Big Health Insurers Exceed Wall Expectations

Image result for exceed wall st photos


All six of the major health insurers topped Wall Street expectations in the second quarter as the industry distanced itself from turmoil in Washington.

Cigna Corp. was the final insurer in the Standard & Poor’s 500 Index to report on Friday. Its earnings came in higher than analysts anticipated and the company raisedits profit outlook for the year.

For-profit health plans, among them UnitedHealth Group Inc., Aetna Inc. and Humana Inc., are benefiting from their decisions to largely retreat from the Affordable Care Act’s markets after posting losses. Their stocks have soared this year, even while the fate of the health law was in jeopardy in Washington. Although Republicans’ latest effort to repeal Obamacare failed in the Senate last month, President Donald Trump has threatened to let the health law collapse, and its future remains uncertain.

Centene Corp., the smallest of the S&P 500 health plans, is also the best performing of the six this year with a 47 percent jump as of Thursday’s close. Anthem Inc. is second with a 33 percent gain, followed by Cigna, up 32 percent. Meanwhile the S&P 500 rose 10 percent.

Four of the insurers, including Cigna, are also demonstrating that they can thrive on their own after two megamergers collapsed this year after being opposed by antitrust regulators and blocked by judges — a tie-up between Anthem and Cigna, and an Aetna-Humana deal.

Cigna raised its 2017 earnings forecast to $9.75 to $10.05 a share, excluding some items, up from a June range of $9.35 to $9.85. Analysts anticipated $9.77. Earnings were $2.91 a share on that basis, topping the $2.48 average estimate.

Cigna has been a relatively small player in Obamacare from the start. The company focuses on selling coverage to employers, a business that’s been far less affected by the health law and the legislative debate. The insurer is pursuing growth in the private Medicare Advantage program for U.S. seniors, as well as in overseas benefits offerings.

Following the collapse of the $48 billion acquisition by Anthem, Cigna Chief Executive Officer David Cordani laid out his strategy to investors in late June. He said he’s targeting per-share earnings of $16 a share by 2021. Deals could help accelerate the expansion, the CEO told investors, adding he’s not counting on them.

U.S. Appeals Court Says Medi-Cal Cut to Hospitals Was Illegal

Dr. Leonid Basovich, left, examines Medi-Cal patient Michael Epps, at the Wel...

Source: Los Angeles Times

A U.S. appeals court decided Monday that the federal government wrongly approved California’s request to temporarily cut Medi-Cal reimbursement by 10% during the recession for hospital outpatient care.

The ruling by a three-judge panel of the U.S. 9th Circuit Court of Appeals said the federal government can approve such cuts only if evidence shows that the recipients of aid will have access to the same services as the general population.

California, struggling with a budget crisis, imposed the cutback for eight months, from July 2008 through February 2009.

If the ruling stands, the state and the federal government will have to pay back California hospitals hundreds of millions of dollars, said Robert Leventhal, who represented more than 50 California hospitals in the challenge.

Before cuts can be made, federal law requires a showing of evidence that beneficiaries will have access to care “at least to the extent that such care and services are available to the general population in the geographic area,’’ the 9th Circuit said, citing a provision in federal law.

Leventhal said previous challenges to the Medi-Cal cuts relied on different legal theories.

Monday’s ruling “will have a major impact on Medi-Cal rates and hopefully bring them up,” he said.

“They are the lowest or next to the lowest in all 50 states for hospital outpatient services,” Leventhal said.

He also said the ruling could be used in future challenges involving Medi-Cal.

It is “impossible” for the government to show that rate cuts would leave recipients with the same access to care as the general public, Leventhal argued.

“It’s clear that the rates aren’t structured to provide the same access to care,” he said.

Jeffrey Eric Sandberg, who argued the case for the U.S. Dept. of Justice, referred questions to the department’s public information office.

A department spokesperson did not immediately respond to a request for comment.

The government could ask the panel to reconsider the decision, request a larger 9th Circuit panel to weigh in or appeal to the U.S. Supreme Court.

Employer-Based Health Coverage Likely to Stay

Image result for Employer Health Insurance photosSource: The Washington Post

Get your insurance through your employer? The ongoing political turmoil around “Obamacare” all but guarantees you’ll still be able to do that.

