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Medicaid Changes in Better Care Reconciliation Act (BCRA) Go Beyond ACA Repeal and Replace

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Medicaid Changes in Better Care Reconciliation Act (BCRA) Go Beyond ACA Repeal and Replace

Medicaid Changes in Better Care Reconciliation Act (BCRA) Go Beyond ACA Repeal and Replace

The Senate released an updated discussion draft of legislation called the Better Care Reconciliation Act of 2017 (BCRA) on July 20, 2017. For Medicaid, the overall framework is very similar to earlier versions of the bill in the Senate as well as the American Health Care Act (AHCA) that passed in the House. Both the BCRA and the AHCA go beyond repeal and replacement of the Affordable Care Act (ACA) to make fundamental changes to Medicaid by setting a limit on federal funding through a per capita cap or block grant. The BCRA also includes additional changes that would further reduce federal spending for states with high per enrollee spending, limit state financing mechanisms, allow states to impose work requirements, and make other eligibility changes. The revised draft of the BCRA leaves many provisions up to HHS Secretary discretion, creating further uncertainty for states about how implementation of the legislation would proceed. Across the board, these changes would have significant implications for the 74 million people covered by the Medicaid program and for states that jointly finance and administer the program.

The Congressional Budget Office estimates that under current draft of the BCRA, federal Medicaid spending related to the coverage provisions would decline by $756 billion over the 2017-2026 period or $739 billion accounting for all Medicaid provisions in the bill. According to CBO’s longer-term projections, the BCRA would reduce federal Medicaid spending by 35% in 2036 (Figure 1). These reductions would leave states with difficult choices about how to fill in the gaps in federal funding or cut back on Medicaid eligibility, benefits, or reimbursement rates (Figure 2). This brief explains the five most significant Medicaid changes in the BCRA as well as additional Medicaid changes that could have major implications for states, providers, and beneficiaries.

5 Most Significant Medicaid Financing Changes in the BCRA

1. Phase out the enhanced federal financing for the ACA Medicaid expansion.

Under the BCRA, for states that adopted the expansion as of March 1, 2017, the enhanced federal match would phase-out from 90% in CY 2020, to 85% in 2021, 80% in 2022, 75% in 2023 and then to the regular state match rate in 2024 and beyond. Thirty-one states plus DC have implemented the Medicaid expansion (Figure 3). On average, expansion enrollees account for 20% of all Medicaid enrollees (as of early 2016) and federal expansion financing accounts for about 21% of all Medicaid funding (for FY 2015). However, these shares are much higher in some states, placing them at higher risk for facing challenges in responding to the reduction in the federal match. Multiple states are likely to eliminate or scale back their expansion coverage due to the increased cost if federal funding is reduced, including eight expansion states (AR, AZ, IL, IN, MI, NH, NM, and WA) that have legislation requiring them to reduce or eliminate the expansion if the federal match rate is reduced. Given the magnitude of estimates of how much it would cost states to replace federal expansion funds, it appears that it is unrealistic to suggest that expansion states would be able to replace those funds and continue their expansion programs at current levels without the enhanced expansion match rate. Reports suggest that waivers or additional grant funding may be offered to states in place of the enhanced funding for the expansion, however, it is unlikely that such amounts would fully offset federal funding reductions in the BCRA tied to the expansion.

2. Limit federal Medicaid funding through a per capita, or per enrollee, cap on financing.

Under current law, Medicaid provides a guarantee of coverage for individuals who are eligible for the program and a guarantee to states of federal matching dollars for spending on Medicaid services. Beginning in FY 2020, the BCRA would limit federal Medicaid funding to each state based on the sum of the costs per enrollee for five beneficiary groups – elderly, blind and disabled adults,1 children, expansion adults, and other adults – multiplied by the number of enrollees in the group and the state’s federal match rate. The proposed legislation specifies a uniform national inflation factor for the federal financing growth rate. Under both AHCA and BCRA, the per enrollee amounts would increase annually at slower rates than projected growth for Medicaid.

The caps are estimated to result in large reductions in federal Medicaid spending over time. Under BCRA, the caps would initially grow by the Consumer Price Index for medical care (CPI-M) for adults and children and by the CPI-M plus one percentage point for elderly and disabled groups. Starting in 2025, per enrollee amounts for all groups would increase by the historically lower CPI for urban consumers (CPI-U). All of these rates are lower than projected growth for private health insurance spending per enrollee. Reductions in federal Medicaid funding from the caps are expected to grow over time, especially after 2025 when the inflation factor is limited to CPI-U. Current projections have CPI-M growing at 3.7% and CPI-U at 2.4% annually; however, the rate of growth for these indices can vary and fluctuate over time which could cause uncertainty and instability in state budgeting.

3. Provides Secretary discretion to adjust per enrollee spending down for states with per enrollee spending 25% higher than the national average.

