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116th Congress } { Rept. 116-43
HOUSE OF REPRESENTATIVES
1st Session } { Part 1
======================================================================
PROVIDING THAT THE RULE ENTITLED ``SHORT-TERM, LIMITED DURATION
INSURANCE'' SHALL HAVE NO FORCE OR EFFECT
_______
April 29, 2019.--Ordered to be printed
_______
Mr. Scott of Virginia, from the Committee on Education and Labor,
submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 1010]
[Including cost estimate of the Congressional Budget Office]
The Committee on Education and Labor, to whom was referred
the bill (H.R. 1010) to provide that the rule entitled ``Short-
Term, Limited Duration Insurance'' shall have no force or
effect, having considered the same, report favorably thereon
without amendment and recommend that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Committee Action................................................. 2
Committee Views.................................................. 4
Section-by-Section Analysis...................................... 9
Explanation of Amendments........................................ 9
Application of Law to the Legislative Branch..................... 9
Unfunded Mandate Statement....................................... 9
Earmark Statement................................................ 9
Roll Call Votes.................................................. 9
Statement of Performance Goals and Objectives.................... 15
Duplication of Federal Programs.................................. 15
Hearings......................................................... 15
Statement of Oversight Findings and Recommendations of the
Committee...................................................... 15
New Budget Authority and CBO Cost Estimate....................... 15
Committee Cost Estimate.......................................... 19
Changes in Existing Law Made by the Bill, as Reported............ 19
Minority Views................................................... 20
PURPOSE AND SUMMARY
The purpose of H.R. 1010, To provide that the rule entitled
``Short-Term, Limited Duration Insurance'' shall have no force
or effect, is to protect consumers by reversing the harmful
rule promulgated by the U.S. Department of the Treasury, the
U.S. Department of Labor, and the U.S. Department of Health and
Human Services that has expanded Short-Term, Limited Duration
Insurance (STLDI). The bill is necessary because STLDI is
exempt from many basic consumer protections such as
prohibitions on medical underwriting, prohibitions on denying
coverage due to health status, and prohibitions on lifetime or
annual coverage limits. Although the Patient Protection and
Affordable Care Act (ACA) eliminated these and other harmful
practices in the individual insurance market, the rule has
created a loophole, allowing plans to circumvent these vital
consumer protections.
COMMITTEE ACTION
115th Congress
On September 13, 2018, Congresswoman Kathy Castor (D-FL-14)
and fifty-six House Democratic cosponsors introduced H.J. Res.
140, Providing for congressional disapproval under chapter 8 of
title 5, United States Code, of the final rule of the
Department of the Treasury, the Department of Labor, and the
Department of Health and Human Services relating to ``Short-
Term, Limited-Duration Insurance.'' H.J. Res. 140 was referred
to the Committees on Energy and Commerce, Education and the
Workforce, and Ways and Means. No further action was taken
during the 115th Congress.
116th Congress
On February 6, 2019, Congresswoman Castor, Congresswoman
Lauren Underwood (D-IL-14), Congressman Mark DeSaulnier (D-CA-
11), Congresswoman Gwen Moore (D-WI-4), Congresswoman Nanette
Diaz Barragan (D-CA-44), and Congressman Steven Horsford (D-NV-
04) introduced H.J. Res. 43, Providing for congressional
disapproval under chapter 8 of title 5, United States Code, of
the final rule of the Department of the Treasury, the
Department of Labor, and the Department of Health and Human
Services relating to ``Short-Term, Limited-Duration
Insurance.'' H.J. Res. 43 was referred to the Committees on
Energy and Commerce, Education and Labor, and Ways and Means.
On February 6, 2019, Congresswoman Castor, Congresswoman
Underwood, Congressman DeSaulnier, Congresswoman Moore,
Congresswoman Barragan, and Congressman Horsford introduced
H.R. 1010, To provide that the rule entitled ``Short-Term,
Limited Duration Insurance'' shall have no force or effect.
H.R. 1010 was referred to the Committees on Energy and
Commerce, Education and Labor, and Ways and Means.
On February 6, 2019, the Committee on Education and Labor
held a hearing entitled ``Examining Threats to Workers with
Preexisting Conditions'' to examine executive, judicial, and
legislative threats to working Americans with preexisting
medical conditions, including the Administration's expansion of
STLDI through the final rule of the U.S. Departments of
Treasury, Labor, and Health and Human Services. Witnesses
included: Dr. Rahul Gupta, Senior Vice President and Chief
Medical Health Officer, March of Dimes, Arlington, VA; Ms.
Grace Marie Turner, President, Galen Institute, Paeonian
Springs, VA; Ms. Sabrina Corlette, Research Professor,
Georgetown University Health Policy Institute Center on Health
Insurance Reforms, Washington, D.C.; and Mr. Chad Riedy,
patient advocate living with Cystic Fibrosis, Alexandria, VA.
On February 13, 2019, the Committee on Energy and
Commerce's Subcommittee on Health held a hearing entitled
``Strengthening Our Health Care System: Legislation to Reverse
ACA Sabotage and Ensure Pre-Existing Conditions Protections.''
The hearing examined a number of important legislative
proposals to undo sabotage of the ACA, protect patients with
preexisting medical conditions, and improve access to
affordable and comprehensive health coverage. Among the bills
considered at the hearing was H.R. 1010. Witnesses included:
Ms. Grace-Marie Turner, President, Galen Institute, Paeonian
Springs, VA; Ms. Katie Keith, Associate Research Professor and
Adjunct Professor of Law, Georgetown University, Washington,
D.C.; and Ms. Jessica K. Altman, Commissioner, Pennsylvania
Insurance Department, Harrisburg, PA. On March 27, 2019, the
Health Subcommittee marked up H.R. 1010 and favorably forwarded
the bill to the full Committee on Energy and Commerce. On April
3, 2019, the full Committee on Energy and Commerce marked up
H.R. 1010 and ordered it to be favorably reported to the House
of Representatives.