Ask Walt Rowen, whose business is etching glass but whose experience managing century-old, family-owned Susquehanna Glass makes him something of an expert on health care. He’s provided coverage to employees, then canceled it, steering them to the health insurance exchange. But with those premiums rising, Rowen this year is again covering his 70 or so workers under the umbrella of employer-sponsored health insurance.

Employer-provided health insurance is so ingrained in the American workplace that people expect it to continue even as politicians thrash out the role of government in health care. That’s according to polling, business owners and consumers. And in a nearly saturated labor market, employers don’t want to give workers a reason to work somewhere else.

“I think a company — any size company — would be incredibly afraid to just cancel its insurance policy and say the hell with it,” says Rowen, whose company is located in Columbia, Pennsylvania. He said that could result in employees fleeing, especially in states where the Affordable Care Act insurance markets are weak.

With the GOP crusade to repeal and replace “Obamacare” failing, the federal mandates that people have insurance and that employers with more than 50 workers provide it seem likely to stay in place in the foreseeable future. The Trump administration on Tuesday pledged to keep working with Congress on a rewrite. “Obamacare’s mandates saddled many with health care costs they simply couldn’t afford,” said White House spokeswoman Sarah Huckabee Sanders.

For now, the Trump administration is considering whether or not to continue paying the law’s cost-sharing subsidies, which have helped lower premiums. Without those subsidies, it’s estimated that premiums will rise and insurers will leave markets.

The ACA requires companies with 50 or more full-time employees to provide insurance to employees and their dependents. The Kaiser Family Foundation says nearly 96 percent of companies of that size already were offering coverage before the law took effect in 2014. Nearly 35 percent of companies with fewer than 50 workers also were offering insurance.

Removing the employer mandate wouldn’t sit well with a wide swath of the American public.

A poll by The Associated Press-NORC Center for Public Affairs Research says 61 percent oppose revoking the requirement, including 58 percent of Republicans.

Workers have been getting their health insurance through their employers for decades, since the U.S. government exempted employer-paid health benefits from wage controls and income tax during World War II.

Nearly 90 percent of workers are in companies that provide health benefits, according to the Kaiser Family Foundation/HRET annual survey in 2016. Taking into account dependents, roughly half of Americans are covered by employer-based insurance.

Large companies “need to attract and retain employees and they’d be at a competitive disadvantage if they stopped offering health benefits,” said William Kramer, executive director for national health policy for the Pacific Business Group on Health.

As a result, human resource consultants say it’s likely that businesses will remain committed to offering coverage. Some experts question whether the ACA’s employer mandate makes much, if any, difference when there’s a solid business case for providing health care: With unemployment low and the labor market tight, benefits give employers an advantage in recruiting and retaining the best workers.

“What kind of message are you giving to employees if you say, ‘I’m going to take this away?’ Are you really willing to risk losing people?” asks David Lewis, CEO of OperationsInc, based in Norwalk, Connecticut.

Even if the employer mandate had been repealed, the Congressional Budget Office estimated that larger companies would have been hard-pressed to cancel their health benefits, although some smaller firms would have done so.

“As soon as you take it back, you cause massive employee dissatisfaction,” said Jay Starkman, CEO of Engage PEO, a human resources provider whose clients include many small and mid-sized businesses.

Rowen, the glass business owner, says his health insurance decisions had less to do with the employer mandate than with cost and employee retention.

In the four years before the ACA took effect, Susquehanna Glass had fewer than 50 employees and saw its premiums rise between 15 percent and 20 percent a year. “We were fiddling all the time trying to keep our health care costs for our employees as affordable as possible,” Rowen recalls.

He hired an expert to help his employees find insurance on the exchange in Pennsylvania. Lower-paid employees qualified for subsidies, while higher-paid workers could afford plans or went on their spouses’ plans, he said. In some cases, Rowen gave bonuses or raises to help workers afford insurance.

He says he owed a penalty of about $40,000 for not providing insurance — less than the six figures he thinks he would have paid to provide group insurance.

But by 2016, he said, his workers were complaining that their premiums were increasing. Susquehanna Glass by that time had grown to about 70 employees — enough to qualify for less-expensive group plans joined by medium-sized businesses. Many of his new employees were younger and less expensive to insure. He found that purchasing group health insurance would cost just over $100,000 — not as much as he’d feared.

“If they were not able to get an affordable one with me and they found another company that does offer one,” he says, “They might be forced to make the decision to leave me.”

