NACo, Trump Speech, ACA, WOTUS, PILT
Federal Issues Update
NACo Legislative Conference
More than 100 California county officials were in Washington, D.C. this past week for the National Association of Counties’ (NACo) annual legislative conference. The event brings together over 2,000 local elected and appointed officials from across the country.
For its part, CSAC sent to the nation’s capital its full slate of elected officers and top staff to lobby members of the new 115th Congress. Led by Alameda County Supervisor and CSAC President Keith Carson, association representatives primarily focused their advocacy efforts on Medicaid and the Affordable Care Act (ACA). With Republican lawmakers beginning to push forward in earnest a healthcare reform bill (see section below for more details), CSAC leaders met with various members of the state’s congressional delegation to discuss what a Medicaid/ACA restructuring bill would mean to California’s counties.
CSAC also hosted its 11th annual congressional breakfast on Capitol Hill. The event featured presentations by the following members of the California delegation: Democratic Representatives Tony Cárdenas, Ro Khanna, and Barbara Lee and Republican Representatives Dana Rohrabacher and Jeff Denham. The lawmakers spoke to county officials on a wide variety of issues, including healthcare, cannabis policy, water resources, infrastructure spending, and immigration.
Additionally, CSAC officers met with the offices of Senators Dianne Feinstein (D-CA) and Kamala Harris (D-CA), as well as several key members of the House Energy and Commerce Committee, the panel with jurisdiction over the Medicaid program. In their meetings, CSAC leaders described the progress California’s counties have made in providing healthcare coverage. Since passage of the ACA, the state’s uninsured rate has been cut in half, with over 91 percent of all Californians now insured, including 3.7 million more individuals who are covered under Medicaid. Within those numbers, the state’s more rural counties have seen the largest proportional increase in Medicaid coverage.
California’s county officials also conveyed to lawmakers that a Medicaid block grant or per-capita cap would financially disadvantage California due to the state’s historically low per-beneficiary spending rate. Given the cost efficiencies the state has achieved through managed care and its low provider reimbursement rates, the state would be locked into a low federal payment under a capped federal program.
Trump Addresses Joint Session of Congress, Nation
On February 28, President Trump delivered his first speech before a joint session of Congress, in which he broadly outlined an ambitious to-do list for his inaugural year in office. Among other things, the president called on Congress to repeal and replace the ACA, invest $1 trillion in the nation’s infrastructure, and lower the corporate tax rate. As is customary, members of the president’s party interrupted the speech dozens of times with standing ovations, while the opposition remained seated for large portions of the address.
With regard to the ACA, President Trump urged lawmakers to embrace a GOP proposal that expands the use of tax credits and health savings accounts to provide Americans with access to health care. He also indicated that states should be given “the resources and flexibility they need with Medicaid to make sure no one is left out.” In addition, Trump expressed his support for medical tort reform, lowering the cost of prescription drugs, and allowing insurers to provide coverage across state lines.
Legislative Update: Affordable Care Act
Although House Republican leaders have yet to introduce a formal ACA repeal and replacement measure, an unofficial health reform bill that was leaked this past week provides an indication of the policy direction the GOP intends to move. It should be noted that since the draft legislation was leaked, Republican sources have cautioned that the proposal remains fluid and will likely be modified.
Under the 106-page draft, the financial underpinnings of the ACA would be entirely repealed and replaced with a tax on those employer group health plans that exceed the 90th percentile of all group plan annual premiums. Such an approach appears to affect a broader array of health plans than the ACA’s so-called “Cadillac tax,” which imposes a 40 percent excise tax on the costs of high-value plans. Given widespread opposition to the ACA excise tax, a bipartisan vote in Congress delayed its implementation to 2020.
The GOP draft bill also would end enhanced federal funding that has been utilized by California and 30 other states to expand healthcare coverage under the ACA. Additionally, the measure would eliminate subsidies used by lower-to-middle income families to purchase private health insurance offered through the Covered California marketplace. Furthermore, the bill would terminate the Prevention and Public Health Fund, which helps local health departments fight communicable diseases and address other community health needs.
In place of the ACA’s income-based subsidies, the GOP draft would create a system of tax credits that individuals could use to purchase health insurance. The credits would be based on age and would operate on a sliding scale (ranging from $2,000 for individuals under the age of 30 and up to $4,000 for people who are 60-64). The bill also would increase the amount of funds people could put in Health Savings Accounts.
With regard to Medicaid, the draft legislation would impose a per-capita cap on federal Medicaid spending. Under the bill, states would be given a Medicaid allocation based on their spending on a per-person basis with different amounts for women and children, persons with disabilities, those in long-term care, and those in the ACA expansion category. The Congressional Budget Office has analyzed similar approaches in the past and has found that the federal contribution to Medicaid under such proposals would be reduced by 25 percent in a relatively short period of time.
While the draft legislation would not repeal the ACA’s Medicaid expansion for low-income adults, it would eliminate the enhanced federal match for new enrollees beginning in 2020.
In other health-policy developments, CSAC President Keith Carson offered a resolution at the aforementioned NACo conference in support of Medicaid’s long-standing federal, state, and county partnership. The resolution also expresses the association’s support for continued ACA funding, which has extended health coverage to over 20 million individuals nationwide.
The CSAC resolution – which was jointly spearheaded by Cook County, IL, NACo’s human services and behavioral health affiliates, and counties from other states – signals support for the current ACA expansion and urges any replacement package to maintain coverage for those individuals covered under current law. Ultimately adopted by the NACo Board, the policy also reiterates NACo’s opposition to any federal effort to cap the federal contribution to Medicaid, citing the inevitable cost shift to safety net counties.
President Signs Directive Revising WOTUS Rule
On February 28, President Trump signed a highly anticipated executive order instructing the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) to review the Obama administration’s controversial “Waters of the United States” (WOTUS) rule. Pursuant to the president’s order, the agencies are required to “publish for notice and comment a proposed rule rescinding or revising the [current] rule.”
The WOTUS regulation, finalized by EPA and the Corps in 2015, attempted to clarify which waterways and bodies of water are subject to federal oversight under the Clean Water Act. Criticized by state and local governments and a host of other stakeholders as an example of vast regulatory overreach, the Obama-era directive has been tied up in the courts since the Sixth Circuit Court of Appeals granted a nationwide stay of the rule in October 2015.
It should be noted that President Trump’s executive order explicitly directs the EPA and Corps to consider interpreting the term “navigable waters” in a manner consistent with the opinion of late-Supreme Court Justice Antonin Scalia in Rapanos v. United States. In Rapanos, Justice Scalia concluded that the phrase “waters of the United States” includes only those relatively permanent, standing, or continuously flowing bodies of water that form geographic features. Scalia further wrote that the term does not include channels through which water flows intermittently or ephemerally, or channels that periodically provide drainage for rainfall.
Looking ahead, it is unclear when the EPA and Corps will publish a revised WOTUS rule for notice and comment, though the process is expected to take several months.
This week, Representatives Paul Gosar (R-AZ) and Jared Polis (D-CO) began circulating two bipartisan “Dear Colleague” letters on the federal Payments-in-Lieu-of-Taxes (PILT) program. The letters – one addressed to the Office of Management and Budget and another to the House Appropriations Committee – urge full funding for PILT in the upcoming fiscal year.
Across Capitol Hill, Senators Mike Crapo (R-ID) and Michael Bennet (D-CO) are spearheading a similar letter to the Senate Appropriations Committee. CSAC strongly supports the two Gosar-Polis letters, as well as the Crapo-Bennet letter, and has been urging members of the California congressional delegation to sign on.