On April 9, 2019, the Committee on Education and Labor (the
Committee) held a full committee markup of H.R. 1010. The
Committee ordered the bill to be favorably reported without
amendment to the House of Representatives by a vote of 26-19.
During the markup, the following amendments were offered
but not adopted:
Congressman David P. Roe (R-TN-1) offered an
amendment to: strike Section 1 of H.R. 1010, thereby keeping in
place the final rule on short-term, limited duration insurance;
amend the Public Health Service Act to define short-term,
limited duration insurance as insurance coverage with an
expiration date that is less than 12 months; and provide that
short-term, limited duration insurance coverage be subject to
guaranteed renewability. The amendment was ruled not germane.
Congressman Dusty Johnson (R-SD-At Large) offered
an amendment to provide for the application of the short-term,
limited duration insurance rule in a State if the State submits
a request that the rule be offered for the year. The amendment
was defeated by a vote of 19-25.
Congressman Tim Walberg (R-MI-7) offered an
amendment to condition the implementation of H.R. 1010 on a
study by the Secretaries of Health and Human Services, Labor,
and Treasury to determine whether consumers are provided with
adequate disclosures by entities offering short-term, limited
duration insurance. The amendment was defeated by a vote of 19-
26.
Congressman Ron Wright (R-TX-6) offered an
amendment to provide for the continued application of the
short-term, limited duration insurance rule in a plan year for
any rating area where the average premium for the second-
lowest-cost silver plan increased by 20 percent or more
relative to the previous year. The amendment was defeated by a
vote of 19-26.
Congressman William R. Timmons, IV (R-SC-4)
offered an amendment to provide for the continued application
of the short-term, limited duration insurance rule in a local
jurisdiction if there are fewer than two qualified health plan
issuers in a plan year in that jurisdiction. The amendment was
defeated by a vote of 19-26.
COMMITTEE VIEWS
Introduction
Short-term, limited duration insurance (STLDI) plans are
marketed to consumers as an alternative to traditional health
insurance. They are designed to be temporary in nature,
providing coverage for consumers during brief periods of
uninsurance. Due to the meager benefits they provide, their
harmful impact on the overall risk pool, and their largely
unregulated status under federal law, these plans directly
threaten Americans' access to quality, affordable health
coverage. The final rule issued by the U.S. Department of the
Treasury, the U.S. Department of Labor, and the U.S. Department
of Health and Human Services will expand the prevalence of
STLDI, weakening the stability of the insurance market and
undermining vital consumer protections.
The Affordable Care Act Strengthened Consumer Protections
On March 23, 2010, President Barack Obama signed the
Patient Protection and Affordable Care Act (ACA) into law. The
law has improved the lives of millions of Americans by
increasing the affordability of health insurance, slashing the
uninsured rate, and improving the quality of health coverage.
Since enactment, the ACA has expanded health insurance coverage
to over 20 million Americans.\1\ The ACA also instituted
dramatically more comprehensive protections in both the
individual and group health care markets, particularly for
people with preexisting conditions. The law's consumer
protections include:
---------------------------------------------------------------------------
\1\Democratic Staff of the U.S. House Committee on Education and
the Workforce, Accessible, Affordable Health Care: A Right, Not a
Privilege 1 (2017), https://edlabor.house.gov/imo/media/doc/Report%20-
%20Accessible,%20Affordable%20Health%20Care%20A%20Right%20Not%20A%
20Privilege_Ed %20&%20the%20Workforce%20Dems.pdf.
---------------------------------------------------------------------------
Guaranteed Issue and Renewability: The ACA's
guaranteed issue and renewability of coverage provisions
require insurers to accept every applicant for health coverage,
regardless of health status.\2\ Practically, this means an
insurer must accept and renew health coverage, even if the
consumer has a preexisting condition, is sick, or has sought
medical treatment.
---------------------------------------------------------------------------
\2\ Provisions of the Health Insurance Portability and
Accountability Act of 1996, Pub. L. 104-191, 110 Stat. 1936 (HIPAA),
applied this protection generally to the small group market and to
certain ``HIPAA-eligible'' individuals in the nongroup market.
---------------------------------------------------------------------------
Adjusted Community Rating: Under the ACA, insurers
in the individual and small group market are prohibited from
charging higher premiums based on health status and may only
vary premiums based on family size, age,\3\ geographic area,
and tobacco use.
---------------------------------------------------------------------------
\3\Age rating is restricted such that plans may charge older
individuals no more than three times more than younger individuals.
---------------------------------------------------------------------------
Essential Health Benefits: Under the ACA,
individual market and small group plans must cover ten
categories of essential health benefits.\4\ Prior to the ACA,
insurers often excluded coverage of maternity care, mental
health care, substance use disorder treatment, among other
benefits.\5\
---------------------------------------------------------------------------
\4\While large group and self-insured plans do not need to comply
with Essential Health Benefits (EHB) requirements, if these plans cover
a specific EHB category, then the plan cannot impose an annual or
lifetime limit on that category of coverage.
\5\Gary Claxton et al., Would States Eliminate Key Benefits if AHCA
Waivers are Enacted? 1 (2017), http://files.kff.org/attachment/Issue-
Brief-Would-States-Eliminate-Key-Benefits-if-AHCA-Waivers-are-Enacted.
---------------------------------------------------------------------------
Elimination of Lifetime and Annual Caps: Under the
ACA's elimination of lifetime and annual benefit caps,
consumers--including those with job-based insurance--are
protected from these coverage limits. Consumers now have new
safeguards against unreasonable out-of-pocket expenses, which
can be financially crippling for many families, especially
those struggling to make ends meet while facing or recovering
from a major health issue. Before the ACA, more than 90 percent
of nongroup plans had annual or lifetime caps on coverage; most
employer-provided plans also imposed lifetime limits.\6\
---------------------------------------------------------------------------
\6\Loren Adler & Paul B. Ginsburg, Health Insurance as Assurance:
The Importance of Keeping the ACA's Limits on Enrollee Health Costs,
Brookings, (Jan. 1, 2017), https://www.brookings.edu/blog/usc-
brookings-schaeffer-on-health-policy/2017/01/17/health-insurance-as-
assurance-the-importance-of-keeping-the-acas-limits-on-enrollee-health-
costs/.