Why A Pennsylvania Insurer’s Collapse Could Whack Californians In the Wallet

Image result for Penn Treaty American Corp photosSource: California Healthline

Among all the reasons for rising health insurance premiums, this one might be the most obscure: A long-term care insurer in Pennsylvania just went belly-up.

Health insurers across the country are on the hook for hundreds of millions of dollars in losses stemming from the recent insolvency of Penn Treaty American Corp., of Allentown, Pa., and its two subsidiaries.

Insurance company failures are rare, but when they happen, other companies are responsible to help pay off the company’s claims and protect policyholders through groups known as state guarantee associations. Those industry assessments are typically based on market share, so larger insurers pay more.

In these situations, long-term care coverage is treated as health insurance so health insurers are liable for the payments — and some are disputing that.

Penn Treaty’s liquidation poses a “potential shock to the health marketplace” as the losses pile up, according to the A.M. Best credit rating firm. Industry analysts estimate the parent company has long-term claims liabilities approaching $4 billion, but only about $700 million in assets.

This is one of the largest insurance failures in U.S. history, and “the impact of this situation on the insurance industry is huge,” said Joseph Belth, a professor emeritus of insurance at Indiana University. “Companies will try to pass it on in some fashion to policyholders.”

California may be hardest hit. Its guarantee association faces a liability of $400.6 million, according to estimates prepared by Long Term Care Group for the National Organization of Life & Health Insurance Guaranty Associations. Florida is next at $360.4 million, followed by Pennsylvania at $269.9 million, Virginia at $197 million and New Jersey, with projected liabilities of $144.6 million.

Health insurers can pass along those unforeseen costs by imposing premium surcharges on customers, or they can shift the burden to taxpayers by paying less in state premium taxes. The rules vary by state. In California, insurers can levy a surcharge on policyholders.

Insurers have recently begun revealing their initial cost estimates, often buried deep in company securities filings and financial statements.

Anthem Inc., the nation’s second-largest health insurer, estimates it will pay $253.8 million to cover its portion of Penn Treaty claims. In a securities filing last month, Anthem said, “payment of the assessments will be largely recovered through premium billing surcharges and premium tax credits over future years.”

Aetna, the industry’s third-largest insurer, expects to pay $231 million. And San Francisco-based insurer Blue Shield of California has booked a loss of nearly $41 million. Those numbers may rise as Penn Treaty’s policyholders collect on their benefits.

Most state guarantee associations will provide up to $300,000 in benefits for each Penn Treaty policyholder who files a claim, but the limits vary by state. In California, for instance, the coverage extends to about $560,000. Penn Treaty’s insurance units have about 73,000 policyholders nationwide.

The expenses related to Penn Treaty may be small compared to the underlying medical costs that continue to drive up Americans’ health insurance premiums. Still, some insurers may impose surcharges of up to 2 percent annually over several years to cover Penn Treaty assessments — one more unwelcome charge tacked onto the country’s growing health tab.

The demise of Penn Treaty is yet another black eye for the long-term care industry. For years, long-term care insurers have been hit by higher-than-expected claims, low investment returns and poor pricing. As a result, many companies left the business or began sharply raising premiums for existing customers.

In California, more than 130,000 people who bought long-term care policies from the state workers’ retirement system received 85 percent rate hikes in recent years. A consumer lawsuit against the California Public Employees’ Retirement System over the legality of those rate increases won class-action status last year.

The state agency has defended the rate hikes as necessary and proper.

Penn Treaty’s financial troubles date to 2009. Years of legal wrangling culminated in a Pennsylvania judge’s ruling in March that the company was insolvent. She ordered the insurance commissioner there to liquidate the firm.

“After a long and difficult eight-year legal process, the court’s decision to approve the liquidation recognizes the companies’ financial difficulties are too great to be remedied,” Pennsylvania Insurance Commissioner Teresa Miller said following the judge’s ruling.

Some health insurers, such as UnitedHealth and Aetna, have challenged the assessment process, arguing that long-term care is more like life insurance. Looking beyond Penn Treaty, Belth said, health insurers are concerned about other long-term care companies going under and saddling them with even more losses.

“Virtually all of the health insurance companies, especially the big ones, have never sold long-term care insurance,” Belth said, “so they are not appreciative of being assessed.”

McConnell to Consider Bipartisan Plan to Pay Health Insurers

Senate Lawmakers Address the Media After Their Weekly Policy Luncheons

Source: Associated Press

A week after an attempt to repeal the Affordable Care Act failed, Senate Majority Leader Mitch McConnell says he’d consider a bipartisan effort to continue payments to insurers to avert a costly rattling of health insurance markets.

