Health Care Sharing Ministries (HCSMs) after Tax-Penalty Repeal

By Aobo Dong

The passage of the Republican tax reform bill affects the health care industry in ways that might be confusing and unpredictable for tens of millions of Americans. Due to political rhetoric and inaccurate portrayal of the bill, it seems as if the Individual Mandate – an essential element in the ACA – has been fully repealed. Nonetheless, as Health Affairs rightly points out, Section 5000A still remains in the statute to require “minimal essential coverage” for all individuals. Therefore, although the tax bill repealed the tax penalty for not having insurance coverage, the law still technically mandates individuals to acquire health insurance. Moreover, the tax penalty repeal will not take effect until the 2019 tax year, so individuals who are uninsured for more than 2 months in the 2018 tax year may still be liable for paying the tax penalty, unless future laws and regulations, or an executive order from Trump, indicates otherwise.

Under the new regulatory landscape, what could be some potential repercussions for Health Care Sharing Ministries (HCSMs)? These ministries, largely run by evangelical Christians who believe in the merit of private cost sharing, have been benefiting from the Individual Mandate since the inception of the ACA. Under Section 5000A, HCSM members are exempt from paying the tax penalty. The dearth of legal exemptions available and the widespread dislike of Obamacare among white evangelical communities in America likely fueled the rapid growth of HCSMs in recent years. Members pay their monthly “shares” to each other to cover health insurance expanses, without going through a central insurance or governmental agency for redistribution. Continue reading

Slightly Hazy: An Insurer’s Emergency Room Policy Draws Congressional Scrutiny

By Oliver Kim

Last year, I had the good fortune to present at the Petrie-Flom Center’s conference on transparency and I started with an anecdote about a congressman who decided to wait rather than take his son immediately to the emergency room after he injured himself. The congressman assumed his son only had a sprain, but he had actually broken his arm. So why the wait? Because of a difference in his co-pay. In an interview, the congressman argued for policies to push consumers to understand—and be exposed to— healthcare costs in order to make better decisions about their care: “Way too often, people pull out their insurance card and they say ‘I don’t know the difference or cost between an X-ray or an MRI or CT Scan.’ I might make a little different decision if I did know (what) some of those costs were and those costs came back to me.”

The congressman’s policy prescription is becoming reality: last year, the largest Blue Cross Blue Shield plan Anthem announced a new policy where it would deny coverage for care provided in an emergency room that was later deemed non-emergent (except in certain circumstances). It seems a far cry from simply charging an ER co-pay, but Anthem argues it has seen a rise in non-emergency care being provided in emergency rooms. How are patients supposed to know if the ache or pain they are experiencing is not an emergency? Apparently there is a spreadsheet of over 1,900 ailments that Anthem considers non-emergent.

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REGISTER NOW! Will Value-based Care Save the Health Care System?

Will Value-based Care Save the Health Care System?
March 2, 2018 9:00 AM – 5:00 PM
Wasserstein Hall, Milstein East ABC (2036)
Harvard Law School, 1585 Massachusetts Ave., Cambridge, MA

Value-based health care is one of the most pressing topics in health care finance and policy today. Value-based payment structures are widely touted as critical to controlling runaway health care costs, but are often difficult for health care entities to incorporate into their existing infrastructures. Because value-based health care initiatives have bipartisan support, it is likely that these programs will continue to play a major role in both the public and private health insurance systems. As such, there is a pressing need to evaluate the implementation of these initiatives thus far and to discuss the direction that American health care financing will take in the coming years.

To explore this important issue, the Petrie-Flom Center for Health Law Policy, Biotechnology, and Bioethics is collaborating with Ropes & Gray LLP to host a one-day conference on value-based health care. This event will bring together scholars, health law practitioners, and health care entities to evaluate the impact of value-based health care on the American health care system.

This event is free and open to the public, but seating is limited and registration is required. Register now!

Sponsored by the Petrie-Flom Center for Health Law Policy, Biotechnology, and Bioethics at Harvard Law School with support from the Oswald DeN. Cammann Fund and Ropes & Gray LLP.

Limited Seats Still Available, Register Now! 12/12: Sixth Annual Health Law Year in P/Review

The Sixth Annual Health Law Year in P/Review symposium will feature leading experts discussing major developments during 2017 and what to watch out for in 2018. The discussion at this day-long event will cover hot topics in such areas as health policy under the new administration, regulatory issues in clinical research, law at the end-of-life, patient rights and advocacy, pharmaceutical policy, reproductive health, and public health law.