---------------------------------------------------------------------------
Elimination of Preexisting Health Condition
Exclusions: Under the ACA, all health plans are prohibited from
excluding coverage for preexisting health conditions.\7\ In
2002, roughly one in three workers were in a plan that had
preexisting condition exclusions.\8\ Prior to the ACA,
protections for people with preexisting conditions were
inconsistent across the country, but in the majority of states
consumers could be subjected to denials of coverage, higher
premiums, or exclusions.\9\
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\7\ Previously, HIPAA provided that individuals with employer-
sponsored coverage could generally be subject to up to a 12-month
exclusion period for preexisting health conditions for which the
enrollee sought treatment in the previous six months before enrollment
in the health plan. Non-HIPAA-eligible individuals in the individual
market had no federal protections from these exclusions whatsoever.
\8\Kaiser Family Foundation, Employer Health Benefits Annual Survey
138 (2002), https://kaiserfamilyfoundation.files.wordpress.com/2013/04/
3251.pdf.
\9\Sandy Ahn, How Accessible and Affordable were Individual Market
Health Plans before the Affordable Care Act? Depends Where You Lived 3
(2017), https://www.rwjf.org/content/dam/farm/reports/issue_briefs/
2017/rwjf434339.
---------------------------------------------------------------------------
Short-Term, Limited Duration Insurance is Harmful to Consumers
STLDI plans are not clearly defined in federal law and have
explicitly been excluded from the definition of individual
health insurance coverage under the Public Health Service
Act.\10\ Because they are not individual health insurance
coverage, these plans are not subject to vital consumer
protections that apply to traditional health insurance plans.
For example, plans offered for sale in the individual market
are prohibited from denying coverage or charging individuals
more for having a preexisting condition. In contrast, STLDI
plans are permitted to limit coverage of services associated
with a preexisting condition as well as charge higher premiums
based on age, gender, and health status--or deny coverage
altogether. The implications of the ability of STLDI to
circumvent these protections are enormous. One major insurer
has even defined a preexisting condition as one ``that would
cause a reasonable person to seek diagnosis, care or
treatment,'' even if the individual has not actually sought
care for the condition.\11\
---------------------------------------------------------------------------
\10\See Public Health Service Act Sec. 2791(b)(5), 42 U.S.C.
Sec. 300gg-91(b)(5).
\11\Dania Palanker et al., New Executive Order: Expanding Access to
Short-Term Health Plans is Bad for Consumers and the Individual Market,
Commonwealth Fund (Oct. 11, 2017), http://www.commonwealthfund.org/
publications/blog/2017/aug/short-term-health-plans#/.
---------------------------------------------------------------------------
There is also no guarantee that STLDI will meet the health
coverage needs of enrollees. STLDI plans do not have to offer
essential health benefits, and as a result, consumers can be
denied access to basic health care that would otherwise be
covered in a traditional individual market plan.\12\ In fact,
one analysis of plans offered on leading brokerage sites found
that more than half of the short-term plans offered did not
cover substance use disorder treatment, seven in ten did not
cover outpatient prescription drugs, and none covered maternity
care.\13\
---------------------------------------------------------------------------
\12\Karen Pollitz et al., Understanding Short-Term Limited Duration
Health Insurance 2 (2018), http://files.kff.org/attachment/Issue-Brief-
Understanding-Short-Term-Limited-Duration-Health-Insurance.
\13\Id.
---------------------------------------------------------------------------
In addition, consumers enrolled in STLDI plans may be
subject to devastating out-of-pocket costs when they have a
major medical expense. Because STLDI plans are not subject to
the ACA's annual and lifetime caps on out-of-pocket expenses,
consumers often have little protection against exorbitant out-
of-pocket costs arising from their care. For example, one heart
attack victim was left with $900,000 in bills after his insurer
refused to cover bypass surgery under his short-term plan, and
a stroke victim ``was left with $250,000 in unpaid medical
bills because the policy did not cover prescription drugs and
other basic treatment.''\14\ STLDI is not subject to other ACA
requirements--such as rate review or the medical loss ratio.
While ACA-compliant plans are required to spend at least 80
percent of premiums on claims and actual health care-related
expenses, rather than corporate bonuses and administration, the
average loss ratio for individual market short-term plans in
2016 was 67 percent; for the top two insurers the average loss
ratio was even lower, at a mere 50 percent.\15\
---------------------------------------------------------------------------
\14\Reed Abelson, Without Obamacare Mandate, `You Open the
Floodgates' for Skimpy Health Plans, New York Times (Nov. 30, 2017),
https://www.nytimes.com/2017/11/30/health/health-insurance-obamacare-
mandate.html.
\15\Karen Pollitz et al., supra note 12, at 2.
---------------------------------------------------------------------------
The Trump Administration's Efforts To Roll Back Consumer Protections
Against Short-Term, Limited Duration Coverage
Concerned the STLDI plans were increasingly being relied
upon as a primary form of health insurance coverage, the Obama
Administration took steps to protect consumers from the sale of
these policies. On October 31, 2016, the U.S. Departments of
Health and Human Services, Labor, and the Treasury
(collectively, the Departments), jointly published a final rule
to ensure that STLDI plans were offered for truly short-term,
gap-filling coverage, noting that ``these policies may have
significant limitations, such as lifetime and annual dollar
limits on essential health benefits and pre-existing condition
exclusions, and therefore may not provide meaningful health
coverage.''\16\ Accordingly, the Departments' final rule
required improved disclosures to warn consumers that STLDI
plans do not constitute minimum essential coverage under the
ACA, and it restricted the duration for which policies could be
sold and renewed to three months.\17\
---------------------------------------------------------------------------
\16\81 Fed. Reg. 75317 (Oct. 31, 2016).
\17\Id.
