[House Report 116-43]
[From the U.S. Government Publishing Office]
116th Congress } { Rept. 116-43
HOUSE OF REPRESENTATIVES
1st Session } { Part 2
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PROVIDING THAT THE RULE ENTITLED ``SHORT-TERM, LIMITED DURATION
INSURANCE'' SHALL HAVE NO FORCE OR EFFECT
_______
May 10, 2019.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Pallone, from the Committee on Energy and Commerce, submitted the
following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 1010]
[Including cost estimate of the Congressional Budget Office]
The Committee on Energy and Commerce, 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
I. Purpose and Summary.............................................2
II. Background and Need for the Legislation.........................2
III. Committee Hearings..............................................3
IV. Committee Consideration.........................................3
V. Committee Votes.................................................3
VI. Oversight Findings..............................................5
VII. New Budget Authority, Entitlement Authority, and Tax Expenditure5
VIII. Congressional Budget Office Estimate............................5
IX. Federal Mandates Statement......................................8
X. Statement of General Performance Goals and Objectives...........8
XI. Duplication of Federal Programs.................................8
XII. Committee Cost Estimate.........................................8
XIII. Earmarks, Limited Tax Benefits, and Limited Tariff Benefits.....8
XIV. Advisory Committee Statement....................................8
XV. Applicability to Legislative Branch.............................8
XVI. Section-by-Section Analysis of the Legislation..................8
XVII. Changes in Existing Law Made by the Bill, as Reported...........8
XVIII.Dissenting Views................................................9
PURPOSE AND SUMMARY
H.R. 1010, a bill to provide that the rule entitled `Short-
Term, Limited-Duration Insurance' shall have no force or
effect, was introduced on February 6, 2019, by Reps. Castor (D-
FL), Barragan (D-CA), Horsford (D-NV), Moore (D-WI), Underwood
(D-IL), and DeSaulnier (D-CA), and referred to the Committee on
Energy and Commerce.
The goal of H.R. 1010 is to prohibit the Department of
Health and Human Services (HHS), Department of Treasury (the
Treasury), and the Department of Labor (DOL) from taking any
action to implement, enforce, or otherwise give effect to the
Short-Term, Limited Duration Insurance (STLDI) final rule. The
bill would also prohibit the Secretaries of HHS, the Treasury,
and DOL from promulgating any substantially similar guidance or
rule.
BACKGROUND AND NEED FOR LEGISLATION
On August 3, 2018, HHS, the Treasury, and DOL issued the
STLDI final rule to expand the availability of STLDI plans.\1\
The final rule extended the maximum duration of STLDI plans
from 3 months to up to 12 months. The final rule allows
insurers to renew STLDI plans further for up to 36 months.
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\1\Department of Health and Human Services, Department of the
Treasury, and Department of Labor, Short-Term, Limited-Duration
Insurance, 83 Fed. Reg. 38212 (Aug. 03, 2018).
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STLDI plans are exempt from all of the consumer protection
provisions and benefit standards contained in Title I of the
ACA. These plans are exempt from the ACA's guaranteed
availability and renewability provisions, community rating, ban
on discrimination based on health status, and the prohibition
on pre-existing conditions exclusions. STLDI plans are also not
subject to the ACA's prohibition on annual and lifetime
coverage limits, and annual out-of-pocket limits. Lastly, STLDI
plans are not required to cover the ACA's ten categories of
essential health benefits, including prescription drugs,
hospitalization, maternity coverage, and mental health and
substance use disorder treatment.
The August 2018 final rule also allows STLDI plans to be
sold alongside insurance plans that comply with the ACA's
consumer protections contained in Title I. In the final rule,
HHS, DOL, and the Treasury all conclude that the policy changes
``could lead to further worsening of the risk pool by keeping
healthy individuals out of the individual market for longer
periods of time, increasing premiums for individual market
plans and may cause an increase in the number of individuals
who are uninsured.\2\ The final rule estimated that 200,000
individuals previously enrolled in the ACA marketplace coverage
will purchase STLDI instead in 2019, causing average individual
market premiums to increase. Other nonpartisan estimates,
including the Congressional Budget Office, projected a more
significant impact on the individual market.\3\
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\2\Id.
\3\Congressional Budget Office, How CBO and JCT Analyzed Coverage
Effects of New Rules for Association Health Plans and Short-Term Plans
(Jan. 2019) (https://www.cbo.gov/system/files?file=2019-01/54915-
New_Rules_for_AHPs_STPs.pdf).
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COMMITTEE HEARINGS
For the purposes of section 103(i) of H. Res. 6 of the
116th Congress, the following hearing was used to develop or
consider H.R. 1010:
On February 13, 2019, the Subcommittee on Health held a
hearing on H.R. 1010, entitled ``Strengthening Our Health Care
System: Legislation to Reverse ACA Sabotage and Ensure Pre-
Existing Conditions Protections.'' The Subcommittee received
testimony from the following witnesses:
Katie Keith, Associate Research Professor
and Adjunct Professor of Law, Georgetown University;
Jessica Altman, Commissioner, Pennsylvania
Insurance Department; and
Grace-Marie Turner, President, Galen
Institute.
COMMITTEE CONSIDERATION
H.R. 1010, a bill to provide that the rule entitled
``Short-Term, Limited Duration Insurance'' shall have no force
or effect, was introduced on February 6, 2019, by Rep. Castor
(D-FL), and referred to the Committee on Energy and Commerce.
The bill was subsequently referred to the Subcommittee on
Health on February 7, 2019. Following legislative hearings, the
Subcommittee met, pursuant to notice, on March 26, 2019, in
open markup session on H.R. 1010 for consideration of the bill.
