FY17 Appropriations

The federal government is currently operating under a Continuing Resolution (CR) until April 28.  Congress is currently on recess until next week, and will have only a few legislative days to complete final FY17 funding when they return.

Congressional leaders’ efforts to find a compromise on the spending deal have been impacted this week by last-minute demands by the Trump Administration.  White House officials have taken a hard line on inclusion of border wall funding and a crackdown on sanctuary cities in a final FY17 package.  Congressional Democrats have demanded that a final FY17 package include payments for cost-sharing subsidies included in the Affordable Care Act.  These demands were made after President Trump made comments that he would consider not continuing these payments to force further negotiations on the future of the ACA; not continuing these payments would have a dramatic and negative effect on the stability of the health insurance market.  All of these issues have complicated the negotiations and strained an emerging deal from Congress that would avoid a government shut down.

Legislative text detailing the funding agreement had been expected to be released this week but is now not expected until next week– if at all.  To avoid a shutdown, Congress will likely pass a one-week extension of current funding to give negotiators more time to strike a deal.  If no deal can be reached, it is likely that Congress would pass a full year CR, maintaining funding at its current levels.

As a reminder, the Senate has proposed a five million cut to the Division of STD Prevention and the House of Representatives has flat-funded the program.  A full-year CR would mean that this proposed five million cut would not be enacted.

ACA Regulations

As insurers prepare to submit their applications to offer Qualified Health Plans (QHPs) on the 2018 Marketplaces, the Department of Health and Human Services (HHS) is issuing new regulations and sub-regulatory guidance that will have significant impact. On April 13, 2017, HHS finalized their first major Marketplace regulation, the Market Stabilization Final Rule (Final Rule). The Final Rule was intended to make changes to the Marketplaces that would attract insurers for the 2018 Plan Year.  They also issued two guidance documents, including Guidance to the States on Health Plan Certification Standards in Federally-facilitated Marketplaces for Plan Years 2018 and Later. A common theme demonstrated in these documents is that HHS “is committed to returning to the states their traditional authority to regulate health plans.” It is clear that HHS intends to delegate oversight of key QHP requirements, such as provider network adequacy, to the states.

Some states have historically been proactive about regulating their health plans and may have the infrastructure to do so. Other states, however, have traditionally had much less oversight, and may fail to adequately regulate their QHPs. As a result, patients in these states may face discriminatory plan designs and other obstacles to accessing the care they need. There has been little to suggest that HHS has evaluated state capacity or desire for additional oversight responsibilities or willingness to provide support to build such capacity. It is likely that in some states, the Final Rule will result in less robust coverage and potentially discriminatory practices.