We had a chance to moderate and participate in a webinar with leading colleagues John Harig, Tim Fry, David Pivnick and Brett Barnett regarding key Anti-Kickback Statute and Stark Law issues facing health systems, surgery centers, dialysis providers and other healthcare providers and investors. Below are 10 key thoughts discussed during the webinar as to fraud and abuse issues in play in 2018.
1. The reading and implementation of the “Yates Memo” issued by the U.S. Department of Justice will influence how the government aims to prosecute individuals in addition to companies.
2. The reading of the U.S. Supreme Court’s Escobar decision will influence whether defendants in false claims cases will receive some relief from technical billing violations that are not fundamental or material to the government’s paying of a claim.
3. Regulators and potential buyers are focused on “creative marketing arrangements” by physician practices, often related to laboratory and/or pharmacy arrangements.
4. Government enforcement agencies and potential buyers are focused on physician compensation arrangements, particularly their compliance with the Stark Law.
5. Potential buyers face a challenge in determining how deeply to examine targets’ past practices through billing and coding audits, as well as how to handle the results of billing and coding audits in negotiation of transactions.
6. Private equity buyers face challenges in their evaluation of risk posed by regulatory issues and how to address regulatory risks in a seller’s market.
7. Sellers present the historical legal analysis of fraud and abuse issues during the due diligence process, particularly when the legal analysis is positive, but assumptions underlying the legal analysis do not align with the sellers’ actual operations.
8. The turnover in the U.S. Department of Justice may impact the timing of fraud and abuse prosecutions and settlements.
9. Recoveries by the government resulting from fraud and abuse prosecutions have increased in magnitude. Furthermore, there are more recoveries coming from cases in which the government has not joined in the case with the relator.
10. The wide array of laboratory arrangements and businesses hold implications for fraud and abuse laws.
The Affordable Care Act has survived more assassination attempts than Fidel Castro — and it’s still kicking. The Kaiser Family Foundation’s Larry Levitt has a piece in the JAMA Forum laying out the argument that the ACA “continues to escape death.”
Levitt’s piece is mostly focused on the Senate’s repeal-and-replace efforts and the Trump administration’s implementation decisions — cutting off payments for cost-sharing subsidies and dramatically scaling back enrollment outreach.
“If these efforts were intended to make the marketplace implode, they may, in fact, be backfiring,” Levitt says, citing the weird abundance of plans with $0 monthly premiums and enrollment totals that are beating some experts’ expectations.
This is just the latest chapter. The ACA has been a fixture of public debate since 2009, and it has never veered far from death’s door. In that time, it has survived:
Any number of make-or-break moments during the legislative debate
Two potentially disastrous Supreme Court challenges
The Republican waves of 2010 and 2014, and the countless repeal votes that followed
A slew of self-inflicted wounds, from provisions that proved unworkable to the hot mess that was the HealthCare.gov launch.
Between the lines: The ACA has definitely taken some hits — it’s not as strong its drafters might have hoped on the day it passed. But congressional Republicans’ failure to repeal it, and President Trump backing into a massive increase in its subsidies, are just the latest signs of the law’s surprising durability.
Until Congress repeals the individual mandate, anyway…
President Trump will end key payments to insurers selling ObamaCare plans, the White House announced late Thursday, marking Trump’s most aggressive move yet to dismantle the law after multiple GOP efforts to repeal and replace it failed this year.
The Trump administration has continued making the the disbursements to insurers, known as cost-sharing reduction payments, on a monthly basis. But Trump had consistently threatened to end the payments, which are worth an estimated $7 billion this year.
“Based on guidance from the Department of Justice, the Department of Health and Human Services has concluded that there is no appropriation for cost-sharing reduction payments to insurance companies under Obamacare. In light of this analysis, the Government cannot lawfully make the cost-sharing reduction payments,” the White House said in a statement late Thursday night.
The payments were created as part of the Affordable Care Act but were then the subject of a lawsuit by House Republicans during the Obama administration. A federal court ruled the payments were being made illegally, but the Obama administration appealed.
Congress could still decide to appropriate the payments, and there is bipartisan agreement that they should be made. But no action has been taken, and some Republicans are hesitant to vote for what they see as a bailout of ObamaCare.