The BCRA also includes a provision not included in the AHCA, which would direct the HHS Secretary to adjust target per enrollee amounts under the per capita cap to bring states closer to national average spending. Specifically, the Secretary would adjust a state’s target per enrollee amounts by 0.5% to 2% for states spending 25% or more either above or below the national average per enrollee expenditures beginning in 2020. These adjustments are applied to overall per enrollee spending in 2020 and 2021 and then for each enrollment group in subsequent years. Adjustments are to be budget neutral to the federal government (meaning they would not result in a net increase of federal payments under the per capita caps for the fiscal year). Certain states with population densities less than 15 individuals per square mile (currently: AK, MT, ND, SD, and WY) would be exempt from this provision. Data for 2014 show that the number of states with high per capita spending that face tighter caps exceeds the number of states that would experience relief for having low spending overall and for each eligibility group (Table 1). Secretary discretion and actual spending patterns will make it difficult for states to estimate the effect of this provision.

4. Allow states the option to choose block grant financing for non-expansion Medicaid adults.

Beginning in FY 2020 under the BCRA, states could elect to receive federal financing for nonelderly/non-disabled traditional adults (low-income parents and pregnant women) and/or adults eligible through the ACA Medicaid expansion in the form of block grant instead of per capita cap funding. The block grant amount that states would receive from the federal government is initially based on the state’s target per capita spending amount for the fiscal year multiplied by the number of adult enrollees and the federal average Medicaid matching rate. The amount would grow annually by CPI-U even prior to 2025 when the per capita cap amounts would grow by the higher CPI-M inflation factor. States have a maintenance of effort (MOE) requirement—essentially, a minimum amount states must spend each year—that is the state share of the enhanced CHIP match rate (without the 23 percentage point increase provided under the ACA) multiplied by the block grant amount. If a state fails to meet the MOE requirement in a given year, its federal block grant amount for the following year would be reduced. States that meet MOE and continue to elect the block grant option can rollover unused block grant funds into the next fiscal year.

Under the block grant option, states could impose conditions of eligibility and not comply with key provisions in current law like comparability and state-wideness.  Under the block grant option, states would be required to cover low-income parents and pregnant women at current federal minimum income levels and provide certain benefits. However, states could set conditions of eligibility for groups beyond these federal minimum groups, including for ACA expansion adults. Additionally, states electing the BCRA block grant option would not have to comply with other federal requirements, including comparability (the requirement that Medicaid-covered benefits be provided in the same amount, duration, and scope to all enrollees), state-wideness (the requirement that bars Medicaid programs from excluding enrollees or providers because of where they live or work in the state), and freedom of choice of provider (that allows beneficiaries to be permitted to choose among any provider participating in Medicaid). Like per capita caps, Medicaid block grants fail to account for changes in health care costs over time. Block grants also carry additional risk for states, providers, and beneficiaries because they do not account for changes in Medicaid enrollment (which could increase during an economic downturn).

5. Provides the HHS Secretary discretion to allocate funds to address the opioid crisis and public health emergencies. 
The BCRA appropriates $45 billion for FY 2018 through FY 2026 for grants to states to support substance use disorder treatment and recovery support services with significant discretion to the HHS Secretary to allocate the funds. The BCRA also provides the HHS Secretary with discretion to exclude from a state’s per capita cap or block grant limit a total of $5 billion across all states for Medicaid spending in response to a public health emergency from January 2020 through December 2024. This exclusion would only apply during a period in which the HHS Secretary has declared a public health emergency in a state or region and also deemed an exclusion appropriate. Under current law, states can increase spending with a guaranteed federal match or seek waivers (like in Flint, MI or for states hit by hurricane Katrina) to address public health emergencies.

Other Significant BCRA Medicaid Changes

Other BCRA Medicaid changes with significant implications for states, providers, and beneficiaries include the following:

Limiting states’ ability to use provider taxes to finance their share of Medicaid by lowering the provider tax safe harbor threshold2 from 6.0% to 5.0% of net patient revenues over 5 years, beginning in 2021. All states except for Alaska currently use provider taxes to finance the state share of Medicaid, and in 2016, 28 states had at least one tax exceeding 5.5% of net patient revenues. The proposed BCRA change could shift additional costs to states or result in additional reductions in Medicaid payment rates, services, or eligibility.

