It’s unlikely Democrats in the Senate would support the House-passed bills—unless perhaps they were included in must-pass spending legislation, a policy expert says.

March 23—As the outlook for the American Health Care Act (AHCA) tottered this week, Congress began advancing follow-up healthcare policy legislation.

The legislation that passed the House of Representatives this week was part of a “three-pronged” strategy to repeal and replace much of the Affordable Care Act (ACA). The highest-profile “prong” is the ACHA, followed by executive actions to change ACA rules. The final step will include several bills aimed at lowering the cost of insurance and improving access to health care.

The House passed two bills from that last bucket, the Competitive Health Insurance Reform Act of 2017 (by a vote of 416 to 7) and the Small Business Health Fairness Act of 2017 (236-175). However, their chances of passing the Senate are unclear.

The AHCA is the farthest-reaching part of the strategy and—if Republicans in the House can agree on a plan—the most likely to make it through Congress because it requires only a majority vote in the Senate, where Republicans have 52 seats. Similarly, the Trump administration has broad powers to change the remaining parts of the ACA, using the authority provided by that law—including 1,442 citations empowering the secretary of the U.S. Department of Health and Human Services (HHS) in various areas, HHS Secretary Tom Price said.

Price already has used that authority to issue a proposed rule changing requirements for ACA marketplace health plans, such as by expanding preenrollment eligibility verification during special enrollment periods (SEPs).

Critics have downplayed the significance of the House-passed third-bucket bills because they would require the support of at least eight Democratic senators to pass that chamber and most view such support as highly unlikely.

“You own whatever it is; the Democrats have no incentive whatsoever to come and help you out,” said Julius Hobson, a senior adviser for Polsinelli and a former lobbyist for the American Medical Association.

However, one policy expert said some could pass the Senate as part of must-pass spending bills.

“If there’s an omnibus bill and enough supporters—enough Republicans and maybe some Democrats who say, ‘We want our constituents to have affordable health insurance’—sure it could happen,” Michael Cannon, director of health policy studies for the libertarian-leaning Cato Institute, said about one such bill.

Must-pass bills this year where other legislation could be added include a new federal government funding bill needed when an existing one expires April 28 and a bill in the summer to raise the federal debt limit, Hobson said.

Hobson said in an interview that tort reform legislation may be added to the AHCA bill in the Senate—which only needs a majority vote to pass—because the Congressional Budget Office has concluded such bills save the federal government money.

Bipartisan support in the Senate could emerge for either the introduced third-bucket legislation or other expected bills on chronic disease care changes or Stark Law reforms, according to another policy expert. “I don’t think you can automatically conclude that there will not be bipartisan support for these different reforms in the Senate,” Blair Childs, senior vice president for Premier, said in an interview.

Follow-up Legislation

The first bill among the third-prong legislation, the Competitive Health Insurance Reform Act, garnered support from some hospital advocates. Tom Nickels, executive vice president for the American Hospital Association (AHA), offered a letter supporting the bill, which would repeal the antitrust exemption for health insurers and allow lawsuits for actions like price fixing, bid rigging, and market allocation.

“The AHA believes that the health insurance industry should be governed by the same antitrust laws and policies that apply in other sectors of our economy, including health care,” Nickels wrote. “Any exemptions should be narrow and carefully tailored to achieve a pro-competitive purpose.”

More controversial was the Small Business Health Fairness Act of 2017, would authorize the creation of nationwide insured and self-insured small-business association health plans (AHPs) and protect them from state insurance regulation.

Among those raising objections to the bill was the American Academy of Actuaries (AAA), which concluded that such AHPs would challenge market stability.

“Although AHPs would be offered in competition with other small group and individual market plans, they could operate under different rules,” representatives of AAA wrote congressional leaders in a March 22 letter. “The consequence of different rules for AHPs versus state-regulated insured plans is a fragmentation of the market resulting from an unlevel playing field.”

Upcoming Bills

The total number of bills in Republicans’ third bucket of healthcare reform is not known, but the White House has provided a wish list of areas to be addressed as part of that phase.

Other legislation expected to advance as part of the third prong includes the Self-Insurance Protection Act.

The legislation amends the Employee Retirement Income Security Act (ERISA), the Public Health Services Act, and the Internal Revenue Code definitions of “health insurance coverage” to exclude stop-loss coverage for self-insured group health plans. Supporters say the bill is intended to forestall federal regulation of stop-loss coverage as health insurance.

Earlier this month, the House passed three bills aimed at curbing medical malpractice lawsuits. The Innocent Party Protection Act (passed by a vote of 224 to 194) would shift some claims to the federal system from state courts; the Fairness in Class Action Litigation Act (220-201) would limit class-action lawsuits in federal court unless every person in the class had “an injury of the same type and scope”; and the Lawsuit Abuse Reduction Act (230-188) would require federal judges to sanction attorneys who file frivolous claims.

The House was expected to vote soon on the Protecting Access to Care Act, which would limit noneconomic damages, such as pain and suffering, to $250,000. The Protecting Access to Care Act also drew the support of the AHA, which noted that high medical liability costs divert funding from patient care and that defensive medicine costs the healthcare industry an estimated $50 billion to $100 billion annually.

“The increased costs that result from the current medical liability system not only hinder access to affordable health care, they also threaten the stability of the hospital field, which employed over 5.7 million people in 2015, and continues to be one of the largest sources of private-sector jobs,” Nickels wrote in a letter backing the bill.

Interstate Sale

Another bill expected to be introduced and to start moving through committees this month would allow the interstate sale of individual health insurance with the goal of boosting insurer competition and lowering costs.

Critics of interstate insurance sales note that the ACA already allowed a form of that—interstate compacts—and it was not utilized. However, supporters of the approach said if it was paired with elimination of the ACA’s required benefits, it would be more attractive to insurers because they could offer plans that truly differed.

“What letting people purchase insurance licensed by other states does is it allows them to pick the consumer protections that they value and void the ones that they don’t,” Cannon said.

Another criticism of such cross-state sales is that the result could be a race to the bottom by insurers who find states willing to drop costly mandated benefits and then sell those plans in other states. That would leave residents without effective coverage.

“In 16 counties in eastern Tennessee, Obamacare’s consumer protections are leaving 43,000 people without coverage; how is that a consumer protection?” Cannon said in an interview, referring to the region’s expected lack of an ACA marketplace insurer in 2018.

He also noted competition is gone in the one-third of U.S. counties, with only one insurer operating in the ACA marketplace.

Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Thursday, March 23, 2017