McConnell told reporters Saturday there is “still a chance” the Senate could revive the measure to repeal and replace “Obamacare,” but he acknowledged the window for that is rapidly closing.

The Kentucky senator noted Republican Sen. Lamar Alexander of Tennessee is working on “some kind of bipartisan approach” that would involve subsidies for insurance companies.

Alexander recently said he will work with the committee’s top Democrat, Sen. Patty Murray of Washington state, on a bill next month that would pay insurers through 2018. In exchange, Alexander wants Democrats to agree to make it easier for states to choose their own health coverage standards that insurers must provide rather than abiding by former President Barack Obama’s law.

“If the Democrats are willing to support some real reforms rather than just an insurance company bailout, I would be willing to take a look at it,” McConnell said, hours before he was expected to speak at the famously raucous Fancy Farm picnic in western Kentucky.

Saturday marked McConnell’s first appearance in Kentucky since the failed health care vote, and he sought to reassure disappointed conservative voters who, since 2008, have elected a wave of Republican lawmakers at the state and federal level based on the promise of getting rid of “Obamacare.” Their efforts came up one vote short on July 28 in the Senate, where McConnell controls the agenda.

McConnell spoke Saturday afternoon at Fancy Farm, a rowdy political tradition where lawmakers from both parties give speeches before hundreds of hecklers. McConnell did not mention health care during his roughly five-minute speech, instead focusing on his successful effort to block Obama from filling a vacancy on the Supreme Court in the final year of his term.

A few hours before his speech, McConnell told a local gathering of Republicans that he chooses “not to dwell on situations where we come up a little bit short.” He said he consoles himself by remembering that “Hillary Clinton could be president.”

“Almost instantly, I feel better,” he said.

Kentucky Republicans, including McConnell and Gov. Matt Bevin, have openly campaigned for eliminating the Affordable Care Act, which expanded the state’s Medicaid program and brought health insurance to nearly half a million people. Despite that, voters have overwhelmingly supported Republicans, including in areas where the Medicaid expansion is the most prevalent. Democrats believe the Republican attempt to eliminate that expansion is finally getting the attention of voters who depend on the law for their health coverage.

Rocky Adkins, the Democratic leader of the Kentucky House of Representatives, said McConnell “showed his hand” by backing a proposal that the Congressional Budget Office said would eliminate health coverage for millions of people.

“I think people really opened their eyes,” said Adkins, who is considering a run for governor in 2019. “I’m seeing more energy on the ground as I travel across Kentucky than I’ve seen in my now 31 years being in the Kentucky House of Representatives.”

Andy Beshear, Kentucky’s Democratic attorney general, called the Republican health care proposals “immoral,” noting the state has some of the highest rates of cancer, heart disease and drug addiction in the country.

“I think it will bring people out to the polls in droves,” he said.

That remains to be seen. Trump is as popular as ever in Kentucky, attracting a crowd of thousands for a campaign-style rally held in Louisville earlier this year.

Bipartisan Next Steps on Health Care

No automatic alt text available.Source: The New York Times

A group of conservative and liberal health policy experts is pressing the Trump administration and Congress to take steps to quickly shore up coverage under the Obama health care law, an idea that’s been anathema to President Donald Trump and many congressional Republicans.

The plan, a copy of which was obtained by The Associated Press, includes continuing federal payments to insurers Trump has threatened to block. It says Trump and lawmakers should find a way for people to buy coverage in the handful of counties that may have no insurers next year in the federal and state insurance exchanges created by President Barack Obama’s statute.

In addition, the analysts want the administration to continue urging people to sign up for policies and helping them enroll, which was stressed under Obama. The Trump administration has signaled it might curtail those outreach programs, one of several steps it’s suggested it might take that would undermine the law.

It is unclear whether the recommendations will have much influence on one of the most politically polarizing issues in Washington. The impact might also be blunted because the Senate’s jolting July 28 defeat of the GOP effort to repeal Obama’s law has left Republicans divided over whether to seek a bipartisan deal with Democrats.

Yet the advice, from leading policy advisers to politicians of both parties, underscores that politics aside, there are steps respected voices from each side agrees could be taken to prop up a law that’s expanded coverage to around 20 million Americans. The experts urge action by Sept. 30, the end of the government’s budget year.

