ACA Update

by Christoper E. Condeluci, Principal and sole shareholder of CC Law & Policy PLLC in Washington, D.C.

Texas District Court Judge Confirms That the ACA Will Remain In Place Through the Appeals Process

In my last post before the holidays, I explained that the Texas District Court ruling – finding that the ACA is unconstitutional – has NO binding effect. Why? Because the judge’s ruling was merely a “declaratory judgment,” which is simply a ruling on how the judge thinks the law should work, which has NO binding effect on anyone. An “injunction,” on the other hand, does indeed have a binding effect, like stopping a law or a regulation from going into effect, or remaining in force. BUT, as I explained, the Texas judge refused to issue an injunction, which means that the ACA was NOT struck down in any way, shape, or form.
- Analysis: This whole “declaratory judgement” vs. an “injunction” is legal mumbo jumbo – inside baseball – stuff, which is super confusing. That is why I wanted to provide you with an explanation of what was going on as soon as I could (i.e., within 24 hours of the ruling). It is also why I suggested that you should be careful what you believe, because I unfortunately felt that for the weeks after the ruling, inaccurate characterizations of the Texas case – by both sides of the aisle – would be made in news articles and on-air appearances. Despite all of the confusion, we finally have clarity: Just before the New Year, the Texas District Court judge issued an additional ruling indicating that the ACA will remain in effect through the appeals process. Now that we all know that the ACA is not going anywhere on account of the District Court ruling, what’s next? One potential positive is that the Texas court case is spawning a renewed discussion about the ACA, and about what is working and what is not working. My hope is that this renewed discussion will lead to Congress actually enacting legislation to improve the law. I also hope that States will start moving on their own 1332 Waivers. My fear, however, is that any and all discussions on “what’s good” and “what’s bad” about the ACA will get politicized, negating Congress’s ability to improve the ACA for those Americans who are clearly “losers” under the law. And, States will likely remain in “suspended animation,” unable to develop and advance creative ways of improving the ACA within their own borders. I hope my fears are not realized in 2019.

House Democrats Vote to “Intervene” In the Texas District Court Case When the Case Gets to the 5^th Circuit Court of Appeals

In one of its first orders of business, the new House Democratic Majority approved legislative language that would authorize the House’s General Counsel to “intervene” in the Texas District Court case once it gets to the 5^th Circuit Court of Appeals. In other words, the House Democrats would become “a party” to the case as another Defendant (alongside the Democratic Attorneys General). While many ACA supporters would say that the House Democrats should indeed “intervene” in this case (because there should be a vigorous defense of the ACA, and who better than the House Democrats – who passed the law in the first place – to defend the law), most policy analysts view this as a “political move” that will allow the Democrats to continue hammering Republicans over the issue of the ACA’s “pre-existing condition” protections.
- Analysis: I suppose this is what I am talking about above when I said: “I fear that any and all issues relating to the ACA will get politicized.” But look, I get it, I am not naïve. The Democrats are simply taking a page out of the Republicans’ book when it comes to politicizing the ACA, so I can’t quite blame them. What I mean is: Since 2010, the Republicans said a lot of intellectually dishonest things and politicized the heck out of the ACA. The result: Republicans won elections. This past election cycle, the shoe-was-on-the-other-foot, and the Democrats successfully politicized the ACA – in particular, the “pre-existing condition” issue. And guess what? The Democrats won back the House. I say: Well-played from a “political” perspective. But in my old age, I loathe “politics” and the politicization of issues, especially when it comes to the ACA. But let’s get back to our discussion of House Democrats “intervening” in the Texas case: It is NOT new for the House of Representatives to use the House’s General Counsel to litigate an issue. After all, the House Republicans used the House’s General Counsel to sue over the “cost-sharing reduction” subsidies. In the House Republicans’ case – while certainly a “political move” of their own – an objective argument can be made that the House Republicans had a strong legal justification for litigating (i.e., a Separation of Powers issue where the Executive Branch cannot spend money unless the Legislative Branch says so). Remember this last point if and when the President uses his “emergency powers” to pay for “the wall.” Again, sorry for the digression… My hope is that this renewed interest in the ACA – notwithstanding the politicization – will lead to something positive. I do know that House Democrats would like to advance legislation that would “improve” certain aspects of the ACA (e.g., fixing the “family glitch” and providing Federal dollars for a State reinsurance program). But, this Democratic-led bill will also include provisions to expand eligibility for Medicaid, or to even mandate States to expand Medicaid as the ACA originally required (until the Supreme Court said expanding Medicaid was voluntary). This bill will also increase funding for marketing and outreach for ACA Exchange enrollment, which would include increased funding for Navigators. We could also see additional limits placed on out-of-pocket expenses, or some form of “cost-sharing” subsidies that would NOT technically take the form of the ACA’s “cost-sharing reduction” subsidies (so as to not impact “silver-loading,” which is effectively increasing the premium subsidies for consumers). Senate Republicans, however, will have a hard time accepting many of these provisions, although Senate Republicans would likely support Federal dollars for State reinsurance programs and fixing the “family glitch.” The question then becomes: Will ACA improvements like fixing the “family glitch” and Federal dollars for State reinsurance programs get bogged down by other Democratic-led priorities? Could Senate Republicans “trade” some 1332 Waiver “fixes” in exchange for increased funding for marketing and outreach and the Navigators and/or some additional limits on out-of-pocket expenses and/or some form of “cost-sharing” subsidies?? Only time will tell.