---------------------------------------------------------------------------
On October 12, 2017, President Trump signed an Executive
Order (EO) entitled ``Promoting Healthcare Choice and
Competition across the United States.''\18\ In the EO, the
President attacked the ACA and promised to loosen consumer
protections and expand the prevalence of health plans that do
not comply with federal law. Pursuant to the EO, on February
21, 2018, the Departments jointly published a proposed rule
expanding the availability of short-term plans.\19\ On August
3, 2018, the Departments jointly published a final rule to
extend the allowable duration of STLDI from three months to up
to 12 months, with plans renewable for up to 36 months.\20\
---------------------------------------------------------------------------
\18\Exec. Order No. 13813, 82 Fed. Reg. 48385 (Oct. 12, 2017).
\19\83 Fed. Reg. 7437 (Feb. 21, 2018).
\20\83 Fed. Reg. 38212 (Aug. 3, 2018).
---------------------------------------------------------------------------
The Departments' rulemaking was widely criticized by
stakeholders. Twenty-one of the largest organizations that
represent patients and consumers across America found that the
expansion of STLDI plans would ``seriously undermine the key
principles of access, adequacy, and affordability [that
underpin the ACA].''\21\ These groups asserted that
``implementing these policies will once again leave patients
and consumers in the lurch with insufficient coverage, unpaid
medical bills, long-term impacts on their financial wellbeing,
and lifelong health implications--just as many of these plans
did prior to the enactment of the ACA.''\22\ Strikingly, an
analysis published by the Los Angeles Times found that 98
percent of the over 300 patient and consumer advocates,
physician and provider organizations, and other health care
stakeholders that submitted comments opposing or criticizing
the rule.\23\
---------------------------------------------------------------------------
\21\Letter from American Cancer Society Cancer Action Network et
al. to Secretary of Health and Human Services Alex Azar (Apr. 23,
2018), https://www.fightcancer.org/sites/default/files/
National%20Documents/042318%20Coalition%20Comments%20on%20STLDPs%20%20-
%20SIGNED%20FINAL.pdf (Comment on the Centers for Medicare Medicaid
Services (CMS) Proposed Rule: Short-Term, Limited-Duration Insurance).
\22\Id. at 3.
\23\Noam N. Levey, Trump's New Insurance Rules are Panned by Nearly
Every Healthcare Group that Submitted Formal Comments, LA Times (May
30, 2018, 3:00 AM), https://www.latimes.com/politics/la-na-pol-trump-
insurance-opposition-20180530-story.html.
---------------------------------------------------------------------------
Why Congressional action is needed to protect consumers, including
those with preexisting conditions
STLDI is a threat to the wellbeing of millions of
Americans, particularly those living with preexisting
conditions. According to the U.S. Department of Health and
Human Services, the number of Americans with preexisting
conditions ranges from at least 61 million people (or 23
percent of Americans)\24\ to as many as 133 million people (51
percent of Americans).\25\ With respect to STLDI plans, there
are no safeguards to protect these individuals against actions
by insurers that would discriminate, deny coverage, medically
underwrite, or otherwise not provide coverage to individuals
with preexisting conditions who enroll or attempt to enroll in
a policy.
---------------------------------------------------------------------------
\24\Based on a narrow definition using eligibility criteria for
pre-ACA state high-risk pools. U.S. Department of Health and Human
Services; see ASPE Issue Brief, Health Insurance Coverage for Americans
with Preexisting Conditions: The Impact of the Affordable Care Act 1
(2017), https://aspe.hhs.gov/system/files/pdf/255396/Pre-
ExistingConditions.pdf.
\25\Based on a broader definition more similar to the underwriting
criteria used by insurers prior to the ACA. Id.
---------------------------------------------------------------------------
On February 6, 2019, the House Committee on Education and
Labor's hearing on ``Examining Threats to Workers with
Preexisting Conditions'' explored this issue in more detail. As
Congressman Robert C. ``Bobby'' Scott, Chairman of the
Committee, noted in his opening statement, the lack of
protections for patients with preexisting conditions and other
federal consumer protections in STLDI plans poses a severe
threat to millions of Americans.\26\ Dr. Rahul Gupta, Senior
Vice President and Chief Medical and Health Officer for March
of Dimes, testified that STLDI plans could be ``disastrous'' to
the health of moms and babies because these plans often do not
cover ``preventive care like contraception, as well as
prenatal, maternity and newborn care.''\27\ Sabrina Corlette,
Research Professor at the Georgetown University Health Policy
Institute's Center on Health Insurance Reforms, testified that
``[w]ith respect to the preexisting conditions . . . [STLDI
plans] will look at your medical history and even if you were
not given a formal diagnosis they might say that you had the
condition . . . before you enrolled and might disenroll you
because of that.''\28\
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\26\Examining Threats to Workers with Preexisting Conditions,
Before the H. Comm. on Education and Labor, 116th Cong. (2019) (opening
statement of Congressman Robert C. ``Bobby'' Scott, Chairman, at 2).
\27\Id. (written testimony of Rahul Gupta, Senior Vice President
and Chief Medical and Health Officer for March of Dimes, at 10).
\28\Id. (testimony of Sabrina Corlette, Research Professor at the
Georgetown University Health Policy Institute's Center on Health
Insurance Reforms).
---------------------------------------------------------------------------
Moreover, the expansion of STLDI threatens the overall
stability of the larger health care market.\29\ As the Blue
Cross Blue Shield Association noted in their comment on the
Obama Administration's 2016 proposed rule, the expansion of
STLDI would create ``two risk pools, the ACA pool for people
with pre-existing conditions and the STLD[I] pool for persons
without pre-existing conditions.''\30\ Similarly, multiple
studies have found that the adverse selection associated with
the expansion of SLDTI will have a deleterious impact on
consumers enrolled in traditional health coverage.\31\
According to the Urban Institute, premiums in the nongroup
market could be expected to increase by more than 18 percent in
states that do not restrict these plans.\32\
---------------------------------------------------------------------------
\29\Letter from Congressman Frank Pallone, Jr., et al., to
Secretary of the Treasury Steven Mnuchin, et al. (Jan. 8, 2019),
https://energycommerce.house.gov/sites/
democrats.energycommerce.house.gov/files/documents/
Letter%20re%20the%20Administration
%e2%80%99s%20Final%20Rule%20on%20Short-Term%20Plans.pdf.