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REGISTER NOW (12/12)! Sixth Annual Health Law Year in P/Review

The Sixth Annual Health Law Year in P/Review symposium will feature leading experts discussing major developments during 2017 and what to watch out for in 2018. The discussion at this day-long event will cover hot topics in such areas as health policy under the new administration, regulatory issues in clinical research, law at the end-of-life, patient rights and advocacy, pharmaceutical policy, reproductive health, and public health law.

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REGISTER NOW (12/12)! Sixth Annual Health Law Year in P/Review

The Sixth Annual Health Law Year in P/Review symposium will feature leading experts discussing major developments during 2017 and what to watch out for in 2018. The discussion at this day-long event will cover hot topics in such areas as health policy under the new administration, regulatory issues in clinical research, law at the end-of-life, patient rights and advocacy, pharmaceutical policy, reproductive health, and public health law.

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The Cost of Medications: Current Realities and the Future of Pharmaceutical Pricing Regulations in the United States

The Cost of Medications: Current Realities and the Future of Pharmaceutical Pricing Regulations in the United States
October 4, 2017 12:00 PM
Wasserstein Hall, Milstein East B (2036)
Harvard Law School, 1585 Massachusetts Ave., Cambridge, MA

From “Pharma Bro” Martin Shkreli to huge price jumps for the EpiPen to the Hepatitis C treatment that costs $1000 per pill, pharmaceutical pricing is a major issue in the news and in Washington. The regular introduction of new, often expensive therapeutics as well as controversial price increases for familiar drugs attract bipartisan attention and ensure that drug costs will remain an important topic of public policy debate.

This panel of experts will discuss current laws and regulations governing pharmaceutical pricing in the United States, the impact of breakthrough therapeutics on drug pricing, and the future of drug pricing policy in the United States.

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What’s Next for the ACA?: A Lecture by Larry Levitt

What’s Next for the ACA?: A Lecture by Larry Levitt
October 3, 2017 12:00 PM
Wasserstein Hall, Room 1010
Harvard Law School, 1585 Massachusetts Ave., Cambridge, MA

Join Larry Levitt for a talk about the future of the Affordable Care Act and health care in America.

Larry Levitt is Senior Vice President for Special Initiatives at the Kaiser Family Foundation and Senior Advisor to the President of the Foundation. Prior to joining the Foundation, he served as a Senior Health Policy Advisor to the White House and Department of Health and Human Services. He holds a bachelors degree in economics from the University of California at Berkeley, and a masters degree in public policy from Harvard University’s Kennedy School of Government.

This event is free and open to the public.

Sponsored by the Center for Health Law Policy and Innovation, the Petrie-Flom Center for Health Law Policy, Biotechnology, and Bioethics, and the Harvard Health Law Society, all at Harvard Law School.

ERISA and Graham-Cassidy: A Disaster in Waiting for Employee Health Benefits and for Dependents under 26 on their Parents’ Plans

Graham Cassidy § 105 would repeal the ACA “employer mandate”.  Although its sponsors claim that the bill will give states a great deal of flexibility, it will do nothing to help states ensure that employers provide their employees with decent health insurance; quite the reverse.  It will also give employers the freedom to ignore the popular ACA requirement that allows children up to age 26 to receive coverage through their parent’ plans, at least when their parents get health insurance from their employers.  Here’s why.

The Affordable Care Act (ACA) was designed to foster and build on health insurance plans that employers in the US provide to their employees.  With limited exceptions such as provisions about wellness plans, it left in place the Employee Retirement Income Security Act of 1974 (ERISA), the federal statute that governs benefits that employers offer their employees.  Rather than amending ERISA to place new federal requirements on employer-provided plans, ACA imposed a tax penalty (called a “shared responsibility payment”) on employers (with at least 50 full-time equivalent employees) with employees who receive tax credits for purchasing insurance through the ACA exchanges.  This is the ACA “employer mandate,” aimed to deter employers from dumping their existing health care plans.  It is the ACA provision that supported the mantra: “you’ll get to keep the insurance you have.” This mandate is imposed through a tax and otherwise leaves in place the regulatory vacuum created by ERISA.  Let me explain how.

ERISA, enacted in 1974, is the federal statute that governs employee “welfare” plans: benefits, including health benefits, that employers offer their employees.  Although ERISA imposes quite substantial requirements on pension plans, it imposes only disclosure and fiduciary responsibilities on welfare plans.  Employers must state clearly for their employees what they are given—but may also reserve the right to change plans, as long as they tell their employees that they might do this.  Employers also must manage their plans as a good fiduciary would, but this does not mean that employers must offer minimum benefits to their employees, or indeed any benefits at all. Continue reading

What’s Next for the ACA?: A Lecture by Larry Levitt

What’s Next for the ACA?: A Lecture by Larry Levitt
October 3, 2017 12:00 PM
Wasserstein Hall, Room 1010
Harvard Law School, 1585 Massachusetts Ave., Cambridge, MA

Join Larry Levitt for a talk about the future of the Affordable Care Act and health care in America.