“The bailout of insurance companies through these unlawful payments is yet another example of how the previous administration abused taxpayer dollars and skirted the law to prop up a broken system. Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people,” White House press secretary Sarah Huckabee Sanders said.
The administration’s decision is likely to lead to lawsuits. It also puts enormous pressure on lawmakers to reach a deal on funding the payments, adding yet another partisan battle to an already full calendar.
Senate Minority Leader Charles Schumer (D-N.Y.) and House Minority Leader Nancy Pelosi (D-Calif.) issued a joint statement calling the decision a “spiteful act of vast, pointless sabotage … now, millions of hard-working American families will suffer just because President Trump wants them to.”
Meanwhile, Speaker Paul Ryan (R-Wis.) praised the decision to end the Obama administration’s appeal of the subsidies.
“Today’s decision … preserves a monumental affirmation of Congress’s authority and the separation of powers,” Ryan said in a statement. “Obamacare has proven itself to be a fatally flawed law, and the House will continue to work with the Trump administration to provide the American people a better system.”
Cutting off the subsidies could throw the ObamaCare marketplace into chaos.
The Congressional Budget Office (CBO) said in August that about 1 million additional people would be uninsured in 2018 and insurance companies would raise premium prices by about 20 percent for ObamaCare plans if the payments were cut off.
The CBO also said halting the payments would increase the federal deficit by $194 billion through 2026, largely because federal assistance to buy ObamaCare plans rises when premiums do.
The payments help low-income people afford co-pays, deductibles and other out-of-pocket costs associated with health insurance policies. Insurers have called the payments critical, saying that without them, they would have to massively increase premiums or exit the individual market.
Many insurers have already priced their plans for the coming open enrollment period, which begins Nov. 1.
The leaders of Senate Health Committee have been working toward a bipartisan deal to fund the payments for two years in order to stabilize the markets in the short term.
But progress was halted when lawmakers tried to pass a last-ditch ObamaCare repeal bill from Sens. Lindsey Graham (R-S.C.) and Bill Cassidy (R-La.) last month, and the sides have still not reached an agreement.
The decision on the payments comes after Trump on Thursday signed an executive order aimed at loosening ObamaCare restrictions on insurance plans, which also could help destabilize the law.
President Trump will scrap subsidies to health insurance companies that help pay out-of-pocket costs of low-income people, the White House said late Thursday. His plans were disclosed hours after the president ordered potentially sweeping changes in the nation’s insurance system, including sales of cheaper policies with fewer benefits and fewer protections for consumers.
The twin hits to the Affordable Care Act could unravel President Barack Obama’s signature domestic achievement, sending insurance premiums soaring and insurance companies fleeing from the health law’s online marketplaces. After Republicans failed to repeal the health law in Congress, Mr. Trump appears determined to dismantle it on his own.
Without the subsidies, insurance markets could quickly unravel. Insurers have said they will need much higher premiums and may pull out of the insurance exchanges created under the Affordable Care Act if the subsidies were cut off. Known as cost-sharing reduction payments, the subsidies were expected to total $9 billion in the coming year and nearly $100 billion in the coming decade.
“The government cannot lawfully make the cost-sharing reduction payments,” the White House said in a statement.
It concluded that “Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people.”
In a joint statement, the top Democrats in Congress, Senator Chuck Schumer of New York and Representative Nancy Pelosi of California, said Mr. Trump had “apparently decided to punish the American people for his inability to improve our health care system.”
“It is a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America,” they said. “Make no mistake about it, Trump will try to blame the Affordable Care Act, but this will fall on his back and he will pay the price for it.”
Lawmakers from both parties have urged the president to continue the payments. Mr. Trump had raised the possibility of eliminating the subsidies at a White House meeting with Republican senators several months ago. At the time, one senator told him that the Republican Party would effectively “own health care” as a political issue if the president did so.
“Cutting health care subsidies will mean more uninsured in my district,” Representative Ileana Ros-Lehtinen, Republican of Florida, wrote on Twitter late Thursday. She added that Mr. Trump “promised more access, affordable coverage. This does opposite.”
But Speaker Paul D. Ryan, Republican of Wisconsin, praised Mr. Trump’s decision and said the Obama administration had usurped the authority of Congress by paying the subsidies. “Under our Constitution,” Mr. Ryan said, “the power of the purse belongs to Congress, not the executive branch.”
