A Little Choice About PPACA Risk Corridors That Could Have Big Consequences

The Patient Protection and Affordable Care Act has made even the most technical questions of healthcare coverage regulation newsworthy. Policy questions that would be noticed only by experts and interested parties in the regulation of Medicare or Medicaid, even with billions of dollars in taxpayer or beneficiary money at stake (think DSH and the transition to MS-DRGs), are front-page news when they have a connection to the PPACA.  The best example may be the recent attention to the PPACA’s risk corridors, which was the subject of an op-ed by Senator Rubio last week that led to a lot of discussion in the press.  (For background on the risk corridors, as well as their cousins, the risk adjustment program and transitional reinsurance, see the helpful efforts of Seth Chandler, Mark Hall (also here), and Timothy Jost.)

In that spirit, I noticed in my research a tiny regulatory policy choice made by the HHS about the risk corridors that may wind up making news one of these days, in a lawsuit or otherwise.  It has to do with the way the risk corridor payments are calculated, and could have an impact on the extent of taxpayer liability for risk corridor payments.  Read More

More thoughts on the legality of the like it/keep it fix.

Yesterday, President Obama held a lengthy press conference in which he took responsibility for recent problems in the implementation of the Patient Protection and Affordable Care Act and announced that the Administration would allow health insurers to re-establish certain canceled plans for 2014 even if they do not comply with the PPACA.  Specifically, he said “we’re going to extend [the principle behind the grandfather clause] both to people whose plans have changed since the law took effect and to people who bought plans since the law took effect.”

Jonathan Adler at Volokh, co-blogger Chris Robertson here at Bill of Health, Nicholas Bagley at The Incidental Economist, and Seth Chandler at ACA Death Spiral, have all offered thoughts on the legality of the President’s decision to grandfather administratively plans that were being canceled for non-compliance with certain PPACA requirements.  House Speaker John Boehner, for his part, said of the move: “I’m highly skeptical they can do this administratively.  I just don’t see within the law their ability to do it.”

I’ve a few thoughts of my own to add on the prospects for a successful lawsuit challenging the fix: Read More

Why the Administration Will Think Twice Before Delaying the Individual Mandate

It has been widely reported that people are having trouble buying healthcare through the online exchanges due to technical difficulties, a situation President Obama addressed from the Rose Garden on Monday, saying “no one is madder than me” and encouraging people to try to sign up by telephone rather than online.  Ezra Klein calls the rollout, so far, a “failure” but says the real question is how long it takes for the exchanges to get running smoothly.

Klein is right about that: it would seem unfair to impose a tax on someone for failing to obtain insurance if they tried but were unable to do so due to problems with the government-run website.  Yet that is what the well-known individual mandate codified at 26 U.S.C. § 5000A(b)(1) says: a taxpayer who goes a month (or more) without health insurance after the effective date must pay a tax penalty.  There is no exception for taxpayers who tried and failed to get health insurance through the exchanges.  Or is there?

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Another Wrinkle in Exchange Rollout? Private Sites Attempting to Lure Shoppers Looking for Exchanges

Yesterday saw two reports—perhaps the first of many—discussing the emergence of an additional wrinkle in the rollout of the health exchanges: private websites attempting to lure shoppers away from the government exchanges with websites that look and sound like the real thing.

According to an article posted by WMUR New Hampshire, the state insurance commissioner has issued a cease-and-desist letter to the owner of one website, newhampshirehealthexchange.com, that is allegedly trying to take advantage of shoppers hoping to acquire insurance through the real exchange.  New Hampshire’s not the only state dealing with this sort of issue.

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