Bipartisan funding bill contains numerous health provisions, even more CHIP

After a brief government shutdown, the Bipartisan Budget Act (BBA) was signed into law Friday, February 9. BBA contains numerous health policy provisions that will likely have long-term implications for states, providers, and patients.

Notably, the BBA added an additional four years to the Children’s Health Insurance Program’s statutory authorization. CHIP had been reauthorized for six years in January’s budget standoff, and the BBA extension ensures the program will run through September 30, 2027. This extension actually saves the federal government money because of an interaction with the repeal of the Affordable Care Act’s (ACA) individual mandate in last year’s tax package.

The BBA also includes $6 billion over two years to address the opioid epidemic. However, there may be procedural questions as to how that funding will be allocated between health and law enforcement programs, and critics argue this amount—while helpful—will not be enough.

The BBA also provides support for two programs created in the ACA. First, it includes an additional two years of support for a special fund for community health centers that supplements regular appropriations for these safety-net providers. The BBA also extends the Maternal, Infant, and Early Childhood Home Visiting Program through September 30, 2022. The extension requires participating states to conduct a statewide needs assessment and allows them to establish an incentive program for successful outcomes. At the same time, the BBA reduces the ACA’s Prevention Fund, which has become a common offset for other funding priorities.

Given that the BBA extends many expiring Medicare provisions and deals with many other issues such as the debt limit, several political pundits believe Congress has “cleared the deck” of major health policy debates for the remainder of the year.

Labor Department calls for comments on “association health plans,” which some fear will destabilize state insurance markets

Last year, President Trump issued an executive order directing federal agencies to develop “a healthcare system that provides high-quality care at affordable prices for the American people.” Recently, the U.S. Labor Department began implementing one of the stated goals of this executive order by issuing a proposed rule on “association health plans” (AHPs).

On January 5, the Labor Department asked for comments on this proposal, which would allow business associations to sell to small business an insurance plan similar to what many large companies offer to their employees under the federal Employee Retirement Income Security Act (ERISA). Health insurance plans that comply with ERISA are exempt from state law and are regulated by the Labor Department, but to create such a plan is cumbersome even for some large businesses. Proponents say that small businesses would be able to obtain the economies of scale and flexibility that large companies enjoy under ERISA, but opponents argue that AHPs would destabilize state insurance markets and put consumers at risk.

The proposed regulation turns on how to interpret ERISA’s interpretation of “employer.” Currently, business associations like local Chambers of Commerce may offer health insurance to their members, but these insurance policies are regulated by state insurance commissioners. Under Labor’s proposal, the definition of an “employer” would be broadened so that small businesses in the same industry or same geographic region could band together and create an association that could offer a plan similar to a large company might under ERISA. (For a more in-depth overview, click here.)

Many business groups have supports AHPs as a way to achieve equity between large and small businesses. For example, the National Restaurant Association noted that allowing AHPs would be “a key step in leveraging the buying power of small businesses.” The Society for Human Resource Management added that AHPs “could provide an option for small employers to offer competitive and affordable health benefits to their employees, thereby increasing the number of Americans who receive coverage through their employer,” but likely would have little effect on most midsize-to-large employers.” On the other hand, consumer groups, state officials, and Blue Cross plans argue that AHPs would weaken existing state and federal protections, destabilize the individual and small group markets, and prevent state insurance regulators from policing bad actors. Opponents point to problems with a similar policy, multiple employer welfare arrangements (MEWAs), which ultimately led to Congress to pass a law clarifying that states could regulate MEWAs. Additionally, groups like the National Governors Association and the National Association of Insurance Commissioners have opposed legislative attempts to create AHPs for similar reasons.

Comments on the proposal are due to the Labor Department by March 6.