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Healthcare Triage News: The Senate’s BCRA Bill – High Premiums, Huge Deductibles, AND Massive Medicaid Cuts
GOP pessimism rising on ObamaCare repeal
Senate Republicans are returning to Washington increasingly pessimistic about their plan to repeal and replace ObamaCare.
They’ve had to put off plans for a vote next week, and they’ve seen loyal members either double down on their opposition to the bill, or at least question whether they will back it.
Sen. Jerry Moran (R-Kansas)—a “no” vote that took many in Washington by surprise—distanced himself the closed-door process used to draft the Senate bill.
“It takes two parties who want to come together. Not just Republicans. Not just Democrats,” he said during a polite, but pointed, meeting with constituents in rural Kansas.
Asked if he could support the bill, Sen. Chuck Grassley (R-Iowa) told constituents that “I don’t know if we’re even going to get a bill up,” according to the Des Moines Register.
Sen. John Hoeven (R-N.D.), who normally aligns with leadership, also came out as “no” over the recess break.
Even Senate Majority Leader Mitch McConnell (R-Ky.) appeared to suggest that Republicans might need to move to plan B involving stabilizing insurance markets if they can’t pass their bill.
“If my side is unable to agree on an adequate replacement, then some kind of action with regard to private health insurance markets must occur,” he said at a Rotary Club meeting in Kentucky.
The gloomy outlook highlights why McConnell had sought to finish work on the repeal-and-replace legislation before the July 4 recess.
McConnell didn’t want his members to face additional pressure over the break, and he also wasn’t keen on spending more time on healthcare. His conference now faces a marathon three-week session to take action on the issue.
The caucus remains deeply divided with rank-and-file members signaling they don’t believe they are close to a deal that could capture 50 votes.
“We’re still several weeks away from a vote, I think,” Sen. Pat Toomey (R-Pa.) said a televised Q & A event, while dozens of protesters urged him to oppose the Senate bill.
Moran added that there wasn’t “significant consensus” on how to fix healthcare.
“[It’s] almost impossible to try to solve when you’re trying to do it with 51 votes in the United States Senate, in which there is not significant consensus on what the end result ought to be,” he said.
Leadership held a flurry of closed-door negotiations before the recess as they tried to reach deals that would win over undecided lawmakers, including adding more money for opioid treatment.
With a slim 52-seat majority, McConnell can only afford to lose two GOP senators and still let Vice President Pence break a tie. With Hoeven’s defection there are roughly 10 GOP senators publicly opposed to the bill.
“Compared to how optimistic I was the week before now … I’m very pessimistic,” Grassley told constituents in Mount Pleasant, Iowa, before adding that he thinks Congress will get something done even if repeal now and replace later.
Republicans have campaigned for years on repealing and replacing ObamaCare, arguing the Affordable Care Act is “failing” and in a “death spiral,” and insisting that the law is not fixable.
McConnell’s staff were quick to note that the GOP leader’s comments are similar to remarks he made after a closed-door meeting with Senate Republicans and Trump at the White House. But the pivot comes as McConnell is trying to wrangle his caucus behind his legislation even as conservatives appear to be digging in for a fight.
If the warning was meant to be a signal to unruly Republicans that it was either the Senate bill or working with Democrats, there was no sign they had an immediate impact.
A few hours after McConnell’s comments, Sen. Rand Paul (R-Ky.), a conservative opponent of the Senate bill who believes it would leave too much of ObamaCare in place, held a press conference to tout his proposal to loosen rules on association healthcare plans.
He said he’d heard no feedback from leadership.
“No, none. We’ve reached out to Senate Republican leadership,” Paul told reporters. “We’ve described some of the things with the association plans…and we have not gotten any feedback. Now I talked to the president about it, and he was very receptive.”
Conservatives are also demanding an amendment from Sen. Ted Cruz (R-Texas) that would allow insurers to sell plans that don’t meet ObamaCare regulations.
But the demand has riled GOP aides and other members of the caucus, who are accusing Cruz of making unrealistic demands that can’t get 50 votes. GOP leadership has sent two versions of their bill to the CBO, one that would include Cruz’s proposal and one without.
Just hours after McConnell’s comments, Cruz became the latest GOP senator to call for simply repealing ObamaCare without a replacement plan as a plan B.
“We have had – for seven years – we have promised to do that,” Cruz said. “Repealing Obamacare was the single biggest factor producing a Republican House, a Republican Senate and, I think, ultimately a Republican president.”