\30\Letter from Blue Cross Blue Shield Association (Aug. 9, 2016),
https://www.regulations.gov/contentStreamer?documentId=IRS-2016-0021-
0127&attachmentNumber=1&contentType=pdf (Comments on Proposed Rule on
Expatriate Health Plans, Expatriate Health Plan Issuers, and Qualified
Expatriates; Excepted Benefits; Lifetime and Annual Limits; and Short-
Term, Limited-Duration Insurance).
\31\Katie Keith, The Short-Term, Limited-Duration Coverage Final
Rule: The Background, The Content, and What Could Come Next, Health
Affairs (Aug. 1, 2018), https://www.healthaffairs.org/do/10.1377/
hblog20180801.169759/full/.
\32\Linda J. Blumberg, et al., The Potential Impact of Short-Term,
Limited Duration Policies on Insurance Coverage, Premiums, and Federal
Spending 18 (2018), https://www.urban.org/sites/default/files/
publication/96781/stld_draft_0226_finalized_0.pdf.
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H.R. 1010 will protect consumers by reversing the Trump
Administration's harmful rule
H.R. 1010 would undo the Trump Administration's harmful
2018 rule that has expanded STLDI. The legislation would
restore the treatment of these plans to their appropriate role
as temporary insurance to fill an unexpected gap in coverage.
It would also prevent consumers from being exposed to a future
expansion of these harmful policies by ensuring that the
Departments do not promulgate a substantially similar rule in
the future.
Conclusion
H.R. 1010 protects consumers from being denied coverage for
a preexisting condition. By repealing the 2018 STLDI rule
submitted by the U.S. Department of the Treasury, the U.S.
Department of Labor, and the U.S. Department of Health and
Human Services, H.R. 1010 helps protect Americans from heath
care plans that arbitrarily limit coverage, lack consumer
protections for preexisting conditions, and allow for
discrimination.
SECTION-BY-SECTION ANALYSIS
Section 1: States that the U.S. Department of the Treasury,
the U.S. Department of Labor, and the U.S. Department of Health
and Human Services may not take any action to implement,
enforce, or otherwise give effect to the ``Short-Term, Limited-
Duration Insurance'' rule. It would further provide that the
Departments may not promulgate any substantially similar rule
in the future.
EXPLANATION OF AMENDMENTS
The amendments offered during the Committee markup of H.R.
1010 are explained in the descriptive portions of this report.
APPLICATION OF LAW TO THE LEGISLATIVE BRANCH
H.R. 1010 does not apply to terms and conditions of
employment or to access to public services or accommodations
within the legislative branch.
UNFUNDED MANDATE STATEMENT
Pursuant to Section 423 of the Congressional Budget and
Impoundment Control Act (as amended by Section 101(a)(2) of the
Unfunded Mandates Reform Act, Pub. L. 104-4), H.R. 1010
contains no unfunded mandates. The Committee adopts as its own
the estimate of federal mandates regarding H.R. 1010, prepared
by the Director of the Congressional Budget Office.
EARMARK STATEMENT
In accordance with clause 9 of rule XXI of the Rules of the
House of Representatives, H.R. 1010 does not contain any
congressional earmarks, limited tax benefits, or limited tariff
benefits as described in clauses 9(e), 9(f), and 9(g) of rule
XXI.
ROLL CALL VOTES
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
following roll call votes occurred during the Committee's
consideration of H.R. 1010:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
STATEMENT OF PERFORMANCE GOALS AND OBJECTIVES
Pursuant to clause (3)(c) of rule XIII of the Rules of the
House of Representatives, the goals of H.R. 1010 are to protect
Americans' access to affordable and comprehensive health
insurance and preserve consumer protections in health coverage.
DUPLICATION OF FEDERAL PROGRAMS
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, the Committee states that no
provision of H.R. 1010 establishes or reauthorizes a program of
the Federal Government known to be duplicative of another
federal program, a program that was included in any report from
the Government Accountability Office to Congress pursuant to
section 21 of Public Law 111-139, or a program related to a
program identified in the most recent Catalog of Federal
Domestic Assistance.
HEARINGS
Pursuant to section 103(i) of H. Res. 6 for the 116th
Congress, the Committee held a legislative hearing entitled
``Examining Threats to Workers with Preexisting Conditions,''
which was used to consider H.R. 1010. The Committee heard
testimony on the threats posed by short-term, limited duration
health plans to workers with preexisting conditions, including
discrimination, higher costs, exclusions on coverage, and
financial burden, among other issues. Witnesses included: Dr.
Rahul Gupta, Senior Vice President and Chief Medical Health
Officer, March of Dimes, Arlington, VA; Ms. Grace Marie Turner,
President, Galen Institute, Paeonian Springs, VA; Ms. Sabrina
Corlette, Research Professor, Georgetown University Health
Policy Institute Center on Health Insurance Reforms,
Washington, D.C.; and Mr. Chad Riedy, patient advocate living
with Cystic Fibrosis, Alexandria, VA.
STATEMENT OF OVERSIGHT FINDINGS AND RECOMMENDATIONS OF THE COMMITTEE
In compliance with clause 3(c)(1) of rule XIII and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the Committee's oversight findings and recommendations are
reflected in the descriptive portions of this report.
NEW BUDGET AUTHORITY AND CBO COST ESTIMATE
Pursuant to clause 3(c)(2) of rule XIII of the Rules of the
House of Representatives and section 308(a) of the
Congressional Budget Act of 1974, and pursuant to clause
3(c)(3) of rule XIII of the Rules of the House of
Representatives and section 402 of the Congressional Budget Act
of 1974, the Committee has received the following estimate for
H.R. 1010 from the Director of the Congressional Budget Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, April 29, 2019.
