Marilyn Singleton, MD, JD summarizes recent healthcare-related legislative activity on Capitol Hill.
Thankfully, health related legislation is very slowly pouring in. Included in this edition of the Health Policy Legislative Update is a fact sheet from the Senate Finance Committee, an outline of the GOP Senate proposal to replace the ACA, and a look at new intrusions into our medical privacy.
The Affordable Care Act’s Tax Burden
According to the Senate Finance Committee Chairman, Obamacare’s massive expansion of government was paid for with more than a trillion dollars in tax increases. And these are often hidden and masked. Temporary relief for three of these taxes was achieved via end-of-year (2015) spending and tax extender bills: the Cadillac Tax implementation was postponed until 2020, the Medical Device Tax suspended for 2 years, and the Health Insurance Tax will pause for 1 year in 2017.
Take a look at Obamacare’s trillion dollar tax hike:
- $345 billion in new wage and income taxes
- $166.9 billion in new taxes from Employer Mandate
- $87.3 billion in taxes from Cadillac tax (postponed until 2020)
- $74 billion in new health savings taxes
- $43.3 billion in new Individual Mandate taxes
- $35.7 billion from new tax on chronic illness
- $29.6 billion in new taxes on pharmaceuticals
- $142.2 billion in new taxes from health insurance tax (1-year moratorium in 2017)
- $23.9 billion from Medical Device Tax (suspended for 2-years)
More Evidence that the Affordable Care Act is Not Affordable
National health expenditures grew 5.3 percent to $3 trillion in 2014, or $9,523 per person, and accounted for 17.5 percent of GDP. For 2014-24, health spending is projected to grow at an average rate of 5.8 percent per year. “Health spending is projected to grow 1.1 percent faster than gross domestic product (GDP) per year over this period; as a result, the health share of GDP is expected to rise from 17.4 percent in 2013 to 19.6 percent by 2024,” according to Centers for Medicare and Medicaid Services.
The Senate’s ACA Replacement “Roadmap” Is Still Floating Around
Senators Richard Burr (R-NC), Tom Coburn, M.D. (R-OK), and Orrin Hatch (R-UT) unveiled the Patient Choice, Affordability, Responsibility, and Empowerment (CARE) Act in 2014. Marinating for two years has not made the replacement concept taste any better.
The Patient CARE Act includes:
- Ensure no one can be denied coverage based on their pre-existing condition;
- Prohibit insurance companies from imposing lifetime limits on a consumer;
- Adopt an age rating ratio that limits the amount an older individual will pay to no more than five times what a younger individual pays (5 to 1) as a baseline, unless a state affirmatively elects to have a different ratio;
- Require health plans to offer dependent coverage up to age 26, unless a state opts out of this provision;
- Ensure guaranteed renewability for patients to be able to renew their coverage;
- Create a new “continuous coverage protection” for individuals moving from one health plan to another— regardless of whether in the individual, small group, or large employer markets. An individual could not be medically underwritten, denied health coverage, or be forced to pay a higher premium solely because of a pre- existing condition if they were continuously enrolled in a health plan without a significant break in coverage.
Small Business Empowerment
- Individuals working for a small business with 100 or fewer employees would be eligible to receive the credit – individuals who do not work at a large employer would also be eligible for the credit.
- Individuals with an annual income up to 300% of the Federal Poverty Level (FPL) would be eligible to receive an age-adjusted, advanceable, refundable tax credit to buy health care coverage or services.
- The value of the tax credit would reduce in value as an individual’s income increases between 200-300% of FPL.
Empower State Governments
- States could elect to auto-enroll qualified individuals into insurance plans with premiums equal to the value of the individual’s tax credit, but who fail to make an affirmative choice in choosing a plan within a specified timeframe. If an individual did not like the initial default plan selected, they would be able to switch plans or opt-out of coverage altogether—no American is forced to have health insurance they don’t want.
- State high-risk pools could help patients with the costliest chronic medical conditions access coverage while reducing premiums for other consumers in that state.
Strengthen Consumer-directed Health Care
- Restore the ability to use funds in a Flexible Spending Account (FSA) or Health Savings Account (HSA) for the purchase of over- the-counter medications as a qualified medical expense. For the first time, under the Patient CARE Act, HSA funds could be used to pay premiums for HSA-qualified and COBRA policies. This is a significant step forward in correcting a long- time tax distortion which only allowed those with employer coverage to purchase coverage through pre-tax dollars.
- States would adopt a capped allotment, where federal Medicaid dollars would “follow the patient”. The state capped allotment would be based on the patient’s health status, age, and life circumstances.
- States would continue to receive taxpayer-provided pass-through health care grants for pregnant women, low- income children, and low-income families. Funding for health grants would be allocated to states based on the number of low-income individuals at or below 100% of FPL. This capped allotment would grow over time at CPI+1 and reflect demographic and population changes.
- States would receive a defined budget for long-term care services and support for low-income elderly or disabled individuals who do not avail themselves of the tax credit.