The future of the payments has been in doubt because of a lawsuit filed in 2014 by House Republicans, who said the Obama administration was paying the subsidies illegally. Judge Rosemary M. Collyer of the United States District Court in Washington agreed, finding that Congress had never appropriated money for the cost-sharing subsidies.
The Obama administration appealed the ruling. The Trump administration has continued the payments from month to month, even though Mr. Trump has made clear that he detests the payments and sees them as a bailout for insurance companies.
This summer, a group of states, including New York and California, was allowed to intervene in the court case over the subsidies. The New York attorney general, Eric T. Schneiderman, said on Thursday night that the coalition of states “stands ready to sue” if Mr. Trump cut off the subsidies.
What the administration has done to weaken the health law.
Mr. Trump’s decision to stop the subsidy payments puts pressure on Congress to provide money for them in a spending bill.
Senator Lamar Alexander, Republican of Tennessee and the chairman of the Senate health committee, and Senator Patty Murray of Washington, the senior Democrat on the panel, have been trying to work out a bipartisan deal that would continue the subsidy payments while making it easier for states to obtain waivers from some requirements of the Affordable Care Act. White House officials have sent mixed signals about whether Mr. Trump was open to such a deal.
The decision to end subsidies came on the heels of Mr. Trump’s executive order, which he signed earlier Thursday.
With an 1,100-word directive to federal agencies, the president laid the groundwork for an expanding array of health insurance products, mainly less comprehensive plans offered through associations of small employers and greater use of short-term medical coverage.
It was the first time since efforts to repeal the landmark health law collapsed in Congress that Mr. Trump has set forth his vision of how to remake the nation’s health care system using the powers of the executive branch. It immediately touched off a debate over whether the move would fatally destabilize the Affordable Care Act marketplaces or add welcome options to consumers complaining of high premiums and not enough choice.
Most of the changes will not occur until federal agencies write and adopt regulations implementing them. The process, which includes a period for public comments, could take months. That means the order will probably not affect insurance coverage next year, but could lead to major changes in 2019.
“With these actions,” Mr. Trump said at a White House ceremony, “we are moving toward lower costs and more options in the health care market, and taking crucial steps toward saving the American people from the nightmare of Obamacare.”
“This is going to be something that millions and millions of people will be signing up for,” the president predicted, “and they’re going to be very happy.”
But many patients, doctors, hospital executives and state insurance regulators were not so happy. They said the changes envisioned by Mr. Trump could raise costs for sick people, increase sales of bare-bones insurance and add uncertainty to wobbly health insurance markets.
Chris Hansen, the president of the lobbying arm of the American Cancer Society, said the order “could leave millions of cancer patients and survivors unable to access meaningful coverage.”
In a statement from six physician groups, including the American Academy of Family Physicians, the doctors predicted that “allowing insurers to sell narrow, low-cost health plans likely will cause significant economic harm to women and older, sicker Americans who stand to face higher-cost and fewer insurance options.”
While many health insurers remained silent about the executive order, some voiced concern that it could destabilize the market. The Trump proposal “would draw younger and healthier people away from the exchanges and drive additional plans out of the market,” warned Ceci Connolly, the chief executive of the Alliance of Community Health Plans.
Administration officials said they had not yet decided which federal and state rules would apply to the new products. Without changing the law, they said, they can rewrite federal regulations so that more health plans would be exempt from some of its requirements.
The Affordable Care Act has expanded private insurance to millions of people through the creation of marketplaces, also known as exchanges, where people can purchase plans, in many cases using government subsidies to offset the cost. It also required that plans offered on the exchanges include a specific set of benefits, including hospital care, maternity care and mental health services, and it prohibited insurers from denying coverage to people with pre-existing medical conditions.
The executive order’s quickest effect on the marketplaces would be the potential expansion of short-term plans, which are exempt from Affordable Care Act requirements. Many health policy experts worry that if large numbers of healthy people move into such plans, it would drive up premiums for those left in Affordable Care Act plans because the risk pool would have sicker people.
“If the short-term plans are able to siphon off the healthiest people, then the more highly regulated marketplaces may not be sustainable,” said Larry Levitt, a senior vice president for the Kaiser Family Foundation. “These plans follow no rules.”
