On Friday, March 24, the House Speaker Paul Ryan cancelled the planned vote on the American Health Care Act (AHCA), a bill the House Republicans introduced on March 6, 2017 that they hoped to send to President Trump for signature in a few short weeks. The bill would have repealed and replaced key provisions of the Affordable Care Act (ACA) and made significant changes to federal funding for Medicaid.
After weeks of discussion amongst Republicans, with many moderate and more conservative blocs of the party in disagreement about how to proceed, the most recent concessions added in over the last days of debate were unable to bring the two factions together for the final vote. The amendments that House leadership added last minute would have moved more power to the states to decide the essential health benefits package that worked best for their markets. It also would have allowed states to accept block grant or per-capita-cap funding for their Medicaid programs. Finally, it would have given additional funding to support mental health, maternity, newborn, and substance abuse coverage. The Congressional Budget Office (CBO) projected that the AHCA, as amended, would have reduced the federal deficit by $150 billion and increased the number of uninsured by 24 million by 2026.
Since the passage of the ACA in 2010, many Congressional Republicans have been promising to repeal the law, and President Trump said the day he was sworn into office that repealing and replacing the ACA would be one of his administration’s main priorities. Now that the AHCA has failed, much of official Washington spent the past weekend engaged in the blame game or in post-mortem analysis asking, “What happened?”
But many across the country and in the health care sectors are asking, “What happens now?”
At a health care presentation last week, I heard a commentator remark, “I am concerned if the repeal bill passes. But I am equally concerned if it does not.” That comment has stayed with me over the past few days. Why? Because the health care community is currently operating under the ACA and needs to understand what, if any, changes are to be expected. Stakeholders need to prepare for 2018 enrollment in relatively short order, and they are grappling with finding ways to keep individuals insured, boost the insurance markets, control premium growth, and continue their investments to improve the quality of care for their patients.
No one knows yet what, if any, agreements or changes to the ACA might emerge in the coming weeks with President Trump and Congress.
For now, the ACA is the law of the land with pressing annual deadlines. And other looming health issues will require attention by Congress and the regulators this year. Recent actions by President Trump, Secretary of the US Department of Health and Human Services (HHS) Tom Price, and recently confirmed Administrator of the US Centers for Medicare and Medicaid Services (CMS) Seema Verma may give us an idea of what the administration might do next.
For one, HHS could use its administrative powers to “reduce the burden” of the ACA on health care stakeholders. As one of the first moves after Secretary Tom Price was confirmed, HHS on February 15, 2017 released a proposed rule intended to provide health insurers greater certainty about the individual and small group markets in the 2018 benefit year under the ACA. Days later, a CMS division proposed providing plans with more time to file products for the federally-facilitated Exchanges in order to allow time to modify products in response to the proposed changes (see the February 20, 2017 Reg Pulse Blog). We may see additional rules issued in the coming weeks.
Secretary Price and Administrator Verma have also recently highlighted levers that states have to stabilize their markets. Earlier this month, they both sent a letter to governors saying they promise to remove barriers and give states more flexibility in the design of their Medicaid programs. They also said that HHS will conduct a full review of Medicaid managed care regulations (see the May 3, 2016 Health Care Current) and will delay enforcement of the Home and Community-Based Services rule. They said that CMS recommends states use Section 1115 waivers to encourage non-disabled adults to obtain and keep employment. For individual and small-group plans, HHS Secretary Tom Price sent a letter to governors saying they should use Section 1332 State Innovation waivers to slow premium growth and stabilize the markets. He held out as an example Alaska’s 1332 waiver request to fund a state-operated high-risk pool and reinsurance program.
Several pieces of “must pass” legislation are up this year, and they may be used as vehicles to pass additional changes to the ACA, especially if the repeal effort remains stalled. The Continuing Resolution passed by Congress in December 2016 expires on April 28, 2017. Congress will need to make critical decisions about federal funding for agencies and programs. One issue many health plans are keenly watching is whether Congress will step in and appropriate funds for the cost-sharing reduction subsidies for low-income individuals under the ACA, an issue that has been in debate in the courts. Congress will need to address reauthorization and funding for the Children’s Health Insurance Program (CHIP), which is set to expire in September this year. This program provides critical funding to the states for children’s health programs alongside Medicaid. Many state governors and providers are eager to see the program funded as soon as possible before September to assist them in their annual planning. For life sciences companies, the reauthorization of industry “user fees” to assist the approval processes at the US Food and Drug Administration (FDA) are also set to expire in September.
The administration and Congress have a lengthy list of health care issues that are still a priority. For one, we are nearly four months into the first performance year for the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Health care leaders should not mistake the federal government’s attention on repeal and replace as a sign that it is neglecting its efforts to move toward value-based care across the system. Moreover, throughout the debate of AHCA, several lawmakers called for a bipartisan effort to tackle one of the biggest spending drivers in our system today: health care costs. And if Congress decides to move forward with tax reform next, health care stakeholders may be wise to watch for tax changes to many health care related provisions such as premium assistance tax credits, health savings accounts, or the tax-favored treatment of employer-sponsored health care.
In the end, the legislative process to repeal and replace the ACA may be stalled, but the work of health care is never done. In many travels around the country, I have been encouraged by how many in the health care community remain resilient and operate with resolve in the midst of uncertainty. It is a good reminder of how much of our community’s and our own health care is still within our hands while we continue to watch Washington for what’s next.