Hon. Bobby Scott,
Chairman, Committee on Education and Labor,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1010, a bill to
provide that the rule entitled ``Short-Term, Limited Duration
Insurance'' shall have no force or effect.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Alice Burns
and Kevin McNellis.
Sincerely,
Keith Hall,
Director.
Enclosure.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
H.R. 1010 would prevent the Administration from
implementing or enforcing a recent regulation aimed at
increasing the number of people with short-term limited
duration insurance (short-term plans) and would prohibit the
Administration from promulgating similar regulations in the
future.
CBO and JCT estimate that enacting the legislation would
result in roughly 1.5 million fewer people purchasing short-
term plans each year over the 2020-2029 period. Of those, more
than 500,000 would instead purchase nongroup coverage through
the marketplaces established by the Affordable Care Act, a
small number would obtain coverage through an employer, and
about 500,000 would become uninsured. The agencies expect that
additional enrollees in the nongroup market would have the
effect of lowering nongroup premiums by about 1 percent on
average because those enrollees are likely to be healthier than
the average nongroup enrollee under current law.
On net, CBO and JCT estimate that enacting H.R. 1010 would
decrease the deficit by $8.9 billion over the 2019-2029 period
primarily because premiums for subsidized nongroup insurance
would be lower. That amount includes a $7.8 billion reduction
in direct spending and a $1.1 billion increase in revenues.
H.R. 1010 would impose a private-sector mandate as defined
in the Unfunded Mandates Reform Act (UMRA) by restricting the
terms under which insurers may offer short-term plans. CBO
estimates the cost of the mandate, which would include the
revenue lost as a result of the restriction, would exceed the
private-sector threshold established by UMRA in each of the
first five years the mandate is in effect ($164 million in
2019, adjusted annually for inflation).
Details of the estimated budgetary effects of H.R. 1010 are
shown in Table 1. The costs of the legislation fall within
budget function 550 (health).
TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF H.R. 1010
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By fiscal year, millions of dollars--
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2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2019-2024 2019-2029
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Decreases in Direct Spending
Estimated Budget Authority..................................... 0 -289 -632 -746 -738 -806 -883 -873 -895 -928 -963 -3,211 -7,753
Estimated Outlays.............................................. 0 -289 -632 -746 -738 -806 -883 -873 -895 -928 -963 -3,211 -7,753
Increases in Revenues
Estimated Revenues............................................. 0 33 74 91 96 114 109 144 149 160 132 409 1,103
On-Budget.................................................. 0 0 9 20 31 37 35 43 41 48 30 98 295
Off-Budget................................................. 0 33 66 70 64 77 74 101 108 112 103 310 808
Decrease in the Deficit From Changes in Direct Spending and Revenues
Effect on the Deficit.......................................... 0 -322 -706 -837 -834 -920 -992 -1,017 -1,044 -1,088 -1,095 -3,619 -8,856
On-Budget.................................................. 0 -289 -641 -767 -770 -843 -918 -916 -936 -976 -992 -3,309 -8,048
Off-Budget................................................. 0 -33 -66 -70 -64 -77 -74 -101 -108 -112 -103 -310 -808
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Components may not sum to totals because of rounding. All off-budget effects would come from changes in Social Security revenues.
Sources: Congressional Budget Office; staff of the Joint Committee on Taxation.
On April 25, 2019, CBO issued a cost estimate for H.R.
1010, a bill to provide that the rule entitled ``Short-Term,
Limited Duration Insurance'' shall have no force or effect, as
ordered reported by the House Committee on Energy and Commerce
on April 3, 2019. The two pieces of legislation are identical
and CBO's estimate of their budgetary effects are the same.
The CBO staff contacts for this estimate are Kevin McNellis
and Alice Burns (for federal costs) and Andrew Laughlin (for
mandates). The estimate was reviewed by Leo Lex, Deputy
Assistant Director for Budget Analysis.
COMMITTEE COST ESTIMATE
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 1010.
However, clause 3(d)(2)(B) of that rule provides that this
requirement does not apply when the committee has included in
its report a timely submitted cost estimate of the bill
prepared by the Director of the Congressional Budget Office
under section 402 of the Congressional Budget Act.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
The bill does not change existing law for purposes of
clause 3(e) of rule XIII of the Rules of the House of
Representatives.
MINORITY VIEWS
INTRODUCTION
Committee Republicans have consistently promoted and
supported policies to lower costs and improve competition in
health care including Trump administration initiatives to
expand access to Association Health Plans (AHPs), Short-Term
Limited Duration Insurance Plans (STLDI), and Health
Reimbursement Arrangements (HRAs). Committee Republicans agree
with the Trump administration that the STLDI final rule
provides additional and significant options for individuals
struggling to afford insurance coverage.
Legislative History and Regulatory Definitions
STLDI is designed for short-term coverage, and federal
statutes have recognized the importance of making short-term
options available to health care consumers for over 20 years.
Because it is designed to fill coverage gaps, STLDI is
deliberately excluded from the definition of ``individual
health insurance coverage'' included in the Public Health
Service Act (PHSA) as amended by the Health Insurance
Portability and Accountability Act of 1996 (HIPAA). The
Affordable Care Act (ACA) used the same definition, cross-
referencing the PHSA. This exemption from the definition of
``individual health insurance coverage'' means that plans do
not have to comply with federal requirements for health
insurance, including rules under the ACA. As a result, these
short-term plans can offer coverage at significantly lower
prices for consumers in transition.
Since the Clinton administration, STLDI was defined through
regulation as health insurance coverage that expires less than
12 months after the original effective date. In October 2016,
the Department of Labor (DOL), Department of the Treasury
(Treasury), and Department of Health and Human Services (HHS)
under the Obama administration published a final rule that
restricted STLDI to less than three months, effective January
1, 2017.\1\ Instead of working to make health care more
affordable, the previous administration, in the final weeks of
President Obama's term, used a last-minute ploy to decrease
affordable options by limiting the length of time a consumer
could maintain STLDI coverage.