Mr. Trump’s order would also eventually make it easier for small businesses to band together and buy insurance through entities known as association health plans, which could be created by business and professional groups. A White House official said these health plans “could potentially allow American employers to form groups across state lines” — a goal championed by Mr. Trump and many other Republicans — allowing more options and the formation of larger risk pools.
Association plans have a troubled history. Because the plans were not subject to state regulations that required insurers to have adequate financial resources, some became insolvent, leaving people with unpaid medical bills. Some insurers were accused of fraud, telling customers that the plans were more comprehensive than they were and leaving them uncovered when consumers became seriously ill.
The White House said that a broader interpretation of federal law — the Employee Retirement Income Security Act of 1974 — “could potentially allow employers in the same line of business anywhere in the country to join together to offer health care coverage to their employees.”
The order won applause from potential sponsors of association health plans, including the National Federation of Independent Business, the National Restaurant Association, the U.S. Chamber of Commerce and Associated Builders and Contractors, a trade group for the construction industry.
The White House released a document saying that some consumer protections would remain in place for association plans. “Employers participating in an association health plan cannot exclude any employee from joining the plan and cannot develop premiums based on health conditions” of individual employees, according to the document. But state officials pointed out that an association health plan can set different rates for different employers, so that a company with older, sicker workers might have to pay much more than a firm with young, healthy employees.
“Two employers in an association can be charged very different rates, based on the medical claims filed by their employees,” said Mike Kreidler, the state insurance commissioner in Washington.
Mr. Trump’s order followed the pattern of previous policy shifts that originated with similar directives to agencies to come up with new rules.
Within hours of his inauguration in January, he ordered federal agencies to find ways to waive or defer provisions of the Affordable Care Act that might burden consumers, insurers or health care providers. In May, he directed officials to help employers with religious objections to the federal mandate for insurance coverage of contraception.
Both of those orders were followed up with specific, substantive regulations that rolled back Mr. Obama’s policies.
In battles over the Affordable Care Act this year, Mr. Trump and Senate Republicans said they wanted to give state officials vast new power to regulate insurance because state officials were wiser than federal officials and better understood local needs. But under Thursday’s order, the federal government could pre-empt many state insurance rules, a prospect that alarms state insurance regulators.
Another part of Mr. Trump’s order indicates that he may wish to crack down on the consolidation of doctors, hospitals and other health care providers, a trend that critics say has driven up costs for consumers. Mr. Trump said that administration officials, working with the Federal Trade Commission, should report to him within 180 days on federal and state policies that limit competition and choice in the health care industry.
Insurers have said the move will destabilize the individual market and increase premiums by at least 20 percent.
In a move insurers have long said would destabilize the individual market and increase premiums by at least 20 percent, the Department of Health and Human Services late Thursday ended cost-sharing reduction payments.
At least one state attorney general, AG Eric Schneiderman of New York, has said he would sue the decision. The court granted a request to continue funding for the subsidies, Schneiderman said.
California may also sue the administration over the decision.
“I am prepared to sue the #Trump Administration to protect #health subsidies, just as when we successfully intervened in #HousevPrice!” California AG Xavier Becerra tweeted Thursday night.
In May, Schneiderman and Becerra led a coalition of 18 attorneys general in intervening in House v. Price over the cost-sharing reduction payments.
The cost-sharing reductions payments will be discontinued immediately based on a legal opinion from Attorney General Jeff Sessions, said Acting HHS Secretary Eric Hargan and Centers for Medicare and Medicaid Services Administrator Seema Verma.
“It has been clear for many years that Obamacare is bad policy. It is also bad law,” HHS said. “The Obama Administration, unfortunately, went ahead and made CSR payments to insurance companies after requesting – but never ultimately receiving – an appropriation from Congress as required by law. In 2014, the House of Representatives was forced to sue the previous Administration to stop this unconstitutional executive action. In 2016, a federal court ruled that the Administration had circumvented the appropriations process, and was unlawfully using unappropriated money to fund reimbursements due to insurers. After a thorough legal review by HHS, Treasury, OMB, and an opinion from the Attorney General, we believe that the last Administration overstepped the legal boundaries drawn by our Constitution. Congress has not appropriated money for CSRs, and we will discontinue these payments immediately.”
Trump tweeted this morning, “The Democrats ObamaCare is imploding. Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!”
