A Dozen Things To Know About The Trump Healthcare Executive Order and Elimination of CSR Payments

by Clive Riddle, October 13, 2017 1.       Attorney General Jeff Sessions issued a legal opinion to HHS and the Treasury Department that that money appropriated to HHS “cannot be used to fund” Cost Sharing Reduction (CSR) payments.   2.       The Trump administration has filed notice to the U.S. Court of Appeals for the D.C. Circuit, “that the Department of Health & Human Services (HHS) has directed that cost-sharing reduction payments be stopped because it has determined that those payments are not funded by the permanent appropriation for ‘refunding internal revenue collections.” they were not formally appropriated by Congress.   3.       Health Plans still have to provide marketplace subsidized discounts to low-income customers. Without CSR reimbursement, one must assume participating plans will raise premiums as soon as feasible.   4.       A CBO report indicates the decision to end CSR payment payments is likely to cost the federal government more than making the payments due to ACA required subsidies to cover anticipated premium increases.   5.       The health plans most impacted by the CSR elimination include mostly Blue Cross and Blue Shield companies and insurers focused on Medicaid, such as CenteneCorp. and Molina Healthcare Inc.   6.       CSR lawsuits are likely. Impacted health plans may sue. The Hill reports attorneys general from California and New York say they are prepared to sue the Trump administration to protect health-care subsidies that the White House said would be cut off.   7.       As Sam Baker, Axios healthcare editor posts, “Congress can solve this. University of Michigan law professor Nicholas Bagley, an expert on this issue, told me that if Congress appropriates the money for these subsidies, they would begin flowing again immediately.”   8.       The Trump Executive Order does not equate to immediate changes. As healthcare policy expert Timothy Jost posts in Health Affairs, the Executive Order “is a direction to draft rules. Under the Administrative Procedures Act these agencies will first have to publish proposed rules and then receive and respond to public comments before publishing the rules in final form. The fact sheet accompanying the order acknowledges that regulations will proceed through notice and comment rulemaking. This will likely take months. Indeed, rulemaking will likely be proceeded by studies by the affected departments, and any proposed and final rules will likely have to be reviewed by the Office of Management and Budget. Therefore, changes are unlikely to affect plans beginning on January 1 of 2018, although some changes may take effect mid-year.”   9.       The executive order instructs the Department of Labor to expand the availability of association health plans under the Employee Retirement Income Security Act of 1974 (ERISA).   10.   The executive order instructs the Departments of Labor and HHS to pursue expanded Availability of Short-Term, Limited‑Duration Insurance.   11.   The executive order instructs the Departments of Labor, Treasury and HHS to increase the usability of HRAs, to expand employers' ability to offer HRAs to their employees, and to allow HRAs to be used in conjunction with nongroup coverage.   12.   As Timothy Jost notes in another Health Affairs post, small employers already received expanded ability regarding HRAs in 2016, when “Congress adopted in Title XVIII of the [21st Century] Cures Act a new type of arrangement, the Qualified Small Employer HRA (QSEHRA), that is effectively an exception to the HRA prohibition, but only for small employers — employers that have fewer than 50 full-time equivalent employees and therefore are not subject to the large employer mandates. These employers may pay or reimburse employees through a QSEHRA for premiums for health insurance that qualify as minimum essential coverage.” Thus the Executive Order would have more impact on larger employers.