The move would either require Republicans to get 60 votes for a replacement plan or use the fiscal year 2018 budget as a vehicle, scrapping their plans for tax reform.
Senate GOP leadership has signaled the idea is a non-starter even after it got the backing of Trump and a growing number of senators.
Sen. Ben Sasse (R-Neb.) told local reporters that he was willing to see if McConnell could “get the ball across the finish line” by the time lawmakers return to Washington, but if not he supported separating repeal and replace.
“If we can’t get this done instead of walking away from either repeal or replace … I don’t want that to happen,” he said. “So I think it would be a more prudent legislative step to unbundle repeal and replace.”
Section 1332 State Innovation Waivers: Current Status and Potential Changes
Section 1332 State Innovation Waivers: Current Status and Potential Changes
Section 1332 of the Affordable Care Act (ACA) authorizes states to waive key requirements under the law in order to experiment with different health coverage models. As Republicans in Congress debate repeal and replacement of the ACA, renewed attention is being paid to these waivers as a mechanism for giving states flexibility to restructure their health care markets. The waiver authority is generally broad, though certain process and outcome standards must be satisfied. State interest in 1332 waivers to date has been limited; however, changes to the statutory waiver requirements included in the Senate Better Care Reconciliation Act of 2017 (BCRA) or other signals from the Trump administration could spark increased state action. This brief describes current 1332 waiver activity and raises questions regarding the future of these waivers, particularly in the context of proposed changes under discussion.
What Does Section 1332 Allow?
Beginning in 2017, states can request 5-year waivers of certain ACA provisions through Section 1332. States may seeks waivers of requirements related to the essential health benefits (EHBs) and metal tiers of coverage (bronze, silver, gold, and platinum) along with the associated limits on cost sharing for covered benefits. They may alter the premium tax credits and cost-sharing reductions, including requesting an aggregate payment of what residents would otherwise have received in premium tax credits and cost-sharing reductions. States may also modify or replace the marketplaces and change or eliminate the individual and/or employer mandates (See Appendix A for more detail on these provisions).
The ACA includes guardrails limiting how 1332 waivers can be used by states. The current statutory language requires that state waiver applications must demonstrate that the innovation plan will:
- Provide coverage that is at least as comprehensive in covered benefits;
- Provide coverage that is at least as affordable (taking into account premiums and excessive cost sharing);
- Provide coverage to at least a comparable number of state residents; and
- Not increase the federal deficit.
Additionally, while states can submit ACA innovation waivers in conjunction with Medicaid waivers (under Sec. 1115 of the Social Security Act), innovation waivers cannot be used to change Medicaid program requirements.
In 2012, the Department of Health and Human Services (HHS) issued final regulations outlining the procedures for state innovation waiver applications. In 2015, HHS and the Treasury Department issued guidance on how they would interpret the law’s requirements for waivers to provide for comparable coverage, comprehensiveness, affordability, and budget neutrality. Unlike regulations and statutes, guidance is not legally-binding, and therefore, can be more easily changed by subsequent administrations.1 On his first day in office, President Trump issued an executive order suggesting that states would be given increased flexibility with regard to ACA implementation.
The 2015 guidance offered a fairly strict interpretation of the statutory guardrails for 1332 waivers. It emphasized the need to protect access to care and affordability for vulnerable populations, including the poor, the elderly, and those with high health needs and risks, noting that impacts on these populations would be considered in assessing whether any waiver met the statutory guidelines. The guidance also specified that coverage and affordability would be measured annually as well as over the life of the waiver and that comprehensiveness of coverage would evaluate coverage under all ten essential health benefit (EHB) categories and under any one EHB category. In calculating deficit neutrality, states cannot use savings from a separate 1115 waiver to offset spending under a 1332 waiver, and any changes in the cost of Medicaid that might result from a waiver would also be measured. Finally, with respect to waiver administration, the guidance noted that to the extent waiver programs envision new methods for determining eligibility for or delivering subsidies, states would need to build their own systems and could not rely on IRS or HHS to customize operations of healthcare.gov or the federal tax system to accommodate individual state programs.
The unexpected political power of dentists
As the cost of dental care rises beyond the reach of millions of Americans, the dental lobby is coming under increasing scrutiny. Critics say the ADA has worked to scuttle competition that could improve access to dental care in underserved areas and make routine checkups and fillings more affordable.
The Federal Trade Commission has battled dentists in state after state over anti-competitive conduct. In 2007, the FTC successfully settled a complaint over a South Carolina dental board requirement that dentists examine children in school clinics before hygienists can clean their teeth, adding greatly to the cost. In 2015, the FTC won a Supreme Court ruling against the North Carolina dental board, which tried to block teeth-whitening businesses from operating in malls.
