Recipients of cost-sharing reductions seek to intervene in House v. Burwell

Two recipients of cost-sharing reductions under section 1402 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), concerned that the House Republicans might alter their position after the inauguration of President-elect Donald Trump (R), sought permission to intervene in the pending appeal in House of Representatives v. Burwell.

House v. Burwell

The Department of Treasury has been reimbursing insurers for their payment of reductions under section 1402 from the permanent appropriation in the Internal Revenue Code (31 U.S.C. §1324). The U.S. House of Representatives filed suit against the Secretaries of HHS and the Treasury claiming that the payments are not authorized by section 1324. The district court entered an injunction barring the payments (see Court sides with House Republicans, finds no appropriation for cost-sharing reductions, Health Law Daily, May 18, 2016) and the Secretaries appealed. On December 5, 2016, the D.C. Circuit granted the House’s motion to hold the appeal in abeyance until February 21, 2017 (see Court puts cost-sharing appeal on hold, awaits possible Trump policy, Health Law Daily, December 7, 2016).

Possible about-face

According to the movants, their interests were aligned with those of the Executive Branch, which advocated for a construction of section 1324 that permits the continued payment of cost-sharing reductions to insurers. However, statements in the House’s motion suggest that it could change position after Trump’s inauguration and enter into an agreement to dismiss the appeal or otherwise agree that the injunction should take effect—for example, that the House and the incoming Administration are “discussing possible options for resolution” of the appeal other than to “continue prosecuting” it. To defend their interest in continued payment of the cost-sharing reimbursement, the recipients asked to intervene in the case.

Potential for harm

The motion noted that if cost-sharing reimbursement payments stop, recipients of cost-sharing reductions who purchased insurance policies for 2017 will likely face early termination of those policies because the government will allow insurers to leave the exchanges. Even if the insurer remained in the market until the end of 2017 without government reimbursement for cost-sharing reductions, it would “surely exit the marketplace at the end of the plan year in order to shed any obligation to provide cost-sharing reductions.” All of this, say the movants, would drastically increase their costs for insurance.

Personal health care spending from 1996 to 2013 analyzed

Despite the increase in health care spending in the United States, not enough is known about how private and public spending varies according to condition, age and sex group, and type of care. An investigative study of government budgets, insurance claims, U.S. government records, and facility and household surveys, published by JAMA, concluded that from 1996 to 2013 there was $30.1 trillion in personal health care spending for 155 separate conditions, with spending on diabetes, ischemic heart disease, and low back and neck pain accounting for the highest amounts of spending.

Conditions and type of care. The 155 conditions examined included cancer, which was broken down into 29 separate conditions. For the top three spending conditions, the study made the following findings for 2013:

  • Diabetes had the highest health care spending in 2013, with an estimated $101.4 billion in spending, including 57.6 percent spent on pharmaceuticals and 23.5 percent spent on ambulatory care.
  • Ischemic heart disease had the second-highest amount of health care spending in 2013, with estimated spending of $88.1 billion.
  • Low back and neck pain had the third-highest amount of health care spending in 2013, with estimated health care spending of $87.6 billion.

The study’s analysis of spending from 1996 through 2013 found that personal health care spending increased for 143 of the 155 conditions. Additional study findings regarding spending increases from 1996 through 2013 include:

  • Low back and neck pain spending increased by an estimated $57.2.
  • Diabetes spending increased by an estimated $64.4 billion.
  • Emergency care spending increased 6.4 percent.
  • Retail pharmaceutical spending increased 5.6 percent.
  • Inpatient care spending increased 2.8 percent.
  • Nursing facility spending increased 2.5 percent.

Age and spending. The study found that spending among working-age adults, totaling an estimated $1 trillion in 2013, was attributed to many conditions and types of care. Among persons 65 years or older, an estimated $796.5 billion was spent in 2013, with 21.7 percent occurring in nursing facilities. The smallest amount of health care spending was found to be for persons under age 20 years, with an estimated at $233.5 billion spent, or only 11.1 percent of total personal health care spending in 2013.

Age, sex and spending. The study found that the greatest spending was for individuals between 50 and 74 years, with spending highest for women 85 years and older. Because life expectancy for men is lower, the study found less spending by men in the 85 years and older age group.

Estimated spending differed the most between the sexes from age 10 to 14 years, according to the study, when males have health care spending associated with attention-deficit/hyperactivity disorder, and at age 20 to 44 years, when women have spending associated with pregnancy and postpartum care, family planning, and maternal conditions. Together the study estimated that these conditions constituted 25.6 percent of all health care spending for women from age 20 through 44 years in 2013. Without this spending, the study concluded that females spent 24.6 percent more overall than males in 2013.

Conclusion. The study concludes that this information is important because it may have implications for efforts to control U.S. health care spending.

HHS finalizes regulations prohibiting state discrimination against abortion providers

Recipients of Title X Grants for Family Planning Services making subawards cannot restrict participating entities for any reason other than the entity’s ability to provide Title X services, under a new Final rule that will publish on December 19, 2016. The regulatory change was motivated by recent state-imposed restrictions and prohibitions against entities that provide abortions from receiving Title X funds. By statute, Title X funds cannot be used by programs that allow abortion as a method of family planning (42 U.S.C. §300a-6); such programs also cannot be required to perform or assist in the performance of an abortion, nor discriminate against an employee who performs or assists or refuses to perform or assist in the performance of an abortion (42 U.S.C. §300a-7). The regulations will be effective on January 18, 2017, two days before the inauguration of President-elect Donald Trump (R).

