Last week, I took a well-deserved vacation. As I perched on the balcony of a nice condo on a balmy October day, enjoying an amazing view of the Gulf of Mexico and people below swimming, sunning and playing, my phone started going crazy. I mean crazy.
Along came the Twitter alerts.
For those of you who are wonky enough to follow me on Twitter (@mikebertaut), you know there are only two real topics in my group of around 400 followers: football and healthcare reform.
It was the healthcare reform group sounding off on this warm Monday (are you sure it’s October?).
BEEP! BEEP! BEEP! BEEP! The tweets were pouring in. It started Monday and didn’t really stop until, well, it’s still rocking today. What activated all this hullabaloo?
On Oct. 12, President Trump issued an Executive Order to three federal agencies—Internal Revenue Service (IRS), Department of Labor (DOL) and Center for Medicaid & Medicare Services (CMS)—to do some stuff.
Before we talk specifically about what he told them to do, let’s talk about this regulatory process a bit.
Room for Interpretation
Now that the President has issued this Executive Order, the agencies are directed to start writing proposed rules to bring about the intentions expressed in the executive order (see below). Just like when you tell your kids to do something, there is ALWAYS room for interpretation. This regulatory and rulemaking process will determine how much these rules end up looking like how the president thinks they should.
Proposed rules are published and then put out for comment. Any concerned party in the United States has the right to send in comments on these rules, and the agency is supposed to read them all, pluck out the really relevant comments and use them to justify how its policy staff wrote the rules.
Sometime later, the agencies will close this comment period and create an Interim Final Rule (IFR). This IFR will also allow a short time for comments. Once this comment period closes, the rules will move from IFR to Final Rules and be published on a massive website called the Federal Register.
Once the rules are published there, they are the law of the land. Any legal challenges to these rules could start immediately once final rules are published. It’s unclear yet whether or not the three agencies will collaborate on the requests and come out with essentially the same rule three times, or go their own way. Typically, government agencies try to speak with one voice to avoid a lot of confusion.
I would guess the process in this case will take anywhere from three to six months. We certainly won’t have these final rules in place in time for the upcoming Open Enrollment (Nov. 1-Dec. 15, 2017).
So Mike, what’s all the hoopla about?
The Executive Order instructs the agencies to consider changing the current rules in three specific areas:
- Association Health Plans—to create some sort of legal protection for companies with no real affiliation to band together across state lines and create a type of pseudo-entity to buy health insurance as a group. The assumption is that this bigger group will be cohesive enough to create a stable, single health plan for a larger pool of people.
- Short-Term, Limited Duration Health Plans—to extend from 90 days to 364 days the time limit a person can keep certain types of “health insurance” (I use the term loosely). The ACA allowed the sale of health plans that could be renewed in 90-day increments for employees waiting to become eligible for employer health plans, or for people in the country for a short period of time. There are almost no rules on the books about what these plans have to cover. Plans like this didn’t count as Minimum Essential Coverage toward satisfying your Affordable Care Act Individual Mandate obligation on your taxes. But, look for this definition to expand, a lot.
- Health Reimbursement Arrangements and Individual Coverage—the IRS recently closed a loophole in the tax law that allowed certain arrangements for people to buy individual health insurance and get a break on their taxes. This order seems to want to reverse that decision and create a path whereby individuals could use pre-tax money to pay their premiums on their health insurance, even outside of a company group plan, which is not possible today.
Each of these proposals has its own strengths and weaknesses. Some are more workable than others. Some have been tried in the past and failed miserably and spectacularly. But you can rest assured we’ll examine each of these proposed changes in detail in upcoming blog posts well before any final rules come out, you’ll already have the Straight Talk on each of them!
Exciting times in healthcare, as usual.