One signee, Lanhee Chen, policy director for Mitt Romney’s 2012 GOP presidential campaign, said that besides risking people losing coverage, “There’s also just a very real political price I think to be paid if Republicans allow the system to crash and burn.”

Ron Pollack, former director of Families USA, a main proponent of Obama’s 2010 law, said the suggestions would “lend encouragement to those that are already inclined to work on a bipartisan basis.”

Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., have said they’ll try writing legislation to temporarily continue the payments to insurers and ease some of the Obama law’s requirements.

The paper says the suggestions are aimed at stabilizing health care markets “until a longer-term resolution can be achieved and, most importantly, to protect coverage and health care access.”

The experts want lawmakers to retain some way of prodding healthy people to enroll for health coverage and penalizing them if they don’t. The purchase of policies by healthy consumers helps insurers because they are less costly to cover than sicker, more expensive customers.

GOP bills passed by the House and proposed by Senate leaders would abolish Obama’s individual mandate, which assesses tax penalties on those who don’t buy coverage. Instead, the Republican measures impose higher premiums or long waiting periods for many who were uninsured previously.

The analysts proposed giving the federal government and states more flexibility for programs and a “judicious expansion” of tax-favored health savings accounts.

Trump has threatened to halt federal payments to insurers used to reduce out-of-pocket costs for around 7 million low- and middle-income people. Obama’s law obliges insurers to lower their costs and requires the government to reimburse the companies. A federal court temporarily blocked the payments, but Obama and Trump have continued them.

Others making the recommendations include Gail Wilensky, a Republican economist and former Medicare director, and John McDonough, a senior adviser to the late Sen. Edward Kennedy during passage of Obama’s law.

The experts composed the plan as a project of the Convergence Center for Policy Resolution, a bipartisan nonprofit group that looks for solutions to divisive issues.

IRS Finalizes Premium Tax Credit Rules Virtually Unchanged

Source: Health Affairs Blog July 24, 2017, the Internal Revenue Service finalized proposed and temporary regulations governing Affordable Care Act (ACA) premium tax credits that had been issued in July of 2014. Except for one minor technical change, the 2014 proposed and temporary rules are adopted unchanged. The temporary regulations were apparently about ready to expire. The preamble to the regulation rejects a number of suggestions to extend the earlier rules, but does so in a calm and reasonable manner that is almost jarring given the current inflamed rhetoric surrounding the ACA. Until the ACA is amended, it is still the law of the land and the IRS is going to make it work.

Spousal Abandonment And Domestic Violence

Several of the rule’s provisions address situations involving spousal abandonment or domestic violence. The ACA requires married couples to file a joint return as a condition of receiving premium tax credits. This is often not possible, however, if one of the spouses is a victim of domestic violence or has been abandoned by the other spouse, who cannot be located.

In accordance with the earlier temporary rules, the final regulations allow married victims of domestic abuse or spousal abandonment to claim a premium tax credit without filing a joint return if the taxpayer files a married-filing-separately tax return and the taxpayer (i) is living apart from his or her spouse at the time of filing the return, (ii) is unable to file a joint return because of the domestic violence or abandonment situation, and (iii) indicates on his or her return that this is the case.

Domestic violence is defined to include “physical, psychological, sexual, or emotional abuse, including efforts to control, isolate, humiliate, and intimidate, or to undermine the victim’s ability to reason independently,” and is determined considering all facts and circumstances. An individual qualifies as a victim of spousal abandonment if the individual is abandoned by his or her spouse and is unable to locate his or her spouse after reasonable diligence. Individuals cannot qualify for relief from the joint filing requirement for more than three consecutive years, during which time they must presumably obtain a divorce.

A number of commenters asked the IRS to further define “reasonable diligence” and to broaden the definition of “unable to locate” to include situations where a spouse was uncooperative. The IRS decided to retain a facts and circumstances approach and noted that situations where refusal to cooperate rose to the level of psychological or emotional abuse the situation would qualify as domestic violence.

The IRS also decided against adopting several suggestions that it extend relief from joint filing to include other situations, such as same-sex partners in states that do not permit them to divorce, incarcerated spouses, or spouses living abroad, since joint returns are not impossible in these situations. The agency additionally rejected a proposal that spouses who are victims of domestic abuse be allowed to file separately even if they have not yet left their spouses at the time of filing.

