Biden Executive Order on Medicaid and the Affordable Care Act | Citizens Against Government Waste

Biden Executive Order on Medicaid and the Affordable Care Act

The WasteWatcher

On January 28, President Biden signed his 25th Executive Order (EO), the “Strengthening Medicaid and the Affordable Care Act.” The EO included creating a special enrollment period for the Affordable Care Act (ACA) because the COVID-19 pandemic had created “a historic public health and economic crisis.”  The EO fact sheet states it will “reverse attacks on and strengthen Medicaid and the Affordable Care Act, so they can continue to provide access to life-saving care for millions of Americans” and the administration will protect and strengthen Medicaid and the ACA and to make high-quality healthcare accessible and affordable for every American.  Unfortunately, their actions will do the opposite.

Creating a special ACA, or Obamacare, enrollment period is more about messaging then accomplishing something extraordinary.  Millions of American lost their health insurance because they were laid off due to government-wide shutdowns to stop the spread of COVID-19.  But anyone who had health insurance and wanted to purchase an ACA plan could have done so under the already existing Special Enrollment Period (SEP).  Qualifications include “certain life events” like losing healthcare coverage.  Some people, who had health coverage through their employer, may have chosen to use COBRA instead, which allows them to stay in their employer’s insurance plan up to 18 months. 

In addition, because the Federal Emergency Management Agency declared COVID-19 a national emergency, if someone missed the 60-day deadline to participate in a SEP due to being impacted by COVID-19, like caring for a family member who was sick or getting sick themselves, they could have qualified for another SEP.  And people who lost their job and were eligible for Medicaid could have enrolled in that program

The Biden EO demands an immediate review of all existing regulations, orders, guidance, and other government actions that “undermine” and erect “unnecessary barriers” to ACA and Medicaid.  This includes demonstrations and waivers that were implemented during the Trump administration that provided more health insurance choices to individuals, families, and employers.  This EO is therefore more about saving the structure of Obamacare than offering choices to consumers.  The Biden EO also revoked President Trump’s EO 13765 that was signed on January 20, 2017, “Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal” and EO 13813, signed on October 12, 2017, “Promoting Healthcare Choice and Competition Across the United States.”

President Trump’s EO 13765 attempted to minimize the ACA’s economic burden pending its repeal and paved the way for other innovative actions to help replace the healthcare law.  After all, Republicans had promised ACA’s repeal for years and in 2017 they controlled the House, the Senate, and the executive branch.  Unfortunately, they failed to repeal Obamacare.

EO 13765 stated that the Secretary of Health and Human Services and other agency heads to “the maximum extent permitted by law … shall exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications” and paved the way for EO 13813 signed in October 2017.

The purpose of EO 13813 was to increase choice and competition in the ACA because the law had “largely failed to provide meaningful choice or competition between insurers, resulting in one-third of America's counties having only one insurer offering coverage on their applicable government-run exchange in 2017.”

The EO prioritized the improvement, expansion, and development of association health plans (AHP), short-term, limited-duration insurance plans (STLDI) and health reimbursement arrangements (HRA).  CAGW wrote about the value of these plans in an October 2017 WasteWatcher.  In June 2018, a final rule was issued for AHPs; in August 2018, a final rule was issued for STLDIs; and in June 2019, a final rule was issued for HRAs that allows employers to funded a health reimbursement account that allows employees to purchase on or off exchange individual health insurance coverage.  This would be particularly beneficial for smaller businesses.

The AHP rule made it easier for small employers across to band together, including across state lines, and purchase group insurance, enabling them to negotiate better rates, like a large company.  A May 2018 Congressional Budget Office report found that once the new AHP rule was fully in effect, that about 4 million people who would not have had insurance would through an AHP.  But the AHP rule faced a court challenge almost immediately. 