Insurers reached and America’s Health Insurance Plans did not have an immediate comment on the ending of the subsidies.
The move to end CSRs comes weeks before the start of open enrollment on Nov. 1, but many insurers had submitted rates reflecting the end of the subsidies that allowed them to offer lower-income consumers lower deductibles and out-of-pocket costs.
America’s Essential Hospitals said it was alarmed by news of administration decisions that could create turmoil across insurance markets and threaten healthcare coverage for millions.
“This decision could leave many individuals and families with no options at all for affordable coverage,” said Bruce Siegel, MD, CEO of America’s Essential Hospitals. “We call on Congress to immediately shore up the ACA marketplace and to work in bipartisan fashion, with hospitals and other stakeholders, toward long-term and sustainable ways to give all people access to affordable, comprehensive care.”
Today’s CSR decision follows yesterday’s executive order from President Trump to allow for association health plans that could circumvent Affordable Care Actmandates on coverage. The executive order must go through the federal rulemaking process and may also face legal challenges.
“Health plans remain committed to certain principles. We believe that all Americans should have access to affordable coverage and care, including those with pre-existing conditions. We believe that reforms must stabilize the individual market for lower costs, higher consumer satisfaction, and better health outcomes for everyone. And we believe that we cannot jeopardize the stability of other markets that provide coverage for hundreds of millions of Americans,” said spokeswoman Kristine Grow. “We will follow these principles – competition, choice, patient protections and market stability – as we evaluate the potential impact of this executive order and the rules that will follow. We look forward to engaging in the rulemaking process to help lower premiums and improve access for all Americans.”
The American Academy of Family Physicians and five other medical associations representing more than 560,000 doctors have expressed serious concerns over the effect of President Trump’s executive order directing federal agencies to write regulations allowing small employers to buy low-cost insurance that provides minimal benefits.
In a joint statement, the AAFP, the American Academy of Pediatrics, the American College of Physicians, the American Congress of Obstetricians and Gynecologists, the American Osteopathic Association and the American Psychiatric Association strongly rejected the order they said would allow insurers to discriminate against patients based on their health status, age or gender.
Republicans tried to repeal and replace the ACA, and since that failed are trying to end consumer protections under the law, according to U.S. Representative Bill Pascrell Jr., a Democrat from New Jersey and a member of the Ways and Means Committee.
“Republicans have been on the warpath trying to end important consumer protections that the ACA affords, including protections for people with pre-existing conditions and required coverage for services that people actually need, like mental health care,” Pascrell said. “Now that they’ve failed in that endeavor, the Trump Administration is trying to use the back-door with this executive order.”
A Congressional Budget Office analysis released in August said the CSRs, which cost an estimated $7 billion a year, could end up costing the federal government $194 billion over a decade.
With a repeal bill off the table, the Trump administration has drafted an executive order that could blow a huge hole in the Affordable Care Act, according to a source with direct knowledge of the plan.
The order would, in effect, exempt many association health plans, groups of small businesses that pool together to buy health insurance, from core Obamacare requirements like the coverage of certain essential health benefits. It would potentially allow individuals to join these plans too, which would put individual insurance marketplaces in serious peril by drawing younger and healthier people away from them.
The draft order is also said to broaden the definition of short-term insurance, which is also exempt from the law’s regulations. Together, these changes represent a serious threat to Obamacare: President Trump seems ready to open more loopholes for more people to buy insurance outside the health care law’s markets, which experts anticipate would destabilize the market for customers who are left behind with higher premiums and fewer insurers.
“This appears to be a backdoor way of undermining the Affordable Care Act,” Kevin Lucia, who studies the markets at Georgetown University, said of the alleged changes.
It’s possible that the order could change before Trump signs it, or never be signed at all, as has happened with other executive orders in the past. The details of the order as described, though, generally match up with what had been expected after Trump said he would soon issue an executive order on health care. Association health plans have been a priority for Sen. Rand Paul (R-KY), who has urged Trump to expand them.
The White House declined to comment when Vox inquired about the pending order. A senior administration official detailed the outline of the executive order to the Wall Street Journalon Saturday evening, which aligns with the description provided to Vox.
On Tuesday morning, Trump promised that his forthcoming actions would provide “great HealthCare to many people.”