Title X

Title X of the Public Health Service Act (42 U.S.C. §§300–300a-8) created the Family Planning Program, which provides funding to nearly 4,000 community-based clinics that provide high quality, affordable, and cost-effective family planning and related preventive health services for women and men, with priority given to low-income patients. In 2015, more than 4 million individuals received services from Title X Family Planning Clinics.

Recipient restrictions

Section 2303 of 2010’s Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) expanded family planning services for certain Medicaid beneficiaries. Soon thereafter, however, family planning organizations began facing funding challenges. According to the Final rule, 13 states have taken action since 2011 to restrict funding to abortion providers, and entities which do not provide abortion services but are affiliated with organizations—such as Planned Parenthood—which provide abortions at some facilities. These restrictions have affected family planning clinics both as subrecipients of Title X grants and as Medicaid providers, leading to decreased access to providers and limitations in the geographic distribution of services.

These restrictions led to litigation (see, e.g., (see Court grants preliminary injunction reinstating Planned Parenthood’s provider agreement with Alabama, Health Law Daily, October 29, 2015; Medicaid termination denied because Planned Parenthood is qualified, Health Law Daily, November 4, 2015; Patients’ provider choice rights violated by exclusion without cause, Health Law Daily, April 19, 2016), and HHS action telling states to end such restrictions (see States warned not to exclude qualified providers, especially family planning, Health Law Daily, April 20, 2016; No limits on choice of provider, contraceptive method for Medicaid enrollees, Health Law Daily, June 16, 2016). HHS also began granting Title X funding directly to providers as sole source replacement grants following the imposition of state restrictions (see Direct award Title X grant documentation properly withheld by HHS, Health Law Daily, February 5, 2015).

Regulatory changes

Earlier this year, HHS’ Office of Population Affairs published a Notice of proposed rulemaking in the Federal Register, declaring its intent to amend current Title X regulations to preclude project recipients from using criteria in their selection of subrecipients that are unrelated to the ability to deliver services to program beneficiaries in an effective manner (81 FR 61639, September 7, 2016). Approximately 91 percent of the 145,000 comments the agency received on the proposed regulations were in favor of the amendment.

In response to negative comments, the Final rule explained that there is no evidence that certain Title X funding recipients—Planned Parenthood, specifically—have engaged in Medicaid fraud, and pointed to research finding that every grant dollar spent on family planning saves an average of $7.09 in Medicaid-related expenditures. The Final rule similarly responded to commenters concerned that Title X service providers would use Title X funding to fund abortion by reiterating the statutory and regulatory requirements that prevent Title X funds from being used for abortions, and said that family planning services help prevent abortions by preventing unintended pregnancies.

Will the change last?

The Final rule was promulgated in accordance with notice-and-comment requirements under the federal Administrative Procedure Act, and its changes were announced months ago, which may prevent it from being considered a “Midnight Rule.” According to the New York Times, repealing these regulations would require either a new comment-and-notice rulemaking process, or a joint resolution of disapproval by the House and Senate, with concurrence by the new president. Both supporters and opponents of family planning services are preparing to fight for or against the regulations, while President-elect Trump, who has promised to repeal many of the Obama Administration’s regulatory actions, offered contradictory messages on Planned Parenthood and abortion during his presidential campaign.

Federal and beneficiary spending on Medicare will skyrocket if ACA repealed

Repeal of the Affordable Care Act, as promised by the incoming Congressional leadership and President-elect Donald Trump’s (R) Administration, would not only increase Medicare spending but also lead to higher beneficiary costs, a less-solvent Part A trust fund, and the return of the Part D drug benefit “doughnut hole.” The Kaiser Family Foundation (KFF) published an issue brief on the Medicare implications of repeal of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), finding that the Medicare provisions of the ACA have strengthened Medicare’s financial status for the future, and repeal would weaken the program.

KFF noted that the Congressional Budget Office (CBO) estimated an increase in Medicare spending of $802 billion from 2016 to 2025 if the ACA were repealed in full (see Repealing the Affordable Care Act—an unaffordable idea?, Health Reform WK-EDGE, June 24, 2015). This increase would primarily be attributed to higher payments to health care providers and Medicare Advantage (MA) plans, which the ACA reduced based on the expectation that due to coverage increases, hospitals would have fewer uninsured patients.

Repeal of the ACA would increase Medicare Parts A and B spending by $350 billion over 10 years. It would also increase Part A deductibles and copayments and Part B premiums and deductibles. Similarly, the ACA removed a payment per enrollee discrepancy that paid MA plans 14 percent more than traditional Medicare; in 2016, MA plans only received 2 percent higher payments than traditional plans. A repeal would increase MA spending; however, it would also potentially reduce MA enrollees’ costs or allow them to receive additional benefits.

Under the ACA, certain Medicare benefits are available with no cost-sharing, including a yearly exam and some preventive screenings. The ACA also closed the coverage gap, or doughnut hole, in the Part D drug benefit. Without these changes, beneficiary costs would increase for preventive services and drugs.

The ACA played a role in extending the solvency of the Medicare Trust Fund by establishing new dedicated sources of revenue. As a result, four years’ time was added to the Medicare trustees’ projection of asset depletion in 2014 (see Life expectancy of Medicare trust funds extended to 2030, July 30, 2014). A repeal of these revenue provisions would give the Trust Fund a shorter lifespan.

The analysis also considered repeal of the ACA’s provisions for the following:

  • Freezing income thresholds for the Part B income-related premium;
  • Creating a formal method to expand payment and delivery system reforms through the Center for Medicare and Medicaid Innovation (CMMI);
  • Reducing preventable hospital readmissions and hospital-acquired conditions; and
  • Establishing new accountable care organization (ACO) programs.

Overall, KFF determined that ACA repeal without corresponding replacement legislation would weaken Medicare’s financial status for the future while costing beneficiaries and the federal government more.