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\1\Excepted Benefits; Lifetime and Annual Limits; and Short-Term
Limited Duration Insurance, 81 Fed. Reg. 75,316 (Oct. 31, 2016).
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Trump Administration Actions
On October 12, 2017, President Trump signed an executive
order (EO) focused on expanding access to insurance options,
including selling insurance across state lines.\2\ The EO
directed DOL, HHS, and Treasury to issue new guidance and
review existing regulations to allow more regulatory
flexibility for AHPs, STLDI, and HRAs.
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\2\Exec. Order No. 13,813, 82 Fed. Reg. 48,385 (Oct. 17, 2017).
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In consultation with DOL and Treasury, HHS revised the
Obama administration regulations limiting STLDI by allowing
plans to be available to consumers for up to 364 days and
renewable for up to 36 months.\3\ Even though federal
regulations allow this duration and renewability, Democrats
refuse to acknowledge that states are still able to issue and
apply their own laws and requirements regarding STLDI,
including restricting their sale or requiring STLDI to cover
specific benefits. Restricting the allowable duration of STLDI
in this manner eliminates access to short-term coverage for
consumers that need it.
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\3\Short-Term, Limited-Duration Insurance, 83 Fed. Reg. 38,212
(Aug. 3, 2018).
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H.R. 1010: Legislation Which Eliminates Affordable Options for
Consumers
Historically, health insurance coverage on the ACA Exchange
(Exchange) has been very difficult for many consumers to
afford. According to data from the Center for Medicare and
Medicaid Services (CMS), after the ACA regulations took effect
in 2014, average individual market premiums more than doubled
from $2,784 per year in 2013 on HealthCare.gov to $5,712 on
HealthCare.gov, an increase of $2,928 or 105 percent.\4\ In the
HealthCare.gov states, between 2017 and 2018, the average
premium increased by 37 percent, and between 2016 and 2017, the
hike in average premiums was 25 percent.\5\ In October 2018,
CMS announced that thanks to immediate actions taken by the
Trump administration, the average premium for individual market
plans dropped by 1.5 percent, the first time that average
premiums dropped since the implementation of the federally-
facilitated Exchange in 2014.\6\
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\4\Centers For Medicare And Medicaid Serv., Premiums on the
Federally-Facilitated Exchanges Drop in 2019 (Oct. 11, 2018).
\5\Id.
\6\Id.
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Market participation has also been a longstanding concern
for the Exchange. From 2016 to 2017 alone, the number of
insurance carriers offering plans on the Exchange decreased by
nearly 30 percent.\7\ In 2018, 56 percent of U.S. counties on
the federal platform had only one issuer offering coverage,
while in 2019, after the Trump administration's market
stabilization efforts, the number of counties with one issuer
dropped to 39 percent.\8\
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\7\Id.
\8\Id.
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STLDI plans, which would be prohibited by H.R. 1010, can
represent more affordable, attractive options for individuals
who are between jobs or cannot afford ACA coverage. In
testimony to the House Committee on Energy and Commerce, Grace-
Marie Turner of the Galen Institute discussed the different
circumstances where STLDI may benefit consumers:
Short-term plans are helpful to people with gaps in
employment, to early retirees who no longer have
employer-sponsored health insurance and need bridge
coverage before they qualify for Medicare, people
between jobs, young people who no longer have coverage
from their parents and are working in the gig economy,
people who are leaving the workforce temporarily to
attend school or training programs, and entrepreneurs
starting new businesses. Premiums for short-term health
plans typically are less than half those of ACA plans.
The administration's rule also extended consumer
protections. Under the Obama administration's previous
2016 rule, people could lose their coverage after three
months if they acquired a medical condition during the
three-month period. By extending the contract period,
people can be protected from a period of uninsurance
until the next ACA open enrollment period.\9\
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\9\Strengthening Our Health Care System: Legislation to Reverse ACA
Sabotage and Ensure Pre-Existing Conditions Protections: Hearing on
H.R. 986, H.R. 987, H.R. 1010, and H.R. 1143 Before the Subcomm. on
Health of the H. Comm. on Energy and Commerce, 116th Cong. (2019)
(statement of Grace-Marie Turner, President, Galen Institute).
The Trump administration and HHS Secretary Alex Azar have
stated that expanding STLDI will help people struggling to
afford ACA coverage while still providing robust disclosure so
that consumers know what benefits are covered under a STLDI
policy. According to CMS, ``[i]n the fourth quarter of 2016, a
short-term, limited-duration policy cost approximately $124 a
month compared to $393 for an unsubsidized ACA-compliant
plan.''\10\ The administration projected roughly 100,000 to
200,000 individuals would move from ACA-compliant plans to
STLDI in 2019.\11\
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\10\Centers for Medicare and Medicaid Serv., Fact Sheet: Short-
Term, Limited-Duration Insurance Proposed Rule (Feb. 20, 2018).
\11\Id.
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H.R. 1010 Does Not Improve Employer-Sponsored Coverage
The Committee on Education and Labor has jurisdiction over
the Employee Retirement Income Security Act (ERISA) and,
therefore, jurisdiction over legislation and regulations
affecting employer-provided health coverage. Approximately 152
million Americans receive their coverage from an employer-
provided plan, the single largest source of health care
coverage in the country.\12\
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\12\Kaiser Family Found., Employer Health Benefits Annual Survey
(Oct. 2018).
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Notably, H.R. 1010 does not affect employer-sponsored
coverage, and this Committee does not have jurisdiction over
the statute (PHSA) that exempts STLDI from the definition of
individual health insurance. Republican Leader Virginia Foxx
(R-NC) noted this in her opening statement:
This Committee has jurisdiction over employer-
sponsored health care. Our focus should be on improving
those options. Rather than focus on this priority, we
are here today to consider H.R. 1010, which would
eliminate short-term limited duration insurance plans.
