Inside Republicans’ new health bill
House Republican leaders plan to take a vote next week on conservative-friendly health policies they’ve pursued for years. It’s the latest GOP counter to Democrats’ push to extend expiring Obamacare subsidies.
Here is what’s in the bill, the text of which was released Friday.
CHOICE accounts
Oklahoma GOP Rep. Kevin Hern’s CHOICE legislation would allow employers to offer workers tax-advantaged funds to pay for individual health insurance, in lieu of offering a traditional group plan. It would also offer tax incentives for employers who adopt the arrangements.
Both Republicans and Democrats like the concept because it promotes individual choice in health coverage while also encouraging Obamacare sign-ups.
Funding cost-sharing reductions
When Obamacare was first implemented in 2014, the federal government paid insurers directly to offset cost-sharing reductions, or discounts on deductibles that insurers must offer to people making between 100 and 250 percent of the federal poverty level.
In response to a lawsuit filed by congressional Republicans, a federal judge in 2016 ruled the government’s payments were illegal because the funding wasn’t explicitly appropriated by Congress. The Obama administration appealed, but the first Trump administration dropped the case and stopped the payments.
Insurers are still required to offer the cost-sharing reductions, they just no longer get reimbursed by the federal government.
To make up for the loss of federal dollars, insurers substantially increased silver premiums, a process known as “silver loading.” That’s driven up the amount of federal premium subsidies the government pays insurers, because the subsidy amounts are tied to the second-lowest-cost silver plan in the marketplace.
Republicans now want to put an end to that practice and start funding the cost-sharing reductions again, which is expected to lower premiums for silver plans, thus lowering the amount Obamacare enrollees receive in premium subsidies, regardless of what type of plan they’re enrolled in.
Association health plans
Association health plans enable several small businesses to band together to get health insurance. The framework includes a bill from Education and Workforce Chair Tim Walberg (R-Mich.) that would permit self-employed people to buy an association health plan.
Democrats oppose the idea. In addition to not guaranteeing essential benefits, the plans can distort the insurance market by drawing away healthy, young people, according to a statement from Virginia Rep. Bobby Scott, the top Democrat on the Education and Workforce Committee.
Stop-loss policy
The Self-Insurance Protection Act from Rep. Bob Onder (R-Mo.) would expand access for employers to “stop-loss” policies that enable them to protect against catastrophic health costs from just a few employees.
The bill would ensure that such policies are not classified as traditional health insurance by the federal government. But it has generated pushback from Democrats because it can also restrict states from regulating them.
Pharmacy benefit managers
The bill aims to overhaul how pharmacy benefit managers operate. Those are companies that negotiate drug prices on behalf of insurers and large employers. Pharmaceutical companies and lawmakers have long blamed them for high drug prices.
A push to change the rules governing the PBMs fell apart last year after Trump adviser Elon Musk tanked year-end legislation, but there continues to be overwhelming bipartisan interest in advancing changes that shed light on the PBMs’ business practices.