But experts have warned they could significantly destabilize the Obamacare markets.
Association health plans, explained
An association health plan, as Vox’s Sarah Kliff has previously explained, is a way for a group of small businesses pool together to buy insurance, giving them more purchasing power and access to cheaper premiums. A group of bakeries, for example, might form a bakers association and purchase health coverage together. The most famous examples have been farm bureaus, which allowed independent farming businesses to band together and get insurance.
Before Obamacare, national associations could pick and choose which states’ insurance rules they wanted to follow and use those rules to guide the plans they offered nationwide. The bakers association could choose to follow the rules for, say, the Alabama insurance market, which mandates coverage of relatively few benefits, for all its bakeries in New York, a state with many mandates.
The result was often health insurance that skirted state rules and was a better deal for businesses with young and healthy employees, who are likely to prefer skimpier health plans. The former insurance regulator described the situation prior to the ACA to Kliff as being “a race to the bottom, with some associations offering lower-cost plans that covered virtually nothing.”
Obamacare changed these rules. Association health plans were treated as small businesses and were therefore required to cover all of the law’s mandated benefits.
Essential health benefits, mandating that insurers cover everything from hospital care to prescription drugs to maternity care, are central to the ACA’s insurance protections: They prevent plans from crafting their coverage to attract mostly young and healthy customers at the expense of older and sicker people, which had been one of the primary problems with the association health plan model before the law.
How Trump’s executive order could damage Obamacare
Requiring association health plans to follow the same rules as small businesses was one of the many ways the Affordable Care Act cracked down on skimpy health plans. Trump is now looking to roll back those changes.
Under the draft executive order as described, new regulations would allow association health plans to be considered large employers when it comes to health insurance. Large employers are not subjected to the same rules as individual or small-group plans under Obamacare. Most notably, they do not have to cover all of the law’s essential health benefits or meet the requirement that insurance cover a minimal percentage of a person’s medical bills.
If that change were made, association health plans would be freed to craft skimpier (and cheaper) health plans that appeal only to businesses with younger and healthier employees. Small businesses left in Obamacare’s marketplace would likely face higher costs and fewer options as the market became less attractive to insurers.
“It will destroy the small-group market,” Tim Jost, a law professor at Washington and Lee University who generally supports Obamacare, told me. “We’ll be back to where we were before the Affordable Care Act.”
The draft order did not specify whether individuals would also be allowed to buy into these associations health plans, as some Republicans like Paul want. But, according to the source, the regulations resulting from the order could potentially be written to allow self-employed people to buy into the now-deregulated association market, which would be an even bigger blow to Obamacare.
The self-employed individuals likely to flee the law’s markets for association plans would probably be younger and healthier, leaving behind an older, sicker pool for the remaining Obamacare plans. That has the makings of a death spiral, with ever-increasing premiums and insurers deciding to leave the market altogether.
“The ability for individuals to purchase health insurance through an association really puts the individual market at risk and destabilizes it over the long term,” Lucia said. “When you have market segmentation, it over time leads to higher premiums and it becomes less attractive to carriers.”
Trump is also eyeing short-term coverage to undercut the health law
Trump’s executive order would also expand what’s called short-term limited duration insurance. These short-term policies typically have higher out-of-pocket costs and cover fewer services than traditional insurance. They were designed for people who, for example, expect to be out of work and therefore without insurance for a limited period of time.
That kind of coverage is totally free from the health care law’s insurance regulations: the mandate to cover essential health benefits, the prohibition on charging sick people more than healthy people or denying people coverage based on their medical history, and so on.
Short-term insurance had previously been allowed to last as long as 364 days. The Obama administration, in an effort to curtail the use of such coverage to circumvent the health care law, shortened it to three months. Trump’s draft order would reverse that rule, once again allowing people to buy this non-Obamacare coverage for almost an entire year, my source said.
The effect would be much the same as the changes to association health plans: Healthier people would be the consumers most likely to use this escape hatch to find cheaper, if far less comprehensive, coverage outside of Obamacare — though they would still be subject to the law’s individual mandate, as short-term insurance is not considered sufficient.
“If you allow them to sell 364-day policies, or policies that are renewable, that’s just going to suck a lot of the healthy people out of the individual market,” Jost said.