Subsequently, the Subcommittee on Health agreed to a motion by
Ms. Eshoo, Chairwoman of the Subcommittee, to favorably forward
H.R. 1010 to the full Committee on Energy and Commerce, without
amendment.
The full Committee met in open markup session, pursuant to
notice, on April 3, 2019, to consider H.R. 1010. An amendment
by Mr. Johnson (R-OH) was defeated by a voice vote. At the
conclusion of consideration and markup of the bill, the
Committee on Energy and Commerce agreed to a motion by Mr.
Pallone, Chairman of the Committee, to order H.R. 1010
favorably reported to the House, as introduced, by a record
vote.
COMMITTEE VOTES
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list each record vote
on the motion to report legislation and amendments thereto. The
Committee advises that there was one record vote taken on H.R.
1010 on a motion by Mr. Pallone ordering H.R. 1010 favorably
reported to the House, as introduced. The motion on final
passage of the bill was approved by a record vote of 30 yeas to
22 nays. The following are the record votes taken during
Committee consideration, including the names of those members
voting for and against:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
OVERSIGHT FINDINGS
Pursuant to clause 3(c)(1) of rule XIII and clause 2(b)(1)
of rule X of the Rules of the House of Representatives, the
oversight findings and recommendations of the Committee are
reflected in the descriptive portion of the report.
NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY,
AND TAX EXPENDITURES
Pursuant to 3(c)(2) of rule XIII of the Rules of the House
of Representatives, the Committee adopts as its own the
estimate of new budget authority, entitlement authority, or tax
expenditures or revenues contained in the cost estimate
prepared by the Director of the Congressional Budget Office
pursuant to section 402 of the Congressional Budget Act of
1974.
CONGRESSIONAL BUDGET OFFICE ESTIMATE
With respect to the requirements of 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 cost estimate for H.R.
1010 from the Director of the Congressional Budget Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, April 25, 2019.
Hon. Frank Pallone, Jr.,
Chairman, Committee on Energy and Commerce,
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 1B963 -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.
The CBO staff contacts for this estimate are Kevin McNellis
and Alice Burns. The estimate was reviewed by Leo Lex, Deputy
Assistant Director for Budget Analysis.
FEDERAL MANDATES STATEMENT
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES
Pursuant to clause 3(c)(4) of rule XIII, the general
performance goal or objective of this legislation is to
overturn the STLDI final rule, giving it no force or effect,
and to prohibit the Secretaries of HHS, the Treasury, and DOL
from promulgating any substantially similar guidance or rule.
DUPLICATION OF FEDERAL PROGRAMS
Pursuant to clause 3(c)(5) of rule XIII, no provision of
H.R. 1010 is known to be duplicative of another Federal
program, including any program that was included in a report to
Congress pursuant to section 21 of Public Law 111-139 or the
most recent Catalog of Federal Domestic Assistance.
COMMITTEE COST ESTIMATE
Pursuant to clause 3(d)(1) of rule XIII, the Committee
adopts as its own the cost estimate prepared by the Director of
the Congressional Budget Office pursuant to section 402 of the
Congressional Budget Act of 1974.
EARMARKS, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS
Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the
Committee finds that H.R. 1010 contains no earmarks, limited
tax benefits, or limited tariff benefits.
ADVISORY COMMITTEE STATEMENT
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
APPLICABILITY TO LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION
Section 1. Short-term limited duration insurance rule prohibition
Section 1 prohibits the Secretaries of HHS, the Treasury,
and DOL from taking any action to implement, enforce, or
otherwise give effect to the STLDI final rule issued on August
3, 2018. Section 1 also prohibits the Secretaries from
promulgating any substantially similar rule or guidance.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
There are no changes to existing law made by the bill H.R.
1010.
DISSENTING VIEWS
This legislation would invalidate the Trump
Administration's short-term, limited-duration insurance (STLDI)
plan rule.
In coordination with the Department of Labor and the
Department of the Treasury, the Department of Health and Human
Services revised the Obama Administration regulations, which
limited STLDI plans to three months, by allowing the plans to
be available to consumers for up to 364 days and renewable up
to 36 months.\1\
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\1\26 C.F.R. Sec. 54; 29 C.F.R. Sec. 2590; 45 C.F.R. Sec. Sec. 144,
146, 148.
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The Trump Administration regulation aims to provide relief
from rising premiums and to expand access to affordable health
care plans. 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.''\2\ The Administration projected roughly 100,000 to
200,000 individuals would move from PPACA-compliant plans to
STLDI. These more affordable plans may be attractive options
for individuals who are between jobs, cannot afford Patient
Protection and Affordable Care Act (PPACA) coverage, or cannot
continue to see their doctor because they are out of network.
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\2\Centers for Medicare and Medicaid Services, Fact Sheet. Short-
Term, Limited-Duration Insurance Proposed Rule, (Feb. 20, 2018),
available at https://www.cms.govinewsroom/fact-sheets/fact-sheet-short-
term-limited-duration-insurance-proposed-rule.
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Although some Democratic members claim these plans are not
regulated, all States retain the authority to regulate these
plans. The invalidation of the Trump Administration regulation
that provides affordable plans will negatively impact
individuals who could otherwise utilize STLDI, further limit
consumer choice, and lead more Americans to face unmanageable
costs associated with ACA plans.
Greg Walden,
Republican Leader, Committee
on Energy and Commerce.
Michael Burgess, M.D.,
Republican Leader,
Subcommittee on Health,
Committee on Energy and
Commerce.
[all]