In July 2018, 11 states and the District of Columbia sued, saying the rule was unlawful because AHPs would not be forced to be subject to Obamacare’s mandatory 10 essential benefits.  Even though it was argued the AHPs provided practically all of the essential benefits, except for dental and vision care for children, in March 2019 a U.S. District Court in the District of Columbia agreed with the plaintiffs.  The Department of Justice appealed to the U.S. Court of Appeals, District of Columbia Circuit, and it was heard in November 2019.  A decision has been pending for more than a year.  Only plans that existed in March 2019 could continue, but they could not be renewed, and new ones could be not created.  Now the Biden Justice Department has asked for time to review the case to decide how to proceed, but the damage to expanding AHPs has been done.

STLDs existed before the Trump administration and provided healthcare coverage for people who were transitioning from one health plan to another, such as looking for new employment.  These plans were liked because they were not bound to Obamacare’s 10 essential benefits, like forcing a male to purchase maternity care.  The Obama administration restricted their use by limiting these plans to less than three months of coverage.  But the Trump administration expanded their use to less than 12 months, allowed them to be renewed for up to 36 months, and required language that explained clearly that the plan is not required to follow ACA’s requirements. 

The STLD rule also faced legal challenges even before the rule took effect.  Plaintiffs filed suit in the U.S. District Court in the District of Columbia in September 2018.  In July 2019 the judge sided with the Trump administration, and in July 2020 the U.S. Court of Appeals for the D.C. Circuit upheld the rule.  The Galen Institute’s Brian Blase and Doug Badger wrote in an August 2020 Health Affairs blog about the value of STLD plans, especially those that became unemployed during the COVID-19 pandemic.  However, Democrats have long opposed STLD plans, labeling them “junk.”  While it is likely the Biden administration would want to revert them to their status under the Obama administration, it may be difficult to do, especially during a pandemic, they were upheld by the Court of Appeals, and they have been in place for two years.

The HRA rule took effect in January 2020 and Galen Institute Senior Fellow Brian Blase has written that the rule “has the potential to significantly expand employees' control over their health insurance since most employers that offer health benefits only provide a single choice of health plan.  An HSA-compatible individual-coverage HRA will maximize employees' control over their current and future health care needs and will improve overall health policy in the United States.”  It is not known yet how the Biden administration will, if at all, address HRAs.

President Biden’s EO also requires the Department of Health and Human Services (HHS) to review Medicaid work requirements under 1115 waivers, which allow states to test new approaches in the program.  In January 2018, the Centers for Medicare and Medicaid (CMS) used the 1115 waiver to respond to “numerous state requests to test programs through Medicaid demonstration projects under which work or participation in other community engagement activities – including skills training, education, job search, volunteering or caregiving – would be a condition for Medicaid eligibility for able-bodied, working-age adults. This would exclude individuals eligible for Medicaid due to a disability, elderly beneficiaries, children, and pregnant women.”  This is especially important in states where ACA’s Medicaid expansion has been implemented, allowing able-bodied adults to be beneficiaries, and are consuming increasing percentages of state budgets.  The Biden administration believes work requirements “undermine” the program.

But these work requirements are viewed quite differently by 19 states, although not all states have implemented them due to pending court decisions.  Both Arkansas and New Hampshire were sued over their Medicaid work requirements and have been defending their waivers in the courts, which have been struck down in federal appeals courts.  In July 2020, the Trump administration asked the Supreme Court of the United States (SCOTUS) to reinstate the work requirements.  In December 2020, the SCOTUS agreed to hear and combined their cases.  There are 17 other states with Republican Attorneys General that have filed an amicus brief and Nebraska has filed a separate brief that argues the lower courts’ rulings were flawed.

Former Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma signed a “Letter of Agreement” on January 4, 2021 that provided new terms, including that any CMS effective date to withdraw 1115 waivers cannot take place nine months before it intends to invoke the policy.  The Foley Hoag law firm writes in a January 29 “Medicaid and the Law” blog that this action may make it more difficult for the Biden administration to simply rescind the 1115 work requirement waivers, especially with a pending SCOTUS case and 19 states eager to keep them.  Time will tell if the Biden administration is successful in yanking work requirements for Medicaid beneficiaries who are perfectly capable of complying with the rules.

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