And here, again, fewer healthy people in the Obamacare market means higher costs to insurers, which leads to higher premiums and possibly more insurers dropping out.
“Consumers are going to face a less stable, less competitive individual market,” Lucia said.
The ultimate impact on Obamacare will depend on the final language of the executive order Trump signs. But based on the draft described to me, Trump is readying the devastating blow to the health care law that congressional Republicans have so far failed to deliver.
The new policy reignites the battle over one of the health care law’s most controversial provisions.
The Trump administration will allow virtually any employer to claim a religious or moral objection to Obamacare’s birth control coverage mandate under a sweeping rollback announced Friday.
The new policies, which take effect immediately, reignite a fierce battle over one of the health care law’s most controversial provisions and quickly drew legal challenges. The requirement to provide FDA-approved contraception at no cost was long opposed by religious groups that heavily favored Trump, and has been wrapped up in litigation for more than five years.
“The United States has a long history of providing conscience protections in the regulation of health care for entities and individuals with objections based on religious beliefs or moral convictions,” the administration wrote in new rules.
The American Civil Liberties Union said it will file a lawsuit on Friday to block the long-anticipated rules from the Trump administration, and California Attorney General Xavier Becerra also announced plans to sue. Women’s health groups for months have been preparing lawsuits against the new policies, which they say will enable employers to deny their workers access to needed care.
The Trump administration said it was acting to protect individuals and groups from being forced to violate their religious beliefs as it downplayed concerns that more women would struggle to afford birth control.
“The attempts by the previous administration to provide some protections were inadequate,” said a senior HHS official of the Obama administration’s efforts to provide workarounds for religious groups. “They are being rebuffed here.”
The administration issued two rules — one outlining how an employer could claim an exemption for religious beliefs, the other outlining an exemption for sincerely held moral convictions — on the same day Attorney General Jeff Sessions called for sweeping protections for religious freedom in a government-wide memo that could have far-reaching implications.
The new birth control rules hew closely to a draft that leaked in May and drew swift condemnation from Democrats, public health groups and women’s health care advocates.
“Today’s outrageous rules by the Trump Administration show callous disregard for women’s rights, health, and autonomy, said Fatima Goss Graves, president and CEO of the National Women’s Law Center. “By taking away women’s access to no-cost birth control coverage, the rules give employers a license to discriminate against women. We will take immediate legal steps to block these unfair and discriminatory rules.”
It’s unclear how many organizations will now look to drop birth control coverage from their insurance plans. In the aftermath of the Supreme Court’s 2014 Hobby Lobby ruling that closely held private companies could seek an exemption on religious grounds, only a few dozen employers requested one from the Obama administration, POLITICO found last year.
The birth control coverage mandate is broadly supported by the general public, polling has found over the years. And it appears to have reduced women’s spending on contraception. One study estimated that women saved $1.4 billion on birth control pills in 2013 as a result of the coverage requirement. About 55 million women have directly benefited from no-cost birth control, according to an Obama administration report released last year.
“Any move to decrease access to these vital services would have damaging effects on public health and women’s health,” said Haywood Brown, director of the American Congress of Obstetricians and Gynecologists.
Trump hinted at his plan to roll back the birth control mandate this spring as he signed an executive order on religious freedom, but the regulation had been tied up at his budget office for more than four months. By weakening the mandate, Trump is unilaterally paring back a small piece of Obamacare detested by his conservative base, which has grown increasingly frustrated with the GOP’s inability to fulfill its longstanding promise to repeal the health care law.
The Affordable Care Act’s birth control mandate took effect in 2012 after the Obama administration accepted a recommendation from an independent panel to require plans to cover it at no cost to women. The administration exempted houses of worship and unsuccessfully tried to make accommodations for religiously affiliated groups to allow their employees to still receive the coverage from a third party. But those groups rejected the accommodations and filed dozens of lawsuits, leading to two separate Supreme Court challenges, including the Hobby Lobbydecision.
The Supreme Court last year ordered the Obama administration and religiously affiliated organizations, such as universities and charities, to reach agreement on an accommodation that would let employees of such groups have access to no-cost contraception. They never resolved the issue.
Advocates for religious groups called the rule a major step forward after years of fighting the mandate.