The preamble clarifies that married people who are able to file separately are not ineligible for premium tax credits because they may have been eligible for their spouse’s employer coverage but refused to enroll in that coverage. The IRS rejected proposals to allow spouses who are victims of domestic violence, but who reconcile with their spouses, to use premium tax credit reconciliation rules that can be claimed by people who marry partway through a year; the agency noted that determining when spousal reconciliation occurs is more difficult than determining the date of a marriage and that such a rule would be subject to gaming.

The IRS rejected the suggestion that relief from the joint filing rule should be allowed for more than three years, noting that experience to date demonstrates that the three-year period is sufficient. It also reaffirmed guidance that spouses who are victims of domestic violence or abandonment who claim unmarried status on their marketplace applications, as they are instructed to do by the federal marketplace, and then file taxes as married filing separately will not be subject to penalties for the inconsistency. Finally, the preamble notes that the Department of Health and Human Services (HHS) provides a special enrollment period for spouses who are victims of domestic violence or spousal abandonment.

Allocation Rules

The regulations provide allocation rules for situations where premiums, the premiums for an applicable benchmark plan, and advance payments for a qualified health plan must be allocated between two or more taxpayers. This can happen when married individuals file separately or when married individuals divorce or separate during a taxable year. It can also happen when a family member (referred to as the shifting enrollee, usually a child) is enrolled in a health plan by one taxpayer (the enrolling taxpayer, usually a parent) who receives an advance premium tax credit for the family member, while the shifting enrollee is ultimately claimed as a dependent for tax purposes by another taxpayer (the claiming taxpayer; usually the other parent).

When divorces or separations or shifting enrollee situations are involved, the affected taxpayers may agree on allocation percentages, as long as the same allocation percentage is applied by both. If there is no agreement, however, divorced or separated taxpayers must allocate 50 percent of premiums, benchmark plan premiums, and advance tax credits to each spouse, as long as both are enrolled.

In shifting enrollee situations, the percentage applied is equal to the number of shifting enrollees claimed as a personal exemption deduction by the claiming taxpayer divided by the number of individuals enrolled by the enrolling taxpayer in the same qualified health plan as the shifting enrollee. Married taxpayers who do not file joint returns must allocate premiums and advance credit payments 50-50 unless the payments cover a period in which a qualified health plan covered only one of the spouses or his or her dependents. Commenters suggested other approaches to allocation, but the IRS noted the rule had been in effect since 2014 and decided to leave it alone.

One Change In Advance Premium Tax Credit Repayment Limitations

Finally, the final IRS rule makes one technical change in the 2014 temporary rules for determining advance premium tax credit repayment limitations. Self-employed people who receive tax credits may deduct the premiums that they pay beyond amounts covered by premium tax credits. The deduction, however, is limited to the amount that an individual earns from self-employment.

The final rule describes the methodology for calculating the household income for a person who can claim such a credit for purposes of determining the applicable limitation on the amount the individual may have to pay back, in the event he or she receives an excessive tax credit. The technical change adjusts the rule to reflect the fact that, as noted, a self-employed individual may not claim a deduction exceeding self-employment income.

Even Without Congress, Trump Can Still Cut Medicaid Enrollment

Image result for medi-cal photosSource: California Healthline

After the Senate fell short in its effort to repeal the Affordable Care Act, the Trump administration is poised to use its regulatory powers to accomplish what lawmakers could not: shrink Medicaid.

President Donald Trump’s top health officials could engineer lower enrollment in the state-federal health insurance program by approving applications from several GOP-controlled states eager to control fast-rising Medicaid budgets.

Indiana, Arkansas, Kentucky, Arizona and Wisconsin are seeking the administration’s permission to require adult enrollees to work, submit to drug testing and demand that some of their poorest recipients pay monthly premiums or get barred from the program.

Maine plans to apply Tuesday. Other states would likely follow if the first ones get the go-ahead.

Josh Archambault, senior fellow for the conservative Foundation for Government Accountability, said that absent congressional action on a health bill “the administration may be even more proactive in engaging with states on waivers outside of those that are already planning to do so.”

The hope, he added, is that fewer individuals will be on the program as states figure out ways “to transition able-bodied enrollees into new jobs, or higher-paying jobs.” States need to shore up the program to be able to keep meeting demands for the “truly needy” such as children and the disabled, he added.

To Medicaid’s staunchest supporters and most vocal critics alike, the waiver requests are a way to rein in the $500 billion program that has undergone unprecedented growth in the past four years and now covers 75 million people.