Larry Levitt is Senior Vice President for Special Initiatives at the Kaiser Family Foundation and Senior Advisor to the President of the Foundation. Prior to joining the Foundation, he served as a Senior Health Policy Advisor to the White House and Department of Health and Human Services. He holds a bachelors degree in economics from the University of California at Berkeley, and a masters degree in public policy from Harvard University’s Kennedy School of Government.

This event is free and open to the public.

Sponsored by the Center for Health Law Policy and Innovation, the Petrie-Flom Center for Health Law Policy, Biotechnology, and Bioethics, and the Harvard Health Law Society, all at Harvard Law School.

New CBO Analysis: Cutting Subsidies Would Backfire on Trump

By Wendy Netter Epstein 

The cost-sharing reduction payments are an essential component of the ACA.  These payments reduce out-of-pocket costs for lower income enrollees so that individuals can actually use their insurance coverage and not be prevented from seeking care because of a high deductible or a copay they can’t afford.  President Trump has been threatening since he took office to end these payments.  And there is at least some possibility that he has the authority to do (see House v. Price).

Politically speaking, Trump’s goal in threatening to end these payments is either to hasten what he sees as the inevitable demise of Obamacare—or at least to use the threat of ending the payments to hold the feet to the fire of those who have resisted “repeal and replace.”  Either way, Democrats have widely condemned Trump’s threats and the instability they cause in the market. Continue reading

How to Destabilize Insurance Markets Without Really Trying

Cross-posted from the Take Care blog

On Thursday, Senate Majority Leader Mitch McConnell released the latest draft of his effort to repeal the Affordable Care Act (ACA). As of last night, it appears that this version of the bill is dead, with four Senators declaring that they won’t vote to move it forward. But provisions of this bill are worth talking about, both for what they reveal about health insurance and for what they reveal about the process by which the Senate is considering ACA repeal.  The latest draft contains a number of new provisions, but two caught my eye: (1) Senator Ted Cruz’s attempt to bifurcate the individual insurance market and (2) a clause about membership in a health care sharing ministry as satisfying the requirement of “continuous creditable coverage.”

The Cruz amendment has received a large amount of coverage both in the popular press and by more specialized policy outlets. But there has been little attention to the clause about health care sharing ministries. Fortunately, I wrote a 5,000 word book chapter on the ministries as part of an academic conference in 2015 (here I am presenting on the topic, if you’re really interested). Continue reading

Will the Recent Workplace Wellness Bill Really Undermine Employee Health Privacy?

By Jessica L. Roberts

While the effort to repeal and replace the Affordable Care Act (ACA) has taken center stage, another health-related bill has been making its way through the House without nearly as much attention. On March 2, 2017, Representative Virginia Foxx (R-NC) introduced House Resolution (HR) 1313 on behalf of herself and Representative Tim Walberg (R-MI).   The bill would lift current legal restrictions on access to genetic and other health-related information. Specifically, HR 1313 targets provisions of the Americans with Disabilities Act (ADA) that prohibit employers from conducting unnecessary medical examinations and inquiries that do not relate to job performance; the Genetic Information Nondiscrimination Act’s (GINA) provisions proscribing employers from requesting, requiring or purchasing the genetic information of their employees; and GINA’s prohibition on group health insurance plans acquiring genetic information for underwriting purposes and prior to enrollment. The bill passed through the Committee on Education and the Workforce last Wednesday along strict party lines with 22 Republicans supporting the proposed legislation and 17 Democrats opposing it.

Despite the public outcry against the bill, HR 1313 may not be as far-reaching as it initially appears. First, while advocates of genetic privacy fear the worst, both the ADA and GINA contain exceptions for wellness programs that already allow employers to access at least some employee health data. Second, even if HR 1313 passes, employees would still enjoy the ADA’s and GINA’s antidiscrimination protections.   HR 1313 could well give employers additional access to genetic and other health-related information about their employees but it is not a license to then use that information to discriminate.

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Medicare Advantage Might Have Potential — If Companies Play Fair

By Shailin Thomas

Medicare Advantage was introduced as a mechanism for capturing some of the oft-extolled efficiencies of the private health insurance market. Instead of paying providers for services directly, as in traditional Medicare, the government pays Medicare Advantage insurers a predetermined, risk-adjusted amount of money per patient to cover all medical expenses for the year. The risk adjustment ensures that companies insuring Medicare Advantage patients with chronic diseases — who will likely need more intensive, expensive care — receive additional funds to help cover those costs. For each qualifying condition a patient has, the Medicare Advantage plan receives on average an additional $3000 annually.

