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GOP Rushes Individual Reinsurance Fund Into Health Bill

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Members of the House Rules Committee today added a $15 billion individual major medical insurance risk sharing program to H.R. 1628, the American Health Care Act.

The committee voted on the proposal during a hastily scheduled meeting. The committee first showed the amendment text to members about an hour before the vote, according to Rep. Jared Polis, D-Colo., one of the members.

Members approved the AHCA amendment by a 9-2, party-line vote.

The amendment would make the $15 billion in funding available for a period running from Jan. 1, 2018, through Dec. 31, 2026, according to the amendment text.

— (Related on ThinkAdvisor: 4 ACA change paths that just got more popular)

The authors of the amendment call for the Centers for Medicare and Medicaid Services, an arm of the U.S. Department of Health and Human Services, to use the cash to start a Federal Invisible Risk Sharing Program.

The authors seem to assume that the program would operate like a reinsurance program. They say that the CMS administrator would run the program and set the program parameters, including the program “attachment point,” or the point at which a patient’s claims would be large enough that the program would begin to send cash to the insurer. Seema Verma, who is best known for helping to add a health reimbursement arrangement option to the Indiana Medicaid program, was recently confirmed as the CMS administrator.

The Affordable Care Act created a temporary reinsurance program that used a fee imposed on health plans to reimburse issuers of individual coverage for part of the expense of covering high-cost enrollees. The original ACA reinsurance program expired at the end of 2016.

The new amendment does not appear to create the kind of program known as a “high-risk pool” in the past. In the past, a high-risk pool, or risk pool, was a special health plan for people with health problems that kept those people from qualifying for medically underwritten health coverage. The ACA now prohibits health insurers from considering health factors other than location when deciding whether to issue individual and small-group coverage. The ACA prohibits insurers from using factors other than location, age and tobacco use to calculate rates. The H.R. 1628 amendment approved today would not affect the ACA medical underwriting rules.

The House was supposed to start a two-week break from work in Washington today. The House schedule website now shows the House could return to work Saturday.

— (Related on ThinkAdvisor: Blue Cross Carrier to End Iowa Individual Sales in 2018)

Rep. Jim McGovern, D-Mass., complained about the process Republicans used to hurry the amendment into the bill.

“Will Rogers once said, ‘If you find yourself in a hole, stop digging,’” McGovern said during the hearing, which was held in Washington and streamed live on the web. “You guys are digging a damn trench here.”

McGovern accused Republicans of going into back rooms and coming out with new amendments to solve political problems.

Rep. Pete Sessions, R-Texas, the House Rules chairman, told Polis that the committee added the invisible risk sharing provision partly because President Donald Trump wants to see the provision in the bill.

The House Rules Committee approved an earlier rule for House floor consideration of the AHCA on March 24. House Speaker Paul Ryan pulled the bill when it was clear it didn’t have the votes.

Sessions told Polis that the ideas in the underlying version of the bill covered by that rule is still being discussed.

“The dialog continues,” Sessions said.

A successful effort to change the ACA might affect agents and advisors in the life insurance, annuity and financial planning sectors, as well as the health insurance sector. Republican leaders in Congress are hoping a new ACA change law will generate savings by reducing federal spending. Drafters of a tax bill could than use the ACA-change savings to compensate for the effects of tax cuts.

— Read Trump’s Safe and Sane ‘Regulatory Reform’ Idea on ThinkAdvisor.


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