Waivers have often been granted in the past to broaden coverage and test new ways to deliver Medicaid care, such as through private managed-care organizations.  In California, for example, officials have used waivers to provide additional care not typically covered by Medicaid.

The state got a waiver to use federal money to cover the uninsured even before the Affordable Care Act took effect. Another California waiver helped pay for programs to keep HIV/AIDS patients out of hospitals or nursing homes. Still another revamped addiction treatment.

But critics of the new requests, which could be approved within weeks, say the new applications would instead hurt those who are most in need.

The National Health Law Program “is assessing the legality of work requirements and drug testing and all avenues for challenging them, including litigation,” said Jane Perkins, the group’s legal director.

The administration has already said it favors work requirements and in March invited states to suggest new ideas.

Before taking the top job at the Centers for Medicare & Medicaid Services, Seema Verma was the architect of a Kentucky waiver request submitted last year.

Not all states are expected to seek waivers, because Medicaid enjoys wide political support in many places, particularly in the Northeast and West.

Medicaid, the nation’s largest health insurance program, has seen enrollment soar by 17 million since 2014, when Obamacare gave states more federal funding to expand coverage for adults. It’s typically states’ second-largest expense after education.

This year, Senate and House bills tried to cap federal funding to states for the first time. Since the program began in 1965, federal Medicaid funding to states has been open-ended.

Health experts say allowing the waiver requests goes beyond the executive branch’s authority to change the program without approval from Congress.

“The point of these waivers is not for states to remake the program whole-cloth on a large-scale basis,” said Sara Rosenbaum, a health policy expert at George Washington University who chairs a Medicaid group that advises Congress.

Rosenbaum noted states received waivers for different purposes under the Obama administration.

In Iowa, state officials won the authority to limit non-emergency transportation. Indiana received approval to charge premiums and lock out enrollees with incomes above the federal poverty level if they fell behind on paying premiums.

“Now there is concern these more extreme measures would hurt enrollees’ access to care,” Rosenbaum said.

Three states seeking waivers today are home to key GOP players in the Senate health debate: Majority Leader Mitch McConnell (Kentucky), Sen. John McCain (Arizona) and Vice President Mike Pence (Indiana).

If states add premiums, as well as work and drug-testing requirements, the result would be fewer people enrolling and staying in Medicaid, said David Machledt, senior policy analyst for the National Health Law Program.

“How does that serve the purpose of the Medicaid program, and what are the limits of CMS waiver authority?” he asked.

Wisconsin, where Republican Gov. Scott Walker wants his state to become the first to require some Medicaid enrollees to undergo drug testing, is a prime waiver candidate.

State officials stress the effort is not to deter drug users from the program but to help provide treatment for drug users.

Wisconsin is also one of five states seeking a waiver to add a work requirement. People could meet the mandate through volunteering, job training or caring for an elderly relative.

In addition, Wisconsin wants to limit enrollees’ Medicaid benefits to 48 consecutive months, unless the beneficiary is working.

Enrollees with incomes from 50 percent to 100 percent of the federal poverty level, or between $6,030 and$12,060, would have to pay an $8 monthly premium.

All of these rules would apply to about 12 percent of people currently enrolled in Medicaid — adults who are not disabled and don’t have dependent children.

Wisconsin Medicaid Director Michael Heifetz said the main goal of the proposed changes is not to shrink the size of Medicaid but to get people into the workforce.

“The proposal is not designed to have folks leave the program, except for positive reasons,” he said.

If the waiver is approved, the state anticipates annual savings of nearly $50 million and a drop in enrollment of 5,102 over five years.

Wisconsin now spends $7 billion on Medicaid and has 1.2 million recipients.

Asked why childless adults — not parents — are the focus of the waivers, Heifetz said Wisconsin wanted to test the provisions on a smaller population first and focus on adults who should be able to find work.

But the Wisconsin effort has sparked broad outrage from hospitals, doctors and advocates for people with disabilities.

The Wisconsin Council of Churches said the state would be punishing the poor with its waivers — and undermining the vitality of communities.

“We are concerned the proposed changes to the program will be detrimental for the health of our most vulnerable neighbors … and undermine the social fabric and vitality of our state,” said Peter Bakken, public policy coordinator for the group in Sun Prairie, a suburb of Madison.