While the risk adjustment of Medicare Advantage payments was well intentioned and economically rational, it appears to have opened up an avenue for significant abuse on the part of Medicare Advantage insurers. The Department of Justice recently joined a lawsuit against UnitedHealth, a large provider of Medicare Advantage plans, for allegedly defrauding the government out of hundreds of millions, if not billions, of dollars. The complaint alleges that UnitedHealth “upcoded” its risk-adjustment claims by submitting for conditions patients did not actually have and refusing to correct false claims when it discovered or should have discovered them. In essence, the company allegedly realized it could extract more money out of the government by making the patients it covers appear sicker than they actually are, and took full advantage of that.

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What is the Meaning of Trump’s Day 1 Executive Order on the ACA?

Guest Post by Erin C. Fuse Brown

On the day of his inauguration, President Trump signed an executive order instructing the executive branch agencies to exercise their discretion and authority to  “waive, defer, grant exemptions from, or delay the implementation of” fees, taxes, or penalties under the Affordable Care Act (ACA).

The order does not specify which “fiscal burdens” it targets, but the individual mandate, the employer mandate, and the various industry and payroll taxes imposed by the law immediately jump to mind. These are all written into the law, and the President cannot unilaterally set them aside. The executive order says it is following the law, including the Administrative Procedure Act, which is good because it means the President is not instructing anyone to flout the law. Even existing ACA rules cannot be undone overnight and can only be changed or repealed through a lengthy notice-and-comment rulemaking process.

There is such a thing as “enforcement discretion,” which some suggest means that the individual mandate won’t be enforced anymore. I’m not so sure. If the President instructed the IRS to stop collecting taxes from billionaires under its enforcement discretion, that wouldn’t be legal. Continue reading

LIVE ONLINE TODAY @ NOON: President-Elect Trump’s Health Policy Agenda: Priorities, Strategies, and Predictions

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Webinar: President-Elect Trump’s Health Policy Agenda: Priorities, Strategies, and Predictions

Monday, December 19, 2016, 12:00 – 1:00pm

WATCH LIVE ONLINE!: http://petrieflom.law.harvard.edu/events/details/president-elect-trumps-health-policy-agenda

Submit your questions to the panelists via Twitter @PetrieFlom.

Please join the Petrie-Flom Center for a live webinar to address what health care reform may look like under the new administration. Expert panelists will address the future of the Affordable Care Act under a “repeal and replace” strategy, alternative approaches to insurance coverage and access to care, the problem of high drug prices, innovation policy, support for scientific research, and other topics. The panel will discuss opportunities and obstacles relevant to President-elect Trump’s proposals, as well as hopes and concerns for health policy over the next four years. Webinar participants will have the opportunity to submit questions to the panelists for discussion.

Panelists

  • Joseph R. Antos, Wilson H. Taylor Scholar in Health Care and Retirement Policy, American Enterprise Institute
  • Lanhee J. Chen, David and Diane Steffy Research Fellow, Hoover Institution; Director of Domestic Policy Studies and Lecturer, Public Policy Program; affiliate, Freeman Spogli Institute for International Studies, Stanford University
  • Douglas Holtz-Eakin, President, American Action Forum
  • Moderator:Gregory Curfman, Editor-in-Chief, Harvard Health Publications

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Will Medicare Reform be a Republican Obamacare?

By Shailin Thomas

As the health care community waits with bated breath to see what will become of the Affordable Care Act under the Trump administration, Republicans in Congress have set their sites on another health-related initiative that has been on their wish list for years: reforming Medicare. While Trump promised throughout his campaign not to change the fundamental ways in which Medicare works — in part to appeal to older voters, who overwhelming would like the program to stay as it is — shortly after the election, “modernizing Medicare” appeared as a priority on the transition website for the new administration.

The reform many Republicans are pushing for — championed by Speaker of the House Paul Ryan (R-WI) — is privatization along the lines of Medicare Advantage. Instead of providing for full insurance coverage through the government, as traditional Medicare currently does, Ryan’s proposal would have eligible patients purchase insurance from private companies with financial assistance from the government. The theory is that by having private insurers provide coverage, Medicare will capture efficiencies of the private market, while simultaneously offering consumers more choice in the coverage they receive.

