Last week’s news spent considerable time analyzing the new administration’s first 100 days, including questions about a renewed effort to repeal and replace elements of the Affordable Care Act (ACA).
Repealing and replacing the ACA has been a signature issue for Republican leaders for the past seven years. The American Health Care Act (AHCA), which failed to make it to a floor vote in March, was recently resurrected and was gaining traction with an amendment that would let states seek waivers to redefine key ACA provisions such as age-rating bands and essential health benefits. The latest iteration of the bill still needs to attract 216 yeas to prevail in a floor vote given the four current vacancies in the House. If it does, a big question will be whether it can pass the US Senate — even with the lower hurdle of 51 rather than 60 votes under special budget reconciliation rules.
Some industry observers appear optimistic that the administration and Congress will enact legislation this year that will repeal and replace the ACA. During an April 26 Dbriefs webinar on the administration’s first 100 days, more than half of our attendees said it was “highly likely” or “somewhat likely” that Republicans would make good on their promise to unravel the law. More than one-third, however, said it “wasn’t very likely.”
As the AHCA was creating a buzz on the Hill (again), the White House signaled that it would allow federal cost-sharing reduction subsidies to continue. At least for now. With about $7 billion in subsidies at stake, health plans had serious concerns that eliminating them would push premiums significantly higher for the 2018 plan year. It’s worth noting that the administration has made no guarantees that the subsidies will continue indefinitely.
The administration recently finalized other major changes designed to stabilize the exchanges. On April 13, 2017 the US Centers for Medicare and Medicaid Services (CMS) released a final rule aimed at stabilizing the insurance exchanges. Among other things, the new rules will make it more difficult for people to buy coverage outside of the open-enrollment period. It also shortens the next open-enrollment period by six weeks, from November 1, 2017 to December 15, 2017.
Administration offers states more control
To date, it seems the administration’s most significant policies have been around reducing regulation and delegating much more latitude to the states. During its first 100 days, the White House has nominated and received Senate confirmation for a number of key policymakers who appear to be agents of change, including US Department of Health and Human Services (HHS) Secretary Tom Price and CMS Administrator Seema Verma. Moreover, the White House has used its administrative and regulatory authorities to make progress on its health policy to-do list. The president’s first executive order, signed on January 20, called on federal agencies to roll back the regulatory burden of the ACA. Tangible results of this order can be seen in actions such as the Internal Revenue Service softening its enforcement of the ACA individual mandate.
Secretary Price and Administrator Verma have taken early steps in the direction of federalism. They are actively promoting the use of existing Medicaid and ACA statutory waiver authorities to shift discretion and flexibility from HHS and CMS to state governments. As my colleagues and I have noted in previous My Takes, federalism is the dominant theme in this administration’s health policy. This federalism is likely to be consequential across the public and private sectors, regardless of whether ACA repeal and replace efforts bear fruit.
We also have seen a progress in authorizing user-fee agreements between the FDA and the life sciences (pharmaceutical, biologic, and medical technology) organizations that pay them. The legislation largely follows the outlines of previous negotiations and should provide some certainty for the industry.
So what might we see coming ahead? We see a number of deadlines facing the Congress. July 28 is when we would ordinarily expect the August recess to begin. There has been discussion of trying to pass tax reform prior to Congress leaving town, although it is unclear whether this will be the case. At the end of September is another deadline forcing legislative action on health care – when funding for the Children’s Health Insurance Program (CHIP) ends. CHIP is popular with legislators on both sides of the aisle and with the states, but reauthorization may prove challenging if it gets caught up in a second wave of health reform legislation.
Finally, we will likely begin to see the new administration’s policy direction in regulatory activity. We will be tracking Medicare payment policy regulations that will likely provide more detail on implementation of the Medicare Access and CHIP Reauthorization Act of 2015, regulations implementing provisions of 21st Century Cures, and more pilots and demonstrations coming out of the Center for Medicare and Medicaid Innovation. Regardless of what happens on the legislative side, the administration will likely begin to make its mark on the many health programs it runs and regulates.