U.S. Health Secretary Says His Job Is to Follow Obamacare Law

Image result for tom price photosSource: The New York Times

U.S. Health and Human Services Secretary Tom Price said on Sunday that it was his department’s job to follow the law on the Affordable Care Act, former President Obama’s signature domestic initiative known as Obamacare.

Price, on NBC’s “Meet the Press,” was asked whether he would implement the Affordable Care Act as it was intended. “Our job is to follow the law of the land,” Price said, but added that “the law … is failing the American people.” He said the administration’s goal was to repeal and replace Obamacare and “put in place a system that actually works for patients.”

Trump Tells G.O.P Senators Not to Be “Total Quitters” on Health Bill

Image result for senate GOP Health Care photosSource: The New York Times

President Trump on Saturday scolded Congress for looking “like fools” and urged Republican senators not to be “total quitters” as he insisted that his push to overhaul the nation’s health care law remained viable, the day after it was rejected by the Senate.

To reinforce his demand, the president threatened to cut lawmakers’ own health insurance plans if Congress failed to revive the flagging seven-year effort to roll back the medical care program of former President Barack Obama.

It was the latest in a series of tweets he posted throughout the day, beginning shortly after 7 a.m., revealing how unsettled the president remains in losing a Senate vote to overhaul health care. One person familiar with his thinking said Mr. Trump was particularly focused on the unexpected defection of Senator John McCain, Republican of Arizona, who temporarily shelved cancer treatment in his home state and flew back to Washington to reject the president’s efforts with a dramatic thumbs-down vote.

Mr. Trump is holding out hope that the Senate will return to health care in September, and bypass parliamentary obstacles to approve it by a simple majority, according to the person familiar with the president’s thinking, who spoke on condition of anonymity. Indeed, several of Mr. Trump’s tweets on Saturday criticized use of the Senate filibuster, including one that specifically targeted Senator Mitch McConnell, Republican of Kentucky and the majority leader.

Republicans have 52 seats in the Senate. The proposal this past week to repeal portions of the health care law, as long demanded by Mr. Trump, required a simple 51-vote majority to pass but failed. It was not clear how he expected to win enough votes, or what might be different, with a new effort.

By midafternoon, Mr. Trump escalated his attack on lawmakers by taking aim at their own health care plans.

The president has sought for months to end federal subsidies for insurance markets. And as recently as Friday, staunch conservatives have demanded the end of a special subsidy for House and Senate lawmakers and their staffs, through a District of Columbia insurance exchange, instead of a system specifically for federal employees.

In a statement on Saturday, Senator Chuck Schumer, Democrat of New York and the minority leader, said health care costs would rise for millions of Americans should the federal subsidy for insurance markets be scrapped.

“The president ought to stop playing politics with people’s lives and health care, start leading and finally begin acting presidential,” Mr. Schumer said.

Mr. Trump’s repeated criticisms of Senate process also have rankled Republican leaders.

Antonia Ferrier, a spokeswoman for Mr. McConnell, declined to comment on Mr. Trump’s posts. “If the leader issues any statements, we’ll be sure to pass along,” she said.

Mr. McConnell’s former chief of staff, Josh Holmes, cited Mr. Trump’s tweets on Saturday as he sardonically suggested on Twitter a “search for the idiot who keeps putting the President on irrelevant and counterproductive crusades.”

Mr. McConnell changed the filibuster rules to allow all presidential nominees to be confirmed by a simple majority, and he extended that to allow Neil M. Gorsuch, Mr. Trump’s nominee for the Supreme Court, to be confirmed as well.

But historically, and facing increasingly narrow elections that can flip control of the Senate every few years, most senators have opposed permanently jettisoning the rule that allows the minority party to indefinitely obstruct something that has majority support. Mr. McConnell has made clear he opposes such a move, as have other members of the Republican caucus. That means that even if he wanted to, he could not end the filibuster on his own.

The president on Saturday also cited a “Fox and Friends” report that claimed Russia was behind an investigation that last year produced a dossier about alleged unseemly incidents in Mr. Trump’s past. He said the Fox report showed that “Russia was against Trump in the 2016 election” and again blasted the several continuing federal investigations into possible collusion between his campaign and Russia as a “witch hunt.”

Late Friday, the White House announced that Mr. Trump would sign legislation that limits his power to lift sanctions against Russia, Iran and North Korea. The White House had initially resisted the bill.

Last Updated 8/2/2017

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