This year, the FTC publicly commented on a growing campaign to improve access to dental care by creating a category of mid-level practitioners, or “dental therapists,” to provide some routine services. In a letter to the Ohio lawmakers considering such a measure, FTC officials said therapists “could benefit consumers by increasing choice, competition, and access to care, especially for the underserved.”
More than a dozen states are considering similar proposals, despite fierce resistance from the ADA and its state affiliates. During the Maine debate, so many dentists flooded the statehouse in Augusta that besieged lawmakers taped up signs declaring their offices a “Dental Free Zone.”
The dentists had a unique way to get around the blockade: the regular checkup. While the bill was pending, some lawmakers found themselves getting an earful when they stretched out and opened wide for an oral exam.
“I’m certainly a captive audience when I am in the dental chair,” said Brian Langley (R), a Maine state senator who also got calls from four other dentists in his district and ended up siding with them.
Former lobsterman Michael Hanson, 54, says the American dental system is broken. (Linda Davidson/The Washington Post)The bill establishing a new provider type ultimately passed, but “it was brutal, very brutal,” recalled David Burns, a Republican state senator who retired after supporting the measure. Afterward, Burns said, he got a call from his dentist, who vowed never to treat him again, saying, “This relationship is over.”
Most of the 200,000 dentists in America work solo, in offices that are essentially small businesses. They are known for projecting a remarkably unified voice on issues relating to their livelihood. The ADA says 64 percent of dentists belong to the association. By comparison, only 25 percent of physicians belong to the American Medical Association.
Podcast: What The Health? Why Is This Stuff So Complicated?
Julie Rovner of Kaiser Health News, Joanne Kenen of Politico, Margot Sanger-Katz of The New York Times and Paige Winfield Cunningham of The Washington Post discuss the latest on the Senate’s effort to “repeal and replace” the Affordable Care Act, and why it is so difficult to make popular changes, such as requiring insurers to cover people with preexisting health conditions.
What Are the Implications for Medicare of the American Health Care Act and the Better Care Reconciliation Act?
An important question in the debate over proposals to repeal and replace the Affordable Care Act (ACA) is what might happen to the law’s many provisions affecting the Medicare program. The American Health Care Act (AHCA), which was passed by the House of Representative on May 4, 2017, and the Better Care Reconciliation Act (BCRA), released by Senate Republicans on June 22, 2017, would leave most ACA changes to Medicare intact, including the benefit improvements (no-cost preventive services and closing the Part D coverage gap), reductions to payments to health care providers and Medicare Advantage plans, the Independent Payment Advisory Board, and the Center for Medicare and Medicaid Innovation.
However, both bills would repeal the Medicare payroll surtax on high-income earners that was added by the ACA, effective January 2023. That provision, which took effect in 2013, provides additional revenue for the Part A trust fund, which pays for hospital, skilled nursing facility, home health and hospice benefits. The Part A trust fund is financed primarily through a 2.9 percent tax on earnings paid by employers and employees (1.45 percent each). The ACA increased the payroll tax for a minority of taxpayers with relatively high incomes—those earning more than $200,000/individual and $250,000/couple—by 0.9 percentage points.
In addition to repealing the ACA’s Medicare payroll surtax, both bills would repeal virtually all other tax and revenue provisions in the ACA, including the annual fee paid by branded prescription drug manufacturers, which would decrease revenue to the Part B trust fund. The bills would also reinstate the tax deduction for employers who receive Part D Retiree Drug Subsidy (RDS) payments, which would increase Medicare Part D spending.
According to the Congressional Budget Office, the provision in the AHCA and the BCRA to repeal the Medicare payroll surtax would reduce revenue for Part A benefits by $58.6 billion between 2017 and 2026. Proposed changes to the ACA’s marketplace coverage provisions and to Medicaid financing in both bills would also increase the number of uninsured, putting additional strain on the nation’s hospitals to provide uncompensated care. As a result, Medicare’s “disproportionate share hospital” (DSH) payments would increase, leading to higher Part A spending between 2018 and 2026 of more than $40 billion, according to CBO.
Altogether, changes to Part A spending and financing in the AHCA and BCRA would weaken Medicare’s financial status by depleting the Part A trust fund two years earlier than under current law, moving up the projected insolvency date from 2028 to 2026, according to Medicare’s actuaries (Figure 1).
Cartoon – Generous Options
HENRY KOTULA 