These plans are an obvious potential solution for
millions of Americans, working or not, who may find
themselves between jobs, or unable to afford rising
premiums in the already expensive individual
market.\13\
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\13\H.R. 1010, To provide that the rule entitled ``Short-Term,
Limited Duration Insurance'' shall have no force or effect: Markup
Before the H. Comm. on Educ. and Labor, 116th Cong. (2019) (statement
of Virginia Foxx, Republican Leader, Committee on Education and Labor).
Republican Leader Foxx also noted that this bill does
nothing to address the main concerns of millions of hardworking
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Americans:
H.R. 1010 is a one-sentence bill that will not lower
drug prices, will not protect anyone from surprise
billing, will not lower premiums, will not cut any out-
of-pocket costs, and will not provide one cent of tax
relief. Its failure to achieve any of those objectives
makes it simply unacceptable to us as Republicans.\14\
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\14\Id.
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H.R. 1010 Ignores Existing State and Federal Regulatory Authority
H.R. 1010 invalidates the Trump administration's STLDI plan
rule and prohibits the Secretaries of HHS, DOL, and Treasury
from promulgating any substantially similar rules. Since 1996,
Congress has chosen to deliberately exclude STLDI from the
definition of ``individual health insurance'' included in
HIPAA, the PHSA, and the ACA. Therefore, the Departments are
within their authority to issue regulations defining STLDI, and
should continue to propose regulations, such as the STLDI final
rule, which promote affordability, flexibility, and market
competition for consumers seeking health coverage.
Additionally, under the Trump administration's STLDI rule,
and under previous rules, states maintain the ability to
prohibit or restrict sales or determine whether these policies
should include certain benefits or services. Some states, such
as New Jersey and California, have chosen to prohibit the sale
of STLDI plans. Since states are the primary regulators of
insurance markets, they make decisions based on the specific
and varied needs of consumers in their state and local
jurisdictions. States should continue to be allowed to regulate
STLDI plans and their insurance markets in ways they see fit,
but H.R. 1010 seeks to eliminate this state authority and
market choice.
REPUBLICAN AMENDMENTS
H.R. 1010 takes away affordable options for Americans
struggling to afford health insurance coverage under the ACA.
In an attempt to preserve the STLDI rule, Republican Committee
members offered the following amendments.
Representative Phil Roe (R-TN) questioned the Committee's
motivation for spending time to debate an issue where the
Committee has no jurisdiction over the underlying statute. He
offered an amendment to codify the STLDI rule and allow for
guaranteed renewability. The amendment was ruled by the
Chairman to be not germane which underscored the fact that this
Committee's consideration of H.R. 1010 is a political ploy to
shield the costly, rigid plans offered under the ACA from
competition while eliminating additional choice and flexible
options that offer Americans the level of coverage they want at
rates they can afford.
Representative Dusty Johnson (R-SD) offered an amendment to
add a section to H.R. 1010 to allow states to use the STLDI
final rule's definition if they choose. Republicans embrace the
principle of federalism and respect the judgment of state
lawmakers and authorities similarly elected by the people to
act in their state's best interest. What works best for one
state may not be the best approach for others. Democrats
disagreed with allowing the states this freedom and further
demonstrated their desire to eliminate affordable options in
favor of one-size-fits-all government-mandated coverage by
defeating the amendment by a vote of 19-25.
Representative Tim Walberg (R-MI) offered an amendment that
would require the Secretaries of HHS, DOL, and Treasury to
conduct a study to determine whether consumers who are
considering purchasing an STLDI plan are provided with adequate
information on coverage exclusions and premium variations in
marketing resources, consumer application, and enrollment
materials. STLDI coverage is one option for consumers
struggling to afford ACA coverage and Republicans support
affordable choices but also want to ensure that consumers have
adequate information when purchasing STLDI. Under the Walberg
amendment, if the study finds that these materials do not
provide sufficient consumer information on these plans, H.R.
1010 would take effect in 90 days. Otherwise, if the study
finds consumer information is sufficient, H.R. 1010 would not
go into effect. Despite claims from Democrats that consumers do
not have enough information to make informed choices, the
amendment was defeated by a vote of 19-26.
Representative Ron Wright (R-TX) offered an amendment that
allows the sale of STLDI in counties where the average Exchange
benchmark premium increased by 20 percent or more in a year.
Health care costs are one of the top areas of concern for
American families, and this is especially true for consumers
purchasing coverage on the individual market. If consumers are
faced with double digit premium increases, affordable and
flexible plan options should be preserved. Although the Wright
amendment preserves choice and recognizes that consumers have
unique needs and want more affordable coverage, Democrats
defeated it by a vote of 19-26.
Representative William Timmons (R-SC) offered an amendment
to allow the sale of STLDI in counties where fewer than two
issuers offer coverage on the Exchange. Cost is not the only
concern for American families as many consumers who purchase
Exchange coverage often have few plan options. Although the
Timmons amendment preserves choice in places that need it most,
Democrats defeated it by a vote of 19-26.
CONCLUSION
H.R. 1010 eliminates affordable and flexible options for
Americans struggling to find health insurance coverage for
themselves and their families at a time when they need options
most. H.R. 1010 reduces consumer choice, does not improve
employer-sponsored coverage, and fails to respect federalism
and the role of state and federal regulatory authority. H.R.
1010 also attacks policies issued under a statute which is not
in the jurisdiction of this Committee. For these reasons and
those outlined above, Committee Republicans strongly oppose
enactment of H.R. 1010 as reported by the Committee on
Education and Labor.
Virginia Foxx,
Ranking Member.
David P. Roe.
Glenn ``GT'' Thompson.
Tim Walberg.
Brett Guthrie.
Bradley Byrne.
Glenn Grothman.
Elise M. Stefanik.
Rick W. Allen.
Francis Rooney.
Lloyd Smucker.
Jim Banks.
Mark Walker.
James Comer.
Ben Cline.
Russ Fulcher.
Van Taylor.
Steven C. Watkins, Jr.
Ron Wright.
Daniel Meuser,
William R. Timmons IV.
Dusty Johnson.
[all]
