Transcript The 2010 Election Cycle - Pennsylvania Association of Health

What’s Next for Health Care
Reform?
Vince Phillips
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One Week’s News November 2016
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Health care takes up 7.6% of employer budgets, an average of $8,669 per
employee.
Willis Towers Watson forecast group rate increases of 7-8% for fully insured plans
versus 4-5% for fully-insured plans.
Democratic Socialist Senator Bernie Sanders (VT) and Democratic Rep. Elijah
Cummings MD) called on Federal Trade Commission to examine whether insulin
price was deliberately kept high by drug manufacturers.
Accreditation Council for Graduate Medical Education says that first-year residents
can work longer than 16 hour shifts and up to 24 hours.
Oh yes, there was an election on November 8.
11/10/2016
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Overview
• Election Recap: National
• Election Recap: Pennsylvania
• Politics and Health Reform Positions
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President-elect Donald Trump Positions
Republican Positions
• ACA Federal Congressional Legislation
• Federal Regulatory Updates
• Takeaways
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Election Recap
• Trump wins 290 to 232 electoral votes
• Clinton has a slight majority in terms of
popular vote (233,390 or so out of 119.6
million votes cast)
• In New Hampshire, Clinton won by 1,437
votes. In Michigan, Trump won by 1,837
votes.
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Recap (continued)
• Republicans keep Senate control 51-45
• Some races may not be finalized:
- New Hampshire incumbent Republican Ayotto is 716 votes
behind out of 707,240 total votes cast.
- Louisiana must have a run-off per state rules of 2 top votegetters out of a 24-person race
Pennsylvania Republican Pat Toomey won by 99,869 votes over
Democrat Katie McGinty out of 5.9 million votes cast.
(Percentages: Toomey 48.9%; McGinty 47.2%; Libertarian Clifford
3.9%)
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Recap (continued)
• Republicans retain control of U.S. House 238 to 193, a 45-vote
margin with two very close California races and two Louisiana
races where a runoff is mandated because no one reached an
absolute majority.
• Democrats picked up six seats but needed 30.
• Pennsylvania: Republican edge remains 14-5 in its
congressional delegation. Open seats were retained by the
party that held the office before: Democrat in 2nd district
(Philadelphia); Republicans in 8th district (Montgomery/Bucks)
and 16th district (Lancaster/Chester)
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Recap: PA Races
• Democrats took top state offices:
- Attorney General- Democrat Josh Shapiro over GOP
John Rafferty by 150,582 votes out of 5.8 million
votes cast. (Rafferty is still a state Senator.)
- Auditor General – Democrat Eugene DePasquale over
GOP John Brown by 271,841 votes out of 5.45 million
votes cast.
- Treasurer – Democrat Joseph Torsella by 362,937
votes over GOP Otto Voit out of 5.42 million votes
cast.
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Recap: PA Races (continued)
• PA Senate: Republicans gained three new seats to
now have a veto=proof 34-16 relationship.
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Open seat vacated by 35th district Democrat John Wozniak (Cambria) went
to the GOP with 62% of the vote.
29th district Democratic incumbent Rob Teplitz (Dauphin/Perry) lost by
3,380 votes out of 118,802 votes cast.
48th district Democratic incumbent Sean Wiley (Erie) lost in a traditionally
Democratic district with 53% of the vote going to the GOP.
Other open seats stayed with their party. Philadelphia’s 3rd district
Democratic candidate was unopposed; Lancaster County 13th district
stayed with the GOP with 59%; Cumberland County’s 31st district stayed
Republican with 64% of the vote.
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Recap: PA Races (continued)
• PA House Republicans strengthened their
control by winning 3 Democratic seats while
losing only one seat.
• Policy wonk department: Of open seats, Republicans
retained 7, Democrats retained 9.
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Recap: PA House (continmued)
• Closest races:
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31st district (Bucks) Democrat Perry Warner, Jr. over GOP Ryan Gallagher
by 28 votes
115th district (Monroe) incumbent GOP David Parker lost to Democrat
Maureen Madden by 841 votes
146th district incumbent Tom Quigley (R) retained his seat by 574 votes
156th district, incumbent Republican Dan Truitt (Chester) won by 78 votes
161st district incumbent Democrat Leanne-Krueger-Branekey (Delaware)
won by 240 votes
168th district incumbent Republican Chris Quinn (Delaware) won by 168
votes
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What’s In Store?
