Focus turns to HHS after ObamaCare repeal fails

(This story originally appeared on The Hill Extra.)

Health Secretary Tom Price has some authority to enact regulatory changes to ObamaCare, but experts say his wiggle room is minimal at best. 

Republicans hit a dead end Friday in their high-stakes push to repeal ObamaCare, pulling the bill in the 11th hour after losing more than 30 party members. President Trump told reporters shortly after he was “totally open” to working with Democrats to improve healthcare for all Americans.

{mosads}Speaker Paul Ryan (R-Wis.) told reporters that Price has significant authority to make changes himself, but that his efforts would have been aided by the now-defunct reconciliation bill. Specifically, the legislation would have provided $115 billion to states for high-risk pools and reinsurance mechanisms to subsidize the costs of the very sick.

“That’s not now going to happen and therefore he won’t be able to deploy that policy tool that we think is better than ObamaCare,” Ryan said at a press conference Friday. “So we do lose a lot of the tools we wanted to improve people’s lives and bring down healthcare costs in this country.”

Alaska is awaiting final approval on a so-called 1332 waiver under the law that would essentially extend the Affordable Care Act’s federal reinsurance program, which ended in 2016. The waivers are one area where Price has a little leeway to loosen regulations.

A spokesperson for HHS did not return a request for comment.

In a closed-door meeting with House Republicans last week, Price outlined other areas where the law allows him to loosen regulations over insurers in the marketplace. The areas he mentioned included the law’s 10 essential health benefits (EHBs) and the medical loss ratio, which restricts the amount of premium revenue insurers can spend on administrative expenses.

But those changes won’t do anything to lower premiums, according to The Heritage Foundation’s health policy expert and former Trump transition team aide Ed Haislmaier.

“Is there a lot of stuff that the secretary has discretion over? Absolutely,” he told The Hill Extra. “But the next question is, is there stuff the secretary has discretion over that actually can translate to an effect on premiums? That’s a little different animal.”

The essential health benefit categories are defined by statute, but Haislmaier said that the law gave broader-than-expected authority over the level of coverage defined within the categories. 

States select the benchmark plan that determines specific coverage requirements under the benefit categories. But Price could convert the state requirements to a single national standard that requires less coverage within the categories, according to Jeremy Earl, a partner with McDermott Will & Emery.

Price could also give insurers more room in what qualifies as an acceptable expense under the medical loss ratio, such as money spent to verify if a claim is fraudulent. Right now, those expenses do not qualify. The medical loss ratio requires insurers to spend a certain amount of revenues on medical care versus administrative costs or profits.

The Affordable Care Act (ACA) also gives the HHS secretary broad authority over the exchanges, Earl added. He cited Section 1321 of the law, which gives Price power over the marketplaces and “such other requirements as the Secretary determines appropriate.”

“They still can’t do anything inconsistent with the law or that would conflict with it, so you would still have that constraint,” he said.

The Department of Health and Human Services did a “pretty good job” maximizing its flexibility with the proposed market stabilization rule, due out in April, Haislmaier said. The rule is proposing to tighten special enrollment periods and expand the limits around value on most plans, among other things.

Expect more changes to things like grandfathered plans, which were in place before ObamaCare was passed, Haislmaier said. Price could loosen restrictions, like changing co-pays, that could cause the plans to lose their grandfathered status.

“That’s the kind of thing I would expect to see,” he said. “They didn’t do that right out of the box because that’s going to take time to think through and do.”

But none of these things will fill the coffers of insurance companies that have suffered heavy losses on the exchanges. Earl said the effects will “be on the margins” for health plans.

“Is there some wiggle room? Possibly. But it’s not a huge amount,” Haislmaier said. “You really have to get at the underlying statute.”

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