ACA Exchange Update

For the 2019 “Open Enrollment” Period, the Federal Exchange Saw 8.4 Million “Sign-Ups,” Compared to 8.7 Million “Sign-Ups” Last Year

In year’s past, I have commented on the ACA Exchange enrollment numbers as they rolled in over the course of the “open enrollment” period. This year, I chose not to comment on the numbers as they trickled in. Why? Because most if not all news stories covering the enrollment numbers jumped on the fact that – for the better part of the 2019 “open enrollment” period – the enrollment numbers were lagging considerably. Most of the news stories attributed the lackluster enrollment numbers to, among other things, the Trump Administration’s decision to cut funding for marketing and outreach, along with cuts to the Navigator program. Many of the articles also speculated that people were not enrolling in an Exchange plan because the “individual mandate” penalty was going to be $0 for 2019, or people were waiting to enroll in a “short-term health plan” or even an “association health plan” (AHP). I did NOT want to engage in my own speculation on whether these claims were correct or incorrect. I wanted to wait to pass final judgment once we knew the final tally.
- Analysis: Well, we now know the final tally of Exchange “sign-ups,” at least through the Federal Exchange (i.e., Healthcare.gov). Note, the “sign-up” numbers will increase once we get numbers from the State-based Exchanges, many of which end their “open enrollment” period around Jan. 15^th or Jan. 31^st. So, what do we know about “sign-ups” through the Federal Exchange? First, “sign-ups” reached 8.4 million. This is 3.8% off of the “sign-up” numbers last year (there were 8.7 million “sign-ups” last year). Is 3.8% off of last year’s “sign-up” numbers a lot or a little? Much of the speculation prior to these final numbers was that Exchange “sign-ups” would be down by 10% or more. So if this is our base-line, then in my opinion, the assertions that no one would enroll in an ACA Exchange plan because of the Trump Administration’s “sabotage” were clearly over-blown. More specifically, if this is indeed our baseline – again, that enrollment would be down by 10% – then it is clear the Trump Administration’s policies (e.g., reducing funding for marketing and outreach and the Navigators) and the zeroed out “individual mandate” penalty tax – had a marginal impact, if any. I believe most policy analysts would chalk up the 3.8% reduction to the fact that our nation’s unemployment rate sits at 3.9%. That is, if people have jobs, it is highly likely they are NOT looking for health insurance coverage in the individual market (because they are getting health coverage through their employer). HHS also attributed the dip to Medicaid expansion in States like Virginia, which I don’t think we can ignore (considering ACA Exchange “sign-ups” are down 18% in VA relative to last year). Now, if people feel that a dip in Exchange “sign-ups” by anything more than 3% is indeed a big drop, then the final tally here is a disappointment. In this case, I think it is reasonable to argue that the decision to, for example, reduce funding for marketing and outreach had an impact, especially if State-based Exchange States can show that their enrollment increased by the State’s own funding for marketing and outreach. However, I still do not think that any objective policy analyst can overlook the fact that our unemployment rate is at its lowest level since World War II, and therefore, most if not all analysts will attribute much of 3.8% dip in “sign-ups” to the fact that people have jobs (thus negating the need for them to purchase an individual market plan). Now, admittedly, I am a little bias toward this HHS. I currently have a number of friends over there, so I am rooting for them. BUT, I rooted for the previous Administration’s HHS too (having some friends over there as well). The bottom-line is that I have always rooted for the ACA Exchanges to be successful. Another thing I have always said is this: Despite claims that the “ACA Exchange markets are imploding,” I have always argued that the ACA Exchanges are going to remain stable because as long as you have a generous subsidy available to people in the individual market, people are going to come out and buy health insurance. At-the-end-of-the-day, that is what I believe we are seeing here. As long the generous premium subsidies are flowing, you are going to see a stable ACA Exchange marketplace of between 9 million and 11 million, irrespective of the policies coming out of DC or at the State level. I believe the variation between 9 and 11 million will be driven by the economy.