• President-elect Donald Trump
Restoring Patient Control and Preserving Quality in Healthcare
Any honest agenda for improving healthcare must start with repeal of the dishonestly
named Affordable Care Act of 2010: Obamacare. It weighs like the dead hand of the
past upon American medicine. It imposed a Euro-style bureaucracy to manage its
unworkable, budget-busting, conflicting provisions. It has driven up prices for all
consumers. Their insurance premiums have dramatically increased while their
deductibles have risen about eight times faster than wages in the last ten years. It
drove up drug prices by levying a $27 billion tax on manufacturers and importers and,
through mandated price cuts for drugs under Medicare and Medicaid, forced
pharmaceutical companies to raise prices for everyone else. We agree with the four
dissenting judges of the Supreme Court: “In our view, the entire Act before us is invalid
in its entirety. It must be removed and replaced with an approach based on genuine
competition, patient choice, excellent care, wellness, and timely access to treatment. “
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Trump Positions (continued)
• “In its place we must combine what worked best in the past
with changes needed for the future. We must recover the
traditional patient-physician relationship based on mutual
trust, informed consent, and confidentiality. To simplify the
system for both patients and providers, we will reduce
mandates and enable insurers and providers of care to
increase healthcare options and contain costs. Our goal is to
ensure that all Americans have improved access to affordable,
high-quality healthcare.”
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Trump Positions (continued)
• Repeal ACA and Replace with:
- Modify existing laws that inhibits sale of health insurance
across state lines
- Allow individuals to fully deduct premiums from tax returns
(like businesses can)
- Health Savings Accounts should be tax-free and allowed to
accumulate and HSA accounts be part of estates.
- Price transparency from all healthcare providers
- Convert Medicaid to block grants to states
- Remove barriers to entry from imported drugs
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Trump Positions (continued)
- Trump says that $11 billion is spent on illegal
immigrants’ health care.
- Reducing dependency on Medicaid and CHIP
can come about by an improved economy and
more jobs.
- Reform mental health programs and
institutions in this country using bipartisan
legislation already being developed in
Congress. (Democrats have this as well.)
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Congress/Republican Agenda
• More positions from GOP
- No Medicaid expansion
- Insurance regulation best at state level (Dems
federal; GOP pro states except health insurance being marketed
across state lines)
- Cap non-economic damage awards re medical
malpractice lawsuits
- Bring back Glass-Steagall Act
- Some interest in privatizing some Federal insurance
programs such as Flood and Crop Insurance
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Congress/Republican Agenda
• House Republicans Outline Their Health Agenda
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Cap tax exclusion for employer-paid premiums “shifting compensation away from
health insurance and towards take-home pay.”
- Tax credit for individual market purchase
- Promote self-funded plans and stop-loss insurance
- Association Health Plans allowing small businesses from different industries to
“band together” and allow individuals to create individual health pools
- Expand use of Health Savings Accounts, Health Reimbursement Arrangements:
~ Allowing employers to reimburse individual market premiums (HRAs)
~ Expanding access for H S As through TRICARE
~ Setting HSA maximum contribution at annual deduction + out of pocket limits
~ Retro coverage of medical expenses HSAs 60 days prior to setting up HSA
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Congress/Republican Agenda
• House Republicans (Continued)
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Overrule EEOC ADA and GINA interpretation of wellness plans
Insurance purchasing across state lines
$25 billion for State Innovation Grants for “developing effective reforms
that make health care more affordable and accessible”
$25 billion for high-risk pools
General Accountability Office study re removing McCarran-Ferguson (state
regulation of insurance)
Replace current Medicaid funding mechanism to a per capita allotment of
Federal dollars; Give states a block grant option
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Congress/Republican Agenda (continued)
• Employer tax exclusion on what firms pay for health benefits
• This was one of John McCain’s positions when he ran for President in 2008
and it appears in the GOP Platform in 2016: Equal tax treatment for
health coverage. The proposal would have replaced the special tax breaks
for employer-based health insurance with a universal system of health
care tax credits for the purchase of health insurance. These health care tax
credits of $5,000 for a family and $2,500 for an individual would be
indexed annually for inflation and would be available to Americans regardless of income, employment, or tax liability.
- Congressional Budget Office (CBO) study suggested that the exclusion
amounted to $248 billion in lost revenue to the Federal Government in
2013 and that lost revenue to Uncle Sam between 2013 and 2023 would
be $3.36 trillion.
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Congress/Republican Agenda (continued)
• But what about ‘Repeal and Replace’?
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Repeal ACA’s exchanges, employer and individual mandates, minimum benefits,
etc. (uncertain re MLRs, no-pay preventive care, repeal of taxes such as PCORI,
medical devices, sun tanning, Medicare surcharge, nutrition disclosure in
restaurants, smokers’ insurance penalty, nursing mothers’ rule, etc.)
- Some interest in continuing some popular ACA parts:
~ No pre-existing conditions
~ Dependents until age 26
~ No lifetime limits on coverage
~ No mid-term cancellations (recissions) or sickness non-renewals
~ Replace 300% age rating ratio with 5-to-1 ratio and give states options to change or simply get
rid of federal age banding
~ Continuous coverage and no increase above standard if serious medical issue
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Congress/Republican Agenda (continued)
• Particular Focus on ACA Taxes if Congress decides to
dismantle ACA piece by piece instead of all at once.
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40% Cadillac Tax, Health Insurance Tax, Medical Device Gross Sales (Excise)
Tax. NOTE: Both Republicans and Democrats have voted to abolish these
taxes. Re Medical Device Gross Sales Tax, in this session there were nine
bills, two of which (HR 160 and HR 319) passed the House; HR 3762
passed Congress and failed to override an Obama veto.
