Trump’s ACA Moves Put Focus on Courts, Congress

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Trump’s ACA Moves Put Focus on Courts, Congress
Calendar17 October 2017

The Trump administration’s decision to cut off Affordable Care Act subsidies for low-income individuals is being met with lawsuits and renewed efforts in Congress to pass legislation to stabilize the individual market.

The administration announced last week that it would immediately stop making monthly cost-sharing reduction (CSR) payments to reimburse insurers for subsidies to low-income individuals who buy ACA exchange coverage. Republicans charge – and a federal court has agreed (House vs. Price) – that the subsidies are unlawful unless appropriated by Congress.

A number of states quickly responded to the announcement with a lawsuit seeking an injunction to ensure that the payments continue, and a coalition of Democratic Attorneys General who were granted permission earlier this year to intervene in House vs. Price will now proceed with litigation to defend the subsidies.

The decision also puts new pressure on Congress to appropriate funding for the subsidies. Leaders of the Senate Health, Education, Labor and Pensions (HELP) Committee said Tuesday they reached a tentative deal on legislation to stabilize the individual market that would fund CSRs for the rest of this year, 2018 and 2019. The proposal also would give more flexibility to states seeking Section 1332 waivers, which allow states to bypass some ACA rules under certain conditions. In addition, individuals over age 30 would be eligible to purchase catastrophic plans offering basic coverage.

Sen. Ron Johnson, R-WI, is drawing up similar legislation aimed at attracting support from conservative Republicans. That measure could propose repealing the individual mandate and delaying enforcement of the employer mandate. It may also seek expanded use of health savings accounts (HSAs).

Whether a package could emerge that attracts support from a critical mass of senators and from House Republicans is an open question. Conservative GOP lawmakers in both chambers say any support for continuing the subsidy payments depends on concessions from Democrats on scaling back the ACA’s insurance rules and consumer protections.

If lawmakers reach a bipartisan deal, it’s not clear whether it would advance as a standalone bill or as part of major, must-pass legislation later this year dealing with government funding, the debt limit, and extending funding for the federal children’s health insurance program (CHIP). Democrats will have leverage in those talks because the legislation would need 60 votes to clear the Senate, where Republicans hold a 52-48 advantage. At the same time, the president may not sign a bill that funds the subsidies unless it contains other GOP priorities.

Just before announcing he would cut off subsidy payments, the president issued an executive order directing regulatory agencies to draft rules intended to lower health insurance costs by easing some current ACA requirements. The order targets three areas for new guidance: stand-alone health reimbursement arrangements, association health plans, and short-term, limited-duration insurance.

The Departments of Health and Human Services, Labor and Treasury will proceed under the typical rulemaking process, which includes publishing draft rules and allowing for public comment, so any final rules the changes and policy implications won’t be clear for months. The order is also expected to face legal challenges from states and other stakeholders, although they may not be brought until the departments proposed the regulations.

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