Hearings on PPACA Provisions, Competition and Consolidation

Last Friday, the House Judiciary Subcommittee on Intellectual Property, Competition, and the Internet heard testimony on how the PPACA will affect health insurance competition. Witnesses from the Heritage Foundation and AEI testified that PPACA provisions, such as the minimum medical loss ratio rules, may lead to less competition in the health insurance marketplace and result in further consolidation of the industry. Another witness, the Director of the Center for Health Law Studies at Saint Louis University School of Law in Missouri, testified that a number of PPACA reforms will increase market competition, such as the establishment of accountable care organizations (ACO’s) and state-based health insurance exchanges.

Rep. Lamar Smith (R-TX) said that PPACA overregulation will benefit only the largest incumbent companies and the status quo. In general, several witnesses testified that a new health care delivery system is evolving in which health plans and providers are increasing their collaboration, focusing on improving health care quality and using health information technology. They said that PPACA accountable care organizations, medical homes and disease prevention measures may be key in transforming the current health care delivery system.

A recording of this hearing can be found here.

IRS Issues Rules on PPACA Tax Credits

The IRS issued final rules on the PPACA health insurance premium tax credits available in health insurance exchanges. However, the agency left open the definition of tax credit availability when an employer’s plan is found to offer coverage that is not “affordable.” Further guidance on affordability, minimum plan value and dependent eligibility will have to be made before the credits become available in 2014. Previous proposed regulations tied the issue of “affordability” under an employer plan based solely on individual coverage (i.e. 9.5% of household income, the required contribution percentage for 2014 under the PPACA).