AFFORDABLE CARE ACT: LEGAL & POLICY UPDATE (CKAHU - 9/13/16) Douglas L. McSwain WYATT, TARRANT & COMBS, LLP 250 W. Main Street, Ste. 1600 Lexington, KY 40507 (859) 288-7415 dmcswain@wyattfirm.com

U.S. House of Representatives v. Burwell Just another “Obamacare” lawsuit? Track record of suits so far But, who’s counting? What’s the dispute? “Standing” – separation of powers Exchange policies – legality of cost sharing subsidies Different from King v. Burwell

U.S. House of Representatives v. Burwell Where’s the case now? District Court rulings DC Circuit Court appeal SCOTUS? What’s the implications? Americans affected – 5-6M Exchange market impact (premiums, carriers, federal budgetary) Ct. of claims lawsuits?

WHAT’S HAPPENING WITH THE ………….. CO-OPs? X∆ MARKETS? 23 Risk Corridor Program Exchange customer risk pool – multiple factors impacting Employer mandate success - “and then there were none” (but not quite 0 yet) See CBO Charts – next slide

Note: Figures are for non-Medicare pop. & incl. unauthorized persons; Due to rounding and estimations, figures may not sum to 100%

WHAT’S HAPPENING WITH THE X∆ MARKETS? ………….. Exchange customer risk pool – multiple factors impacting Employer mandate success Irony of premium subsidies Enrollment abuses Special enrollment periods (SEPs) Certain 3rd party purchases Individual penalty – severity & exemptions “Value” of exchange plans Deductibles/co-pays Networks – “is my doctor in it” – cost if not Plan choice (insurer exits) Premiums – will the feds regulate?

THOSE “PESKY” LAWSUITS The CO-OPs “strike back”! Guess who’s joining them? Breaking News Flash! See Next Slide

Re: RISK CORRIDOR PROGRAM CMS’ 9/9/16 ANNOUNCEMENT Re: RISK CORRIDOR PROGRAM “. . . HHS will explore other sources of funding for risk corridors payments, subject to the availability of [congressional] appropriations. . . . HHS recognizes that the [ACA] requires the Secretary to make full payments to issuers. HHS will record risk corridors payments due as an obligation of the United States Government for which full payment is required. We know that a number of issuers have sued in federal court seeking to obtain the risk corridors amounts. . . . As in any lawsuit, the [DOJ] is vigorously defending those claims. . . . However, as in all cases where there is litigation risk, we are open to discussing resolution of those claims. We are willing to begin such discussions at any time.” CMS News Bulletin issued 9/9/16.

THOSE “PESKY” LAWSUITS The CO-OPs “strike back”! Central United Life v. Burwell (7/16) “What’s it all about, Alfie”? Standalone fixed indemnity plan prohibition But, is it really “Out”? Out!

“Obamacare” SUCCESS? FAILURE? G O P D E M Dem Proposals President’s Hillary’s Fix it! GOP Proposals Speaker Ryan’s “The Donald’s” Repeal & Replace it!

Attempts will (must) be tried to “Fix it” Repeal unlikely - Alternatives 2 disruptive

PREDICTIONS Medicaid Medicare Public Option Insurance Markets for what they’re worth - Medicaid Medicare Public Option Insurance Markets Care Delivery M & As

QUESTIONS?