- No changes would be made to acute-care funding for low-income elderly and disabled individuals.
Reduce Defensive Medicine Practices
- Patient CARE Act adopts common- sense reforms to tackle the problem of junk lawsuits and defensive medicine.
Create Transparency for Consumers and Patients
- The Patient CARE Act would lower health costs while adopting new measures to increase transparency on cost, quality, and outcomes.
Reduce Tax Code Distortion
- The proposal maintains the employer deduction, so employers continue to have incentive to provide quality coverage to their employees.
- The proposal has a cap on the exclusion for employees’ health coverage valued at a generous $12,000 for an individual and $30,000 for a family and index it at CPI+1 for perpetuity. Unlike the punitive Cadillac Plan Tax in current law which imposes an onerous excise tax of 40 percent on cost of coverage of health plans that exceed the annual limit, the proposal treats every additional dollar after the generous threshold at the individual’s tax rate – a more balanced approach for middle class Americans.
When Will the Data Mining End?
What is the Qualified Entity Certification Program (QECP)? This program was created by the Affordable Care Act (section 10332) that allows “qualified entities” to receive Medicare claims data under Parts A, B, and D. The Qualified Entities are to produce and disseminate CMS-approved reports regarding the performance of providers. The stated purpose is to promote transparency and performance improvement in the provision of health care services. Qualified entities can be consultants, employer coalitions, health analytics, vendors, health plans, physicians, provider networks, state agencies, trade associations, and “other.” CMS claims the QECP is necessary because performance measurement activities “have mostly lacked Medicare administrative Fee-for-Service data, and thereby omit one of the largest payer in any given market.’ https://www.qemedicaredata.org/SitePages/about.aspx.
Now, compliments of as required by the Medicare Access and CHIP Reauthorization Act (MACRA), will allow organizations approved as qualified entities to confidentially share or sell analyses of Medicare and private sector claims data to providers, employers, and other groups who can use the data to support improved care. In addition, qualified entities will be allowed to provide or sell claims data to providers.
Full text of Proposed Rule implementing expanded data sharing provisions: https://www.federalregister.gov/articles/2016/02/02/2016-01790/medicare-program-expanding-uses-of-medicare-data-by-qualified-entities
(Comments due March 29, 2016)
More Requests for Data in Government-sponsored Health Programs
On January 12, 2016, S. 2016, the Medicaid and Chip Quality Improvement Act of 2016 was introduced by Sen. Sherrod Brown (D-OH) and referred to the Senate Finance Committee. The preamble to the bill states that despite the billions of dollars spend on CHIP and Medicaid programs, there is no nationwide systematic method of reporting quality measurement data. The bill would require pediatric and adult health data to be compiled reporting shall be stratified by delivery system, including managed care organizations under section 1932, benchmark plans, primary care case management services providers, health care services in fee-for-service settings, and other delivery systems. Up to 10 states can receive a performance bonus either by superlative performance or being the most improved. The total amount of Medicaid quality performance bonuses for all fiscal years is $500,000,000, which is available until expended.
As always, the key issue is privacy and who decides what medical quality care is.
And Then There’s the Ever-present Fraud Stealing Our Tax Dollars
A Pennsylvania federal jury convicted a registered nurse who took part in a multimillion-dollar fraud on Medicare that involved hospice care. The evidence at trial showed that between 2005 and 2008, McGill was the director of professional services for Home Care Hospice (HCH), a for-profit business that provided hospice services for patients at nursing homes, hospitals and private residences. McGill authorized and supervised the admission of inappropriate and ineligible patients for hospice services, which contributed to HCH submitting millions of dollars in fraudulent claims to Medicare. Many HCH patients did not meet the Medicare criteria for hospice care and HCH billed Medicare for hospice care that was not provided to the patients.
Federal Government Tackles Family Caregiving Crisis
On December 8, 2015, S. 1719, the Recognize, Assist, Include, Support, and Engage Family Caregivers Act of 2015 (the RAISE Family Caregivers Act), introduced by Sen. Susan Collins (R-ME) passed the Senate and was referred to the House. The bill requires the Secretary of Health and Human Services to create and update a national family caregiving strategy. The large majority of elders do not want to be placed in institutions. It is not easy to raise a family, save for retirement and care for an aging parent. But we all know the best strategy is our personal planning.
Select State Legislative Issues:
- South Dakota Any Willing Provider Law Under Attack: http://www.sdpatientchoice.org/blog/3/sanford-introduces-hb-1067
- AAPS Florida Chapter Supports Bill Protecting DPC, Opposes Ban on Balance-Billing: http://eepurl.com/bONpp5
- AAPS Arizona Chapter Supports Bills Increasing Medical Board Transparency and Protecting Access to Off-Label Treatment: http://azaaps.org
- Pending Michigan Bills to Stop MOC/MOL: http://right2care.org/LearnMore.aspx
- Pending Missouri Bills to Stop MOC/MOL: HB2304 & SB 772