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By Sara Hansard
Sept. 8 — People enrolled in failed nonprofit health plans created under the Affordable Care Act would be exempt from paying penalties if they didn't re-enroll in qualified health plans under legislation approved Sept. 8 by a House committee.
The House Ways and Means Committee approved by voice vote H.R. 954 introduced by Rep. Adrian Smith (R-Neb.), which the Joint Committee on Taxation estimates will cost a mere $4 million over a 10-year period beginning in 2014. Democrats objected to the legislation, saying it isn't clear how many people would benefit, because people who lose coverage are eligible to re-enroll in plans using special enrollment periods, or they could qualify for an exemption from the ACA's penalty for not having minimum essential coverage based on financial hardship.
The failure of 16 of the 23 Consumer Operated and Oriented Plans (CO-OPs), which received $1.7 billion in federal loans, has been one of many contentious points between Republicans and Democrats. About 750,000 people were in CO-OP plans that have failed. Republicans argued that the bill is narrowly tailored to ensure that people who enrolled in the government-subsidized CO-OPs that failed between open enrollment periods wouldn't have to pay a penalty if they didn't get coverage for the remainder of the year.
It isn't known when the full House may take up the legislation, but committee spokeswoman Lauren Aronson told Bloomberg BNA Sept. 8 that Congress is only in session for about three weeks before leaving to campaign for the elections, so consideration of the bill is likely to be soon.
“Hundreds of thousands of American families depended on CO-OP plans for their health insurance,” Ways and Means Chairman Kevin Brady (R-Texas) said. “Now the plans they purchased have been terminated through no fault of their own. And, if that's not painful enough, these Americans—and perhaps many more if additional CO-OPs collapse—could be forced to pay the individual mandate tax penalty for not having coverage. This is just wrong.”
Ranking member Sander Levin (D-Mich.) said the bill is “part of an overall attack on ACA” by Republicans.
Levin sent a letter to Treasury Secretary Jacob Lew and Department of Health and Human Services Secretary Sylvia Mathews Burwell asking for more information on the impact of the midyear CO-OP closures.
Andrew Slavitt, acting administrator of the Centers for Medicare & Medicaid Services, replied Sept. 7 that five of the 16 failed CO-OPs failed before the end of the coverage year. “We are working closely with the relevant state Departments of Insurance (DOIs), the primary regulators of insurance in the states, to communicate quickly and effectively with consumers to notify them of their eligibility for a Special Enrollment Period (SEP) and to help them enroll into new coverage,” Slavitt said.
Rep. Jim McDermott (D-Wash.) said congressional Republicans cut funding for the CO-OP program by nearly two-thirds in 2013 and in 2014 blocked the administration from shifting discretionary funding under the ACA's risk corridor program to protect insurers from high-cost claims, which undermined the success of the CO-OPs.
Smith, the author of the bill, said he had heard from about 300 consumers in his district after CoOportunity Health, which operated in Iowa and Nebraska, failed in 2015, many of whom were concerned they would have to pay tax penalties for not having coverage as well as having to pay annual deductibles twice. The bill is “about ensuring consumers aren't caught in the crossfire.”
Rep. Xavier Becerra (D-Calif.) said that not requiring people who lost coverage through CO-OPs to re-insure would create a “two-tiered system” because people with health problems would be more likely to find new insurance, while people without medical problems would have an incentive not to seek coverage because they wouldn't be penalized.
“This bill would provide the wrong incentives to Americans,” Becerra said. “We want people to get and keep insurance,” he said, “not encourage people to go bare.”
On Sept. 7, Republican Sens. John McCain (Ariz.), Tom Cotton (Ark.), Ben Sasse (Neb.), Jeff Flake (Ariz.), Ron Johnson (Wis.) and John Barrasso (Wyo.) introduced the Protection from Obamacare Monopolies Act, S. 3296, which would exempt people who lack choices from the ACA's insurance coverage mandate next year (174 HCDR, 9/8/16).
About 19 percent of individuals buying health plans on the ACA’s exchanges may have only one insurer option for next year, according to the Kaiser Family Foundation. That number is up from 2 percent this year.
Pinal County, Ariz., had been the first known exchange market to lose all carriers for 2017. On Sept. 8, Arizona insurance department spokesman Stephen Briggs confirmed in an e-mail to Bloomberg BNA that Blue Cross Blue Shield of Arizona will offer plans on that area's exchange.
The Ways and Means Committee also approved by voice vote the Dialysis PATIENTS Demonstration Act (H.R. 5942) sponsored by Rep. Todd Young (R-Ind.). The bill would establish a voluntary pilot program within Medicare for end-stage renal disease patients to get coordinated care while continuing to receive current benefits.
More than 650,000 people receive dialysis a year to treat kidney failure, and the bipartisan legislation would save patients time, money and multiple trips to providers' offices while producing better health outcomes, Young said.
McDermott was among the few who objected to the bill, saying that “nonprofit kidney care facilities worry this bill would unfairly benefit the big for-profit companies,” such as DaVita Inc., at the expense of the small providers. The nonprofits would not have the capital necessary to bear the risk and participate in the coordinated care models under the bill, he said.
To contact the reporter on this story: Sara Hansard in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Kendra Casey Plank at email@example.com
Information on the bills marked up is at http://waysandmeans.house.gov/event/markup-proposals-improve-health-care-system-americans/.
Levin's letter to Lew and Burwell is at http://src.bna.com/ipL.
Slavitt's reply is at http://src.bna.com/ipM.
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