After Paul Ryan first unveiled this plan in 2011, the Kaiser Family Foundation released a report detailing the significant fiscal problems with this “modernized” vision of Medicare. According to the Foundation’s analysis, the average out-of-pocket expense for beneficiaries increase from $5,630 under the current system to $12,500. The reason for this increase, according to the Congressional Budget Office, is that providing coverage is actually more expensive for a private insurer than it is for the government.  The proposal faces other economic challenges as well, and ironically, some of them stem from its close resemblance to Obamacare.

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Health Insurance, Veterinary Care, and the Not-So-Secret Benefits of Pets

By Shailin Thomas

Pet ownership is incredibly popular in the United States. There are almost 70 million companion dogs spread across 43 million American households.   This isn’t particularly surprising, given that study after study has shown that companion animals promote healthier, happier, longer lives for their owners. Despite pet popularity and prevalence, though, many pet owners don’t fully understand how expensive their four-legged family members can be — especially if they end up needing extensive veterinary care. Every year, millions of companion animals are euthanized because their owners lack the financial resources to pay for necessary veterinary services. Unlike in human medicine, pets in the hospital with readily curable ailments often go untreated for financial reasons.

How can we help people keep and care for their pets — capturing companion animal health benefits while also ensuring those pets receive the veterinary care they need? The answer might be found in the synergies between animal and human health — and the benefits they entail for health insurance providers.

The health benefits of companion animals have been extensively documented in both the scientific literature and the mainstream media. Pet owners have, inter alia, decreased risk of cardiovascular disease, decreased risk of anxiety and depression, decreased incidence of allergies, and increased immune system function. Some insurance companies even have materials for their customers promoting pet ownership because of these benefits. The health conditions ameliorated by animal companionship are often otherwise treated with doctor’s visits, medications, and other expensive interventions paid for in large part by insurance providers. In other words, pet ownership produces positive externalities on insurance providers by decreasing the amount they pay in traditional medical services for these ailments — and insurance companies have an interest in incentivizing animal companionship.

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Ambulances are Monopolies — and They Should Be Regulated Accordingly

By Shailin Thomas

You go to your local urgent care with a headache and a fever, and the doctor suggests a trip to the hospital for further evaluation — just to make sure there isn’t anything serious causing your symptoms. She offers an ambulance, and you accept. You could probably walk or Uber, but you’re not feeling well, and the doctor has offered to arrange the ride. Why not?

This was the story of Joanne Freedman. She didn’t think too much about it, until she received a $900 bill for the two-block ambulance ride she took to the hospital. While Joanne’s experience was particularly egregious, it is not wholly uncommon. Ambulance pricing is one of the most variable and least transparent components of health care costs, with rides ranging from tens to thousands of dollars. This is in part because there are many ambulance providers, and they all have different relationships with different insurance companies. It’s also in part because ambulance rates are generally set according to the services the ambulance is equipped to provide, not necessarily the services actually provided. Some ambulance companies have contracts with municipalities that make them the only game in town, while others are in more diverse markets with multiple providers competing for patients. All this combines to create an incredibly complex industry with very little consistency from ambulance to ambulance.

But is this disjointed, free-market system the best way to structure emergency transportation? The arguments underlying the justification of a free, unregulated market hinge on the ability of consumers to police the industry through choice. If the seller of a good sets the price too high, consumers will buy from a different seller until she brings the price down to what consumers are willing to pay.  This is, in theory, what allows markets to find the right prices for goods and services more efficiently than any government agency or regulator ever could. Continue reading

The Evolving Crisis of the ACA Exchange Marketplace

By Zack Buck

Following news last week that Aetna was pulling out of health care insurance exchange markets in eleven states, Pinal County, Arizona became the epicenter in the rapidly evolving and growing crisis facing the Affordable Care Act’s insurance exchanges.  Sandwiched between Phoenix and Tucson, Pinal County is home to about 400,000 residents, but no insurance companies; in short, Pinal County has been left without any insurance companies signed up to sell insurance on the exchange to its residents for 2017—becoming the “county that Obamacare forgot.”

Pinal County had nearly 10,000 citizens sign up on the exchange in 2016, but Aetna’s departure bookends a rough period for Pinal County residents.  In addition to Aetna, the county has recently endured the departure of UnitedHealth Group, Humana, and a non-profit co-op from Arizona’s exchange.  As a result, Pinal County is reportedly looking to other insurers who may be interested in selling on the exchange to its residents; in a bit of hopeful news, Blue Cross Blue Shield of Arizona is said to be “re-evaluating where it will offer plans next year.”

But the crisis isn’t contained to Pinal County.  Two states—Tennessee and Alaska—have been trying to avoid a similar fate.

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