individual market, almost 90 percent of enrollees in Affordable Care Act Marketplaces are in a plan with a deductible above the amount that qualifies a plan as an HDHP: $1,300 for an individual and $2,600 for a family (not including cost-sharing reductions) in 2015. The increasing number of enrollees in and prevalence of HDHPs raises a number of policy questions.
President Obama’s Final Budget Proposal includes:
MEDICAID EXPANSION
The budget will include three years of federal funding to 19 state governments that passed up an earlier offer to expand Medicaid coverage for more than 4 million low-income people.
TWEAK TO “CADILLAC TAX”
Obama will ask for tweaks to a tax on certain health insurance plans that is unpopular with labor unions.
President Barack Obama is having a tough time winning friends for his Cadillac tax.
His plan to dial back the unpopular ObamaCare tax on high-cost health plans, to be detailed in the fiscal 2017 budget he’ll release Feb. 9, has won him no applause from employers, labor unions or health insurers. The tax still must be repealed, they say, not merely modified.
“The ‘Cadillac tax’ cannot be fixed,” James Klein, president of the American Benefits Council, a nonprofit representing employers, said in a statement. “We’re glad the administration recognizes the ‘Cadillac tax’ is seriously flawed. But its impact in high cost areas is just one of its many problems.”
he Cadillac tax was apt to be politically unpopular. It was particularly apt to be unpopular with politically active groups, such as unions. It therefore seemed somewhat unlikely to us that the Cadillac tax would ever be actually allowed to take effect. Don’t be alarmist, we were told; the administration knows that all the parts of this law hang together. It will not start disassembling the complicated structure it spent so much time and political capital putting together.
And to be sure, the administration has not capitulated in the face of considerable political pressure. Well, it has not capitulated much. The White House did agree to push the implementation date back to 2020 from 2018. That ObamaCare’s principle architects want to be safely away from 1600 Pennsylvania Avenue before the Cadillac tax is implemented gives you a pretty good idea of how politically viable it is.
The House is expected to vote in the coming week on legislation to roll back some menu labeling requirements of the Affordable Care Act.
The Common Sense Nutrition Disclosure Act, introduced by Reps. Cathy McMorris Rodgers (R-Wash.) and Loretta Sanchez (D-Calif.), would exempt most grocery stores, convenience stores, gas stations and movie theaters from having to provide calorie counts for prepared food items.
The House bill would only apply the nutrition rule to establishments that derive more than 50% of their total revenue from the sale of food.
On February 5, 2016, the Centers for Medicare and Medicaid Services issued a guidance at its REGTAP.info recognizing a new special enrollment period (SEP), while the Departments of Labor, Treasury, and HHS issued a new guidance on student health plans.
Insurers have been sharply critical of SEPs in recent weeks, claiming that individuals who enroll through SEPS are unusually high cost and that SEP enrollees unbalance the risk pool. CMS has stated that it intends to tighten up on SEPs that might be subject to abuse. The agency retains statutory and regulatory authority, however, to recognize new SEPs where appropriate.
The new SEP recognized on February 5 is available for consumers who are without marketplace coverage because of their failure to file their taxes and reconcile advance premium tax credits (APTC) for 2014.