“Today President Trump delivered a huge victory for conscience rights and religious liberty in America,” said Susan B. Anthony List President Marjorie Dannenfelser in a statement. “No longer will Catholic nuns who care for the elderly poor be forced by the government to provide abortion-inducing drugs in their health care plans.”
The Trump administration argues that women have affordable contraceptive options should employers drop coverage, and that several government programs provide free or subsidized contraception for low-income women, including Title X family planning grants.
But women’s health advocates say that program is already underfunded, and other Trump administration priorities — including stalled plans to repeal Obamacare and defund Planned Parenthood — would further erode access to affordable birth control.
“President Trump’s shameful war on women rages on,” said Rep. Jan Schakowsky (D-Ill.) in a statement. “By ending the birth control mandate, the President and his Administration are allowing employers to stand in the way of women accessing the healthcare that they and their doctors have deemed necessary.”
The Trump administration will immediately soften the Affordable Care Act’s contraception mandate, broadening exemptions for employers who have a religious or moral objection to helping provide birth control to their employees.
What’s happening: Churches and some religious organizations have always been exempt from the contraception mandate, but the Trump administration is broadening the exemptions to all nonprofit organizations as well as for-profit companies, including publicly traded corporations.
Key points: These are broad exemptions.
Allowing exemptions based on a “moral” objection is a big step. Previous exemptions and carve-outs were limited to employers’ religious beliefs.
When the Supreme Court ruled that Hobby Lobby should be able to get an exemption from the mandate, it limited its decision to companies that are closely controlled by a few people. Hobby Lobby, for example, already closed on Sundays and otherwise reflected the faith of its owners. These new rules will allow any company to seek an exemption.
The background: The ACA requires employers to include certain preventive services — including contraception — in their employees’ health care plans, without copays or other forms of cost-sharing. Churches have always been exempt. The Supreme Court also allowed an exemption for closely held corporations whose owners have a religious objection to contraception.
The Obama administration had tried to work out a middle ground for other “religious-affiliated” employers, but they said that process was still an encroachment on their religious liberty.
The U.S. Supreme Court on Monday held that church-affiliated hospitals do not have to comply with the federal Employee Retirement Income Security Act, which governs employee pensions.
Here are five things to know about the case and the high court’s ruling.
1. The Supreme Court agreed in December to take up appeals filed by religiously affiliated hospital systems that were accused of underfunding their employee pension plans.
2. In three lawsuits, which were consolidated into one case, the high court was asked to decide whether the health systems can rely on their church affiliations to avoid complying with ERISA, which requires pension plans to have adequate funding to pay their promised benefits.
3. The lower courts said each of the three hospital systems — Saint Peter’s HealthCare System in New Brunswick, N.J., Dignity Health in San Francisco and Advocate Health Care in Downers Grove, Ill. — misclassified their pensions as “church plans” exempt from ERISA.
4. In an 8-0 ruling issued Monday, the Supreme Court overturned the lower court decisions that could have cost the health systems billions of dollars combined. Supreme Court Justice Neil Gorsuch did not participate in Monday’s decision, as he joined the court after arguments were presented in the case.
5. Justice Elena Kagan, writing for the court, said ERISA’s religious exemption applies to pension plans established by churches themselves and those established by organizations affiliated with churches.
“Because Congress deemed the category of plans ‘established and maintained by a church’ to ‘include’ plans ‘maintained by’ principal-purpose organizations, those plans — and all those plans — are exempt from ERISA’s requirements,” wrote Ms. Kagan.
St. Louis-based Ascension Health ended a class-action lawsuit filed against the system and subsidiary Wheaton Franciscan Services in Glendale, Wis., alleging Wheaton erroneously treated its pension plan as a “church plan” exempt from the federal Employee Retirement Income Security Act, Bloomberg BNA reports.
Under the settlement, Ascension will pay $29.5 million in benefit payments for Wheaton’s retirement plan and up to $2.25 million in legal fees and expenses. Court papers filed Sept. 1 show the deal mandates Ascension to guarantee payment of the $29.5 million for the benefits if the plan cannot cover the costs, the report states.
Ascension and Wheaton denied the allegations in filed court papers, St. Louis Business Journal reports. The settlement requires court approval before it is finalized.
In June, the U.S. Supreme Court held church-affiliated hospitals are not required to comply with ERISA, which governs employee pensions.
HENRY KOTULA 