Employer Update

Congressional Hearings on Medicare-For-All Slated for This Year

With the shift in politics in the House, we all knew that the House Democratic Majority would pursue Medicare-For-All. We were not sure, however, the steps House Democrats would take to move the ball forward on Medicare-For-All. For example, would the entire House Democratic caucus get behind one, big Medicare-For-All bill? Or, would Speaker Pelosi instruct a number of rank-and-file Democratic members to introduce a number of different pieces of legislation, calling for different forms of Medicare-For-All? Or, would we only see hearings scheduled, where Democrats can turn-up-the-volume on Medicare-For-All, with the hopes of getting the media to turn-up-the-volume on the idea, with the hopes that the American public will have at least heard of the idea in advance of the Democratic Presidential candidates running on the issue?
- Analysis: I think we are still waiting for the answers to my questions above, but we do know that House Democrats do plan on holding hearings on Medicare-For-All. The extent of those hearings – and timing of the hearings – are still open questions, however. For example, as of this point, the only Congressional Committee that has agreed to hold a hearing on Medicare-For-All is the Budget Committee (likely occurring late February to mid-March time-frame). While the Budget Committee’s review of the idea is of critical importance (due to the cost of such a program, and the spending increases or re-allocation of spending – not to mention tax increases – that may be necessary to pay for the program). BUT, the Budget Committee is not as high-profile as the Energy and Commerce (E&C) and Ways and Means Committees, both of which have yet to commit to a hearing on Medicare-For-All. In my opinion, however, hearings in E&C and Ways and Means are inevitable (especially if paying for the program requires tax increases). It is just a question of when (in my opinion, it is likely to be later in the year like July or even September). At this point, I cannot tell you the contents of any of the Medicare-For-All legislative proposals that we are likely to see this year (because we have not seen them yet). BUT, we have seen versions of Medicare-For-All floated by private-sector think-tanks, along with some formal legislative proposals last year. I would expect we will see these versions of Medicare-For-All again this year, either as the main topic of discussion during a scheduled hearing, or as a formal piece of legislation introduced by a rank-and-file House Democratic member. The big question for employers is how will these Medicare-For-All ideas impact employer-sponsored health plans? Will Medicare-For-All replace the employer-sponsored system? Will a Medicare-For-All program compete with the employer-sponsored system? Or will a Medicare-For-All program complement the employer-sponsored system? These are the types of questions I hope to examine throughout the year, as House Democrats start their discussion of Medicare-For-All. Stay tuned.