Category Archives: ACA

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Last week, Senators Johnny Isakson (R-GA) and Chris Coons (D-DE) introduced S. 2303, joining Representatives Billy Long (R-MO) and Kurt Schrader (D-OR) who introduced H.R. 4575 last month. These bills would remove independent agent and broker compensation from the definition of “administrative expense” from the Medical Loss Ratio (MLR) calculation. The MLR regulation has caused carriers to reduce the commissions of agents and brokers, which has led to a reduction in consumer access to crucial services provided by insurance producers on a daily basis. Treating broker commissions as a pass-through expense will protect jobs and preserve the critical role of agents and brokers and ensure that insurers would be better equipped to compete in the marketplace.

NAHU has long advocated that the MLR should treat broker commissions as pass-through expenses for the following reasons:

  • Commissions are set by insurers but not paid by the insurers. Commissions are paid by the client and passed through carrier to the agent. While carriers currently collect agent compensation along with the regular premium, these funds are passed directly to the broker.
  • Commissions are paid to health insurance agents and brokers for the enrollment and on-going service they provide to consumers throughout the duration of their policy.
  • As a result of agent compensation being included in the cost of MLR, brokers servicing the individual and small business markets are seeing their compensation slashed by as much as 50%.
  • Individuals and employers across the country are relying on their health insurance agent to help them understand and comply with health reform for their business, their employees, and themselves.
  • The MLR has caused serious harm to the insurance market as it has inhibited the number of insurers willing to write health insurance in the individual and small-group markets.

Contact your senators and representative. Send an Operation Shout today asking your member of Congress to cosponsor H.R. 4575 and senators to support S. 2303! You can also call your legislators at the numbers below.

Take Action

Don’t want to send an email? No problem, you can also reach your senators by phone:
Rep. Larry Bucshon (R) can be reached at (202) 225-4636.
Sen. Joe Donnelly (D) can be reached at (202) 224-4814.
Sen. Todd Young (R) can be reached at (202) 224-5623.

Trump cutting off subsidy payments poses tough decisions for insurers

By Harris Meyer  | October 13, 2017

President Donald Trump’s decision Thursday to end federal cost-sharing reduction payments to insurers puts the spotlight on Republican and Democratic senators who are trying to craft a bill to fund those payments and stabilize the individual insurance market.

But it’s not at all clear Sen. Lamar Alexander, the Republican chairman of the Senate Health, Education, Labor and Pensions Committee, and Sen. Patty Murray, the senior Democrat on the panel, will be able to reach a deal or that they will be able to get it through the full Senate, let alone the more conservative House. That’s because many Republicans still yearn to repeal and replace the Affordable Care Act and balk at doing anything to shore it up.

The federal payments to insurers for cost-sharing reductions make coverage more affordable for low-income people by reducing deductibles and copayments.

Some conservatives celebrated Trump’s CSR funding cutoff, which grew out of a lawsuit filed by House Republicans in 2014 alleging the Obama administration was unconstitutionally making payments that were never appropriated by Congress. “The Constitution finally takes precedence over Obamacare,” wrote conservative analyst Chris Jacobs.

Murray called Trump’s move “sabotage” and expressed hope for a bipartisan deal to restore the CSR funding, which insurers and many experts say is the key to steadying the individual insurance market. “I continue to be optimistic about our negotiations and believe we can reach a deal quickly,” she said.

Nineteen state attorneys general, including those from California, Connecticut, Kentucky, New York and Massachusetts, announced Friday that they suing the Trump administration to block the CSR funding cutoff.

In August, the Congressional Budget Office projected that not making the CSR payments would boost premiums for silver plans by 20% in 2018. Ironically, it also would increase the federal budget deficit by $194 billion over 10 years because ACA premium subsidies would rise to cover the cost of the higher premiums, the CBO noted.

Insurers and other healthcare industry groups, along with state insurance regulators, urged that the payments be restored.

“We hope Congress can step in to solve the CSR problem and stabilize the marketplace, and that cooler heads will prevail than are currently in charge in the administration,” said Margaret Murray, CEO of the Association for Community Affiliated Plans, which represents safety net insurers.

Other major insurance groups, including America’s Health Insurance Plans and the Blue Cross and Blue Shield Association, issued similar pleas for bipartisan congressional action to continue funding for the cost-sharing subsidies. Those payments to insurers reduce deductibles and copayments for nearly 6 million low-income exchange plan members enrolled in silver plans.

Meanwhile, insurers are anticipating a big financial hit for the final three months of 2017 from the loss of the CSR payments. The Association of Community Affiliated Plans said the loss of the CSR funding will cost its member plans about 15% of premium revenue.

It’s widely anticipated that insurers will sue the government to recover the CSR funds promised by the ACA, as some insurers have successfully sued to recover ACA risk-corridor funding. “Plans are definitely exploring that,” Murray said.

Beyond that, insurers will face the tough decision of whether to stay in the ACA marketplaces in 2018, given the turmoil created by the Trump administration’s healthcare actions widely seen as undermining the law.

“We have not heard of any plans pulling out in 2018,” Murray said. “But they have to take a hard look at the actuarial risk as well as the political risk of what else the administration might do to sabotage the market.”

Some predict the true reckoning will come in 2019, when insurers must decide whether they can compete with the new deregulated plans Trump is pushing to establish through an executive order he issued Thursday. In that order, he directed federal agencies to issue new rules giving individuals and businesses access to cheaper health plans with fewer benefits and consumer protections.

“I think 2019 is a real tossup depending on how the industry responds to that executive order,” said John Baackes, CEO of LA Care Health Plan in Los Angeles.

