Trump Administration Announces Plans to Weaken ACA
On October 12, President Trump signed an executive order to overhaul health insurance regulations. The order instructs the Departments of Treasury, Labor and Health and Human Services to expand health coverage through inexpensive, short-term health plans exempt from current Affordable Care Act (“ACA”) insurance market rules.
One mechanism to expand access, according to the order, is through Association Health Plans (“AHPs”) so employers could form groups across state lines to purchase health insurance. To facilitate this, the order specifically directs the Secretary of Labor to adopt a broader interpretation of the Employee Retirement Income Security Act (“ERISA”). Reinterpreting ERISA would be necessary for employers in the same line of business anywhere in the country to join to offer health care coverage to their employees.
Further, the order focuses on creation of low-cost, short-term health insurance plans. Exempt from ACA mandates, these plans do not have to cover pre-existing conditions, mental health services and other costly benefits. Coverage from short-term plans could extend for as long as a year, up from the current three-month limit.
Also on October 12, the Trump Administration announced the immediate termination of providing insurers the ACA’s cost-sharing reduction payments. HHS made the announcement to discontinue these payments in a statement late Thursday night. Lawmakers from both parties have called for continuing these payments to insurers, even if temporarily, to safeguard constituents’ access to health insurance. Bipartisan negotiation from Senate HELP Committee Chairman Lamar Alexander (R-TN) and ranking member Patty Murray (D-WA) focused on a marketplace stabilization package that was expected to include two years of CSR funding and changes to the ACA’s state innovation waivers.
White House, Congress Continue Scrutiny of 340B Program
On October 6, the White House Office of Management and Budget (“OMB”) began review of the proposed rule on 340B ceiling prices and manufacturer penalties. The 340B rule was originally proposed by the Health Resources and Services Administration (“HRSA”) in the final days of the Obama Administration and has been delayed multiple times by the Trump Administration. The rule sets penalties for manufacturers that “knowingly and intentionally” overcharge 340B providers and also includes a formula for calculating discounts.
Over the past three months, the House Energy and Commerce Committee has conducted multiple hearings on the issue and expressed repeated concerns over program growth in recent years. On October 18, the Committee held a hearing examining how 340B entities are using the program, including how much money is saved, how entities track their savings, the types of drugs purchased and prescribed within the program and how those savings are used to improve patient care.
Though the 340B program received praise for supporting many other programs through savings, Republicans raised concerns over lack of transparency and data on the program since Congress is responsible for making sure the program is running correctly.
Health-Related Bills Introduced This Week
Rep. Brett Guthrie (R-KY) introduced a bill (H.R. 4054) that would amend Title XIX of the Social Security Act to require states to submit an annual report on sources of funds used to finance the non-federal share of expenditures.
Rep. Dave Trott (R-MI) introduced H.R. 3985, the “internet of Medical Things Resilience Partnership Act.” This bill would create a public-private partnership, led by the FDA, to create a voluntary cybersecurity framework for medical devices and other health care equipment. The intent is to provide a plan to protect sensitive health care information on medical devices.
Next Week in Washington
The Senate returns for a full legislative week while the House is out next week. House and Senate staff will continue deliberation over how to fund the Children’s Health Insurance Program for another five years. On October 17, the Senate HELP Committee will hold a hearing on drug pricing and the drug delivery system. The committee has held one drug price hearing in June; however, the discussion focused on the GOP’s ACA repeal legislation. After Tuesday’s hearing, HELP Committee Chairman Lamar Alexander (R-TN) said that there is an additional hearing planned for later in the fall.
This Week in Washington in History
46 years ago this week, 1971: The House of Representatives passes the Equal Rights Amendment 354-23. Under the leadership of U.S. Representative Bella Abzug of New York, it won the requisite two-thirds vote from the House.
44 years ago this week, 1973: Vice President Spiro Agnew resigns amid accusations of income tax evasion. Under the process decreed by Section II of the 25th Amendment, President Richard Nixon was instructed to fill the vacancy by nominating a candidate who had to be approved by both houses of Congress with a majority vote. Nixon would nominate Gerald Ford. Agnew is later convicted and sentenced to three years’ probation and fined $10,000.
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