- Remove Employer and Individual Mandates and penalties
- Question marks on Medicare tax increase for those with high
incomes, 10% sales (excise) tax on tanning salons, removal of
$300,000 cap on deductibility of insurance company execs
salary.
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Congress/Republican Agenda (continued)
• Since the Affordable Care Act is so far-reaching, which of the
disparate parts be repealed?
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Expanded Public Health system dollars
Mandatory Restaurant nutrition notices
Targeted programs to help Indian populations
Medical Loss Ratio
Definition of ‘full-time’
HSA Permit payments for over counter medications (reversing ACA’s
prohibition)
Wellness incentives
Numerous Medicare provisions
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Federal Regulations under
President Trump
• On Day One, Trump said he would void President Obama’s
Executive Orders, some of which involve the Affordable Care
Act.
• Many agency notices involve prohibitions on perceived
discrimination, reprisals against whistleblowers, expansion of
first-dollar preventive care services.
• Trump also said that punitive rules would be rescinded…
• A ballpark guess is that there are over 1,000 rules and many thousands of
policy pronouncements, interpretations, and guidance to affected parties
such as employees.
• Will the broom sweep clean or will there be vetting of rules to see which
go and which stay?
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Federal Regulations under
President Trump
Examples:
• Short-term Coverage: Will Trump reverse the November 2016
CMS decision to limit short-term coverage to three months?
• Will Trump reverse the 2016 EEOC ruling on employerprovided wellness plans that it says work against ADA rules?
• Will hospitals be required to report undocumented aliens
when they receive care?
• Will the temporary exemption for those 65 or older from 2013 ACA
increase in medical deduction threshold to 10% (from 7.5% of AGI) which
expires after 2016 be continued?.
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Fed Reg Updates (Continued)
• Employee vs. Independent Contractor is not a new issue –
Workers’ Compensation & Uber/Lyft
• New is the US Department of Labor reinterpretation, adding ‘economic
dependency’ to traditional direction and control (Fair Labor Standards
Act). -- Tied to Federal concerns that some employers are trying to avoid
the Employer Mandate by redefining their employees as independent
contractors.
• Enforcement of this independent contractor
re-definition is a top DOL priority. May
employers assume that this will be on the
Trump chopping block?
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Fed Reg Updates (Continued)
• And What About…
• (Non-ACA) US Department of Labor new overtime
rules issued May 18,2016
• Increased income level for white collar workers to be
exempt from paying overtime from $455 per week
($23,660/year) to $913 per week ($47,476/year).
• Effective December 1, 2016
• Source: www.dol.gov/whd/overtime
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Fed Reg Updates (Continued)
• More on DOL FLSA Overtime Rule
• 3 tests must be met in order to claim a white
collar exemption: 1) Must be salary, not hourly 2) Salary
must at $913 per week ($47,476/year) . Note: This Rule is not
to be considered as a change in the minimum wage. 3)
Employee’s primary job duty must involve “kind of work
associated with executive, administrative, or professional
employees (the standard duties test)” Note: Job title alone
does not meet this test.
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Takeaways
• Prognostication is an art, not a science.
• My prognostication is that plans for 2017 will not be affected
since rates and forms (coverages) have already been approved
by the Insurance Department.
• Insurance companies have spent millions upon millions to
comply with the Affordable Care Act. That meant developing
whole new computer infrastructure and systems to comply.
Will they make a radical departure from the known?
• Rely on your broker to learn about changes coming to health
insurance and employee benefits.
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Takeaways (continued)
• Make sure you take the time to keep up with the news as it
relates to who President-elect Trump nominates and what he
says about his health agenda.
• Subscribe to a publication that focuses on employee benefits
such as Employee Benefit News
http://www.benefitnews.com/ The current e-issue (11/9/16)
has eight articles relating to the Trump Administration on
benefits issues.
• As a member of PAHU, your broker has access to numerous
state and national resources. When you receive
communication, please read it.
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Takeaways (continued)
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The November 10, 2016 article from Society for Human Resources Management
discusses prospects for repeal and replace.
https://www.shrm.org/ResourcesAndTools/hr-topics/benefits/Pages/Trump-ACArepeal.aspx?utm
The November 10, 2016 article in Politico
http://www.politico.com/story/2016/11/obamacare-defenders-vow-total-war231164 contained a number of interesting observations:
Outright repeal guarantees a Senate Democratic filibuster but Trump campaigned on outright
repeal
Regulatory dismantling would be the easiest path by exempting people from the Individual
Mandate, by expanding SEPs, by canceling regulations, withdrawing Executive Orders, no
longer oppose the various lawsuits brought against ACA, etc.
Ben Carson: ”I think the replacement obviously must come first and it must
be something that is very appealing and easy to understand. And then,
only then, would you dismantle what’s in place.”
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Discussion and Questions
National Association of
Health Underwriters
(NAHU)
www.nahu.org
www.pahu.org
Vince Phillips
PHILLIPS ASSOCIATES
(717) 346-1063 Office
[email protected]
[email protected]
vphillipsassoc.com
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