The Obama administration has decided that key elements of Affordable Care Act will not be categorized as “federal health care programs.” That decision was announced in a letter that Health and Human Services secretary Kathleen Sebelius sent to Congress. The New York Times reports that by not granting the ACA that type of classification, it is exempt from an important law used to fight fraud in programs such as Medicare.
Aspects of the ACA, such as the law’s federal subsidies and both the federal and state exchanges, will not be subject to bans on kickbacks, bribes, rebates, and “certain other financial arrangements,” according to the Times. One former official with HHS cautioned that the administration’s decision “will have some very significant consequences.”
For example, by exempting the ACA, an industry executive warned, drug companies could give people coupons to buy insurance plans on the exchanges, which would “steer consumers away from lower-cost alternatives to more expensive drugs, increasing costs to insurers and to the government.”
A federal court could reverse the administration’s decision.