Like many, the Friends…With HEALTH Benefits Blog took some time at the end of 2019 to celebrate the holiday season with family and friends. Unfortunately, all three branches of the federal government missed that memo. While we were off exploring the Caribbean (Jen), and introducing a new puppy to our family (Jessica), quite a few things happened in the health policy world. If you (like us) are afraid you might have missed something, here’s a quick and dirty list of the most important developments. We also put together a separate, smaller list of policy actions that did not make it across the finish line before the end of 2019.
- The 5th Circuit Court of Appeals ruled in Texas v. United States. The three-judge panel found the Affordable Care Act’s (ACA) individual mandate unconstitutional because it is no longer a “tax.” But they didn’t strike down the whole law. Instead, the appeals court kicked the can back to U.S. District Court, so the judge there can determine what, if any, parts of the ACA can separate from the individual mandate. For now, the rest of the law remains in force, and we all get to wait to see what District Court Judge Reed O’Connor does with it. It could take months for him to decide, and then the appeals process will start all over again. There’s a small chance the Supreme Court of the United States will decide to take up the case now, but in all likelihood, we won’t know the fate of the ACA until after next year’s Presidential election.
- The Excise, HIT, and Medical Device Taxes went away. In the year-end appropriations and tax bill, R. 1865, Congress repealed three controversial ACA taxes—the excise tax on high-cost health plans (aka the “Cadillac tax”), the health insurance provider fee (aka the “HIT tax”), and the medical device tax. The Cadillac tax was delayed twice previously and has never been in effect, but the HIT tax and medical device tax have both been in place intermittently since 2014. As a national premium tax, the HIT costs the average family with fully-insured group health insurance upwards of $500 a year. It will still be a factor in 2020 premium costs, but after that, it will go away for good!
- The PCORI fee lives on for another ten years. Through that same appropriations bill, Congress extended the ACA’s Patient-Centered Outcomes Research Institute (PCORI) fee on health plans through 2029. The fee pays for a federal research effort to give consumers and providers information about the effectiveness of various medical treatments. Initially, it expired after the 2019 tax year, but this measure extends it through 2029 to keep the institute running. Health insurers pay the PCORI fee for individuals and companies with fully-insured private coverage. Businesses with self-funded coverage must pay the excise tax annually themselves by July 31, using IRS Form 720.
- The Trump Administration unveiled a prescription drug reimportation plan. On December 18, 2019, the federal Department of Health and Human Services and the Food and Drug Administration unveiled a proposed rule that would allow states to partner with pharmacies and drug wholesalers on programs to import prescription drugs from Canada. The federal government would need to approve each program, and to qualify each would have to demonstrate significant consumer cost-savings. The Trump Administration also released draft guidance for drug manufacturers to allow the importation of drugs that are FDA-approved and manufactured abroad for foreign sale. Neither proposal is final yet. The Administration is seeking public comments on both.
- People who buy individual coverage through an exchange in many states will get two separate monthly premium bills—one for abortion coverage and one for everything else. The ACA Exchange Program Integrity Rule, finalized by the Centers for Medicare and Medicaid Services (CMS) on December 27, 2019, contains mostly technical changes. However, it also requires health insurers that offer coverage through an exchange that covers certain abortion services to send consumers two entirely separate monthly bills, starting in July of 2020. One statement may only include the amount of the premium attributable to those abortion services, and the other bill must reflect the rest of the person’s premium. People must pay both bills monthly or risk losing coverage for nonpayment of premiums. More guidance is coming on this controversial and costly rule, but until then, people who buy individual health insurance coverage need to be aware that they aren’t getting two bills by mistake, and that they need to pay them both!
- Open enrollment for 2020 ended, and it seems like fewer people got coverage than the year before. The numbers are not final yet, but CMS estimates 3 million people enrolled in federal exchange-based individual coverage for 2020, compared to approximately 8.5 million people in 2019. These numbers do include people who got an enrollment extension because HealthCare.Gov was having technical difficulties on December 15.
- CMS released a draft actuarial value (A.V.) calculatorand methodology for applicable large employers to use during the 2021 plan year. They are accepting public comments on it through January 21, 2020, but it is mostly the same as last year’s calculator. The agency also released new draft guidance for health insurers and states concerning the approval of qualified health plan rates for 2021.
What Didn’t Happen:
- Congress failed to finalize any legislation to address prescription drug prices or surprise balanced billing. Despite a lot of talk and some bipartisan action on both issues, Congress could not come to a year-end agreement on legislation to address either of these cost-drivers. Maybe in 2020?
- We still don’t have a bunch of promised federal health care regulations. The 2021 Notice of Benefit and Payment Parameters, an annual catch-all rule that covers private plan and exchange requirements, should arrive any time now. So should the annual regulation covering Medicare and Medicare Advantage plan requirements for 2021. We are also waiting on new rules from the Equal Employment Opportunity Commission on wellness program safe harbors, a regulation on grandfathered plans, and new requirements related to the Family Medical Leave Act.
- There was no ruling in the case challenging AHPs. In November, the Federal Court of Appeals for the District of Columbia Circuit heard oral arguments in the lawsuit challenging the validity of a Trump Administration rule that created a new type of Association Health Plans (AHPs). A lower court invalidated the regulation earlier in 2019, putting new AHP plans in limbo. Some experts thought the D.C. Circuit would rule in the matter before year-end, but we will have to wait until 2020 for the appeals court ruling. If the case ultimately goes to the Supreme Court of the United States for resolution, that won’t be until 2021.