For 2018, insurers in most states will be protected financially from the CSR funding cutoff because they were instructed by regulators to set their 2018 premiums assuming the Trump administration would end the payments, which are projected to total $10 billion next year.

In Wisconsin, whose insurance department Thursday announced a 36% average premium increase in the individual market for 2018, the CSR funding cutoff was baked into the new rates, said J.P. Wieske, the deputy insurance commissioner. “The court determined these payments aren’t legal, so what else is President Trump going to do,” he said.

But there are concerns about insurers in at least 10 states, including Alaska, Arkansas, Maryland, Oregon and Washington, where carriers were told to set rates assuming they would receive the CSR payments, according to the National Association of Insurance Commissioners. In those states, there will be a scramble to redo the rates.

“Relatively small insurers may say, ‘If you don’t let me load the CSRs into the rates or allow me to withdraw, I may be insolvent by the middle of next year,’ ” said Joel Ario, managing partner at Manatt Health and a former Obama administration official. “That could be compelling to regulators.”

Baackes said his plan and others in California won’t be directly affected in 2018 by the CSR cutoff because the state required insurers to increase rates for silver plans by about 12% to offset the funding loss. That upped LA Care’s total increase on average to 23%.

He’s more worried that Trump’s CSR decision will be misunderstood by consumers as ending the ACA’s premium tax credits, thus discouraging uninsured people from signing up. “People will be confused, and this will dampen enrollment among people who would otherwise consider buying on the exchange,” he said.

Ario called the CSR funding cutoff “the biggest wound yet to the stability of the ACA marketplaces.”

One source of continuing strength for those marketplaces is they are supported by the ACA premium tax credits, which enable millions of people to continue buying coverage.

But if the Trump administration keeps taking actions to unravel the ACA markets, such as ending enforcement of the law’s requirement that everyone buy insurance, “at some point the patient starts going into cardiac arrest,” he said.

“I don’t think we’re there yet, but the CSR cutoff and Trump’s executive order are pretty major hits. It definitely makes it harder to move forward effectively unless we come up with a bipartisan solution.”

Continue reading Trump cutting off subsidy payments poses tough decisions for insurers

NAHU Press Statement on Graham-Cassidy Proposal

NAHU has met with bipartisan leadership in the House and Senate, as well as other industry stakeholders, to promote bipartisan measures for market stability. Unfortunately, we do not believe the current Graham-Cassidy proposal serves to stabilize the individual health insurance market and we have significant concerns that the lack of adequate guardrails for states applying for waivers could create instability in the employer-sponsored health plan market.

The proposal would dramatically restructure the ACA …read more….


Senate GOP tries one last time to repeal Obamacare

From Politico….

“Obamacare repeal is on the brink of coming back from the dead.

Senate Majority Leader Mitch McConnell (R-Ky.) and his leadership team are seriously considering voting on a bill that would scale back the federal government’s role in the health care system and instead provide block grants to states, congressional and Trump administration sources said. ”

Read More



The Senate Voted 49-51 to Reject the Health Care Freedom Act



Shortly after 1:30 a.m. today, the Senate voted 49-51 to reject the Health Care Freedom Act (HCFA), a “skinny repeal” of the ACA. The pared-down version was attempted after previous efforts to pass a more sweeping repeal of the law have failed. Senate Majority Leader Mitch McConnell (R-KY) began floating the idea early in the week before ultimately releasing the text of the bill at 10 p.m. Thursday, just two hours before the vote. Republican Senators Susan Collins (ME), Lisa Murkowski (AK), and John McCain (AZ) joined all Democrats in voting no, while all other Republicans voted in favor. With the failure of this vote, congressional Republicans will no longer be able to use the budget reconciliation process to repeal provisions of the ACA until the next fiscal year and will instead have to move legislation under regular order that would require 60 votes for passage in the Senate. More details on the activity in the Senate this week will be in today’s Washington Update.

NAHU supports efforts that could potentially attract bipartisan support from legislators to help stabilize the marketplaces. We have long advocated for making piecemeal changes to the ACA that can achieve bipartisan support and therefore pass Congress and be signed into law. NAHU has been able to garner bipartisan support on a number of smaller changes to the ACA, including a delay to the Cadillac/excise tax and Health Insurance Tax, and repeal of the small-group expansion and auto-enrollment provisions, the law’s 1099 requirement, the long-term care CLASS Act and the $2,000/4,000 deductible cap. Without a clear plan for moving a larger package to repeal and replace significant portions of the ACA, NAHU will continue to advocate for changes to the law where lawmakers can find consensus in order to stabilize the market.

Finally, until any legislation or regulations are formally enacted into law, the ACA remains the law of the land and all of its mandates, penalties, and enforcement remains in effect and your employer and individual clients should continue to follow all rules and regulations that are currently in place.


McConnell: Senate will try to repeal ObamaCare with delayed replacement

Senate Majority Leader Mitch McConnell (R-Ky.) said on Monday night the Senate will try to separate the ObamaCare repeal and replacement efforts, closing the door on the current GOP healthcare legislation.

“In the coming days, the Senate will vote to take up the House bill with the first amendment in order being what a majority of the Senate has already supported in 2015 and that was vetoed by then-President Obama: a repeal of Obamacare with a two-year delay to provide for a stable transition period,” McConnell said in a statement.

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McConnell delays August recess

Washington Post July 11 at 5:53 PM

Senate Majority Leader Mitch McConnell announced Tuesday that he would cut the chamber’s August recess in half, saying the GOP needed more time to achieve its legislative goals given the protracted negotiations over health-care legislation and continued opposition from Democrats on several fronts.

“To provide more time to complete action on important legislative items…Read More