All eyes yesterday were focused on the Senate, which released significant new amendments to the Better Care Reconciliation Act. But the Senate was not the only game in town.
On July 13 the Medicare Trustees released their 2017 Medicare Trust Fund report. One of the most controversial creations of the ACA was the Independent Payment Advisory Board (IPAB). The ACA established specific target growth rates for Medicare and charged the IPAB with ensuring that Medicare expenditures stayed within these limits.
Each year the CMS Chief Actuary must make a determination as to whether the projected average Medicare growth rate for the 5-year period ending 2 years later will exceed the target growth rate. For each year since the provision went into effect in 2013, the CMS Chief Actuary has determined that the projected growth rates will not exceed these limits. It was thought that this year might be different, but for 2017 the Chief Actuary again concluded that the growth rate will not be exceeded, and said so in a letter to CMS.
The IPAB was supposed to be a 15-member board of experts that would, for years when Medicare growth rates were projected to exceed the threshold, make recommendations for cutting costs. These would be implemented unless Congress enacted an alternate approach that would achieve the same savings or waived the requirement to cut costs by a three-fifths majority. The IPAB has never been created, but under the ACA, in the absence of an IPAB its power to make program cuts devolves to the HHS Secretary.
The IPAB is deeply disliked in Congress and proposals to abolish it have wide support. But the IPAB statute seems to say that the IPAB can only be abolished by a joint resolution of Congress which must be introduced into Congress by February 1, 2017 and be enacted, following very specific procedures, by August 15, 2017. In fact, one bill to abolish the IPAB was introduced into the Senate by February 1 with 36 Republican co-sponsors, and another with 12 Democratic co-sponsors, while a House bill was introduced on February 3 with 233 Democratic and Republican cosponsors. But August 15 is coming up quickly and Congress seems to have its hands full with other issues. Moreover, the CBO would likely view elimination of the IPAB as coming with a high price tag.
It may not matter much. The IPAB provision recognizes that Congress can always change its mind. It could presumably change its rules to allow it to abolish the IPAB whenever it chose to do so. In fact, the rules that the House adopted for the 115th session provide that any IPAB submittals are not to be considered during the 2017-2018 session. But if Congress chose to proceed according to the ACA’s provisions, the IPAB would find few defenders.
Federal Exchange Eligibility Redeterminations And Re-Enrollment
CMS released on July 13 a guidance describing how it intends to handle eligibility redeterminations and re-enrollment for federal exchange enrollees for 2018. Basically, CMS intends to use the same procedures it used for redeterminations and reenrollment for 2017, which in turn were similar to those used for 2016. The exchange will continue to auto-reenroll enrollees who fail to select a plan, and to terminate enrollees who have been auto-reenrolled more than once without contact with the exchange.
There is one change for 2018: CMS will discontinue advance premium tax credits (APTC) and cost-sharing reduction (CSR) payments not just for enrollees who received APTC or CSRs and did not file a tax return in a prior year in which they received ATPC or CSRs, as CMS did in 2016, but additionally for enrollees who failed to file form 8962 to reconcile the APTC they received and the premium tax credits to which they were entitled, and failed to contact the exchange and obtain an updated eligibility determination for 2018. Filing a tax return and reconciling APTC with premium tax credits is an eligibility requirement for receiving APTC and CSRs in subsequent years, but federal regulations prohibit termination of coverage for this reason unless direct notice is sent to the enrollee that coverage will be terminated for failure to file. Until now, CMS has not been able to provide the required notice for those who fail to reconcile.
GAO Finds Tax Credit Verification Procedures Wanting
Finally, on July 13, 2017, the Government Accountability Office released a report on Improvements Needed in CMS and IRS Controls over Health Insurance Premium Tax Credits. The report is long and detailed and reviews comprehensively the controls that CMS and the IRS have in place—or, more often, do not have in place—for ensuring that improper premium tax credits are not made.
The GAO scored both agencies for failing to provide accurate assessments of improper payments. It also criticized each agency for failing to have procedures in place for verifying most eligibility requirements for premium tax credits and for identifying and correcting errors in premium tax credit reporting and collecting overpayments. The agencies responded that they are working on improving verification and processing procedures, but that that they have limited resources and verification is not always possible.
In the end, a tax-based system for paying for health insurance that depends on accurate reporting and verification of citizenship or lawful alien status, incarceration status, income, residence, health insurance premiums, household composition, availability of alternative forms of coverage, and tax filing status of applicants and enrollees—and requires coordination of two independent federal agencies—is very difficult to administer. If the Senate’s BCRA is adopted, administration of the program will only become more complicated, as all of these factors remain relevant and to them will be added age and the possibility of new forms of coverage that do not qualify for premium tax credits, but can be paid for using tax-subsidized health savings accounts. The GAO has its future work cut out for it in any event.