Creating a state option to require work as a condition of eligibility for nondisabled, nonelderly Medicaid adults as of October 1, 2017 (with some exemptions for certain groups including pregnant women or the sole caretaker of a child under age 6 or a child with a disability). Depending on how they are implemented, work requirements could increase administrative burdens on states and adversely affect some people, who are unable to comply due to their health, family caregiving obligations, or other reasons, by preventing them from accessing needed health coverage through Medicaid.3

Cancelling scheduled disproportionate share hospital (DSH) payment reductions for non-expansion (but not for expansion) states. The BCRA would exempt non-expansion states from the DSH reductions that were included in the ACA. During FY 2020-FY 2023, the BCRA would also provide a DSH payment increase to non-expansion states with per capita FY 2016 DSH allotment amounts (the FY 2016 DSH allotment divided by the number of uninsured individuals in the state for the fiscal year) that are below the national average per capita amount. A state qualifies as a non-expansion state if it is not covering expansion adults on or after January 1, 2021. This means that current expansion states that discontinue their expansions by the end of 2020 could qualify for increased DSH funds after their expansion ends. In addition, the BCRA would provide certain non-expansion states with $10 billion over 5 years (FY 2018-FY 2022) for safety-net funding.

Changing eligibility and enrollment processes with new requirements for eligible individuals to obtain and maintain Medicaid coverage. Changes include: repealing the requirement for states to cover Medicaid benefits retroactively for three months prior to the month of an individual’s enrollment in the program except for enrollees who are eligible based on old age or disability only); prohibiting hospitals from temporarily enrolling individuals in Medicaid if they are likely to be eligible under a state’s Medicaid eligibility rules (a policy known as “hospital presumptive eligibility”); removing a presumptive eligibility option that includes health care providers other than hospitals for expansion adults; and giving states the option to renew eligibility of Medicaid expansion adults every six months (or more frequently) compared to the current 12 month redetermination period.

Prohibiting federal Medicaid funding for Planned Parenthood for one year (beginning on the date of enactment). The Hyde Amendment already prevents the use of federal funds for abortion services,4 so the effect of this proposed policy would be to limit Planned Parenthood’s capacity to provide preventive care and other services to women (such as clinical breast exams or birth control).

Repealing the enhanced federal match rate available under the ACA for the Community First Choice (CFC) state plan option, as of January 1, 2020. The ACA established the CFC option to allow states to provide home and community-based attendant services and supports to Medicaid enrollees who would otherwise require an institutional level of care. States taking up the option currently receive a 6% increase in their federal match rate for CFC services, and without this additional funding states may eliminate the option. The BCRA also creates a demonstration that would provide 100% federal matching funds for certain states selected by the HHS Secretary providing home and community-based services (HCBS) for seniors or adults with disabilities under a Section 1915 (c) or (d) waiver or Section 1915 (i) state plan authority, limited to $8 billion over four years, from 2020 through 2023. The Secretary would select participating states with priority given to the 15 states with the lowest population density. Unlike CFC, the authority for this new demonstration is time-limited, all states likely could not participate, and federal funding is capped. The $8 billion allocated to the new demonstration is less than half of the cost of the elimination of CFC funding, estimated by the CBO at $19 billion over 10 years.

Increasing the federal match rate for Medicaid services provided to American Indians by non-Indian Health Services (IHS) providers. Under existing law, the federal government covers 100% of the costs of Medicaid-covered services provided to American Indians through an IHS or Tribally-operated facility, and the BCRA would expand this 100% match rate to apply to all Medicaid-covered services delivered by all Medicaid providers to Medicaid-eligible members of an Indian tribe.

Repealing the essential health benefit requirement in Medicaid alternative benefit plans, beginning in 2020. The alternative benefit plans are required for expansion adults and a state option for benefit package design for certain other populations. While the Medicaid benefit package for children under Early and Periodic Screening, Diagnostic and Treatment (EPSDT) is comprehensive, states have flexibility to design benefit packages for adults, and many services for adults are offered at state option. If the essential health benefits requirement were repealed, there would be no federal minimum requirement in Medicaid to ensure that adults have coverage in certain areas such as mental health and substance use disorder treatment.

Parliamentarian deals setback to GOP repeal bill

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http://thehill.com/policy/healthcare/343234-parliamentarian-deals-setback-to-gop-healthcare-bill

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Major portions of the Republican bill to repeal and replace ObamaCare will require 60 votes, according to the Senate parliamentarian, meaning they are unlikely to survive on the floor.

The parliamentarian has advised senators that several parts of the bill could be stripped out, according to a document released Friday by Sen. Bernie Sanders (I-Vt.), the ranking member of the Senate Budget Committee. (Read the guidance here.)

The provisions that would likely be removed include polices important to conservatives, such as restrictions on tax credits being used for insurance plans that cover abortion.

Language in the bill defunding Planned Parenthood for a year also violates budget rules, according to the parliamentarian. That guidance is sure to anger anti-abortion groups who backed the bill specifically because of those provisions.

In a statement, Planned Parenthood said it was “obvious” that the defunding provision would be a violation of the reconciliation rules.

“No amount of legislative sleight of hand will change the fact that the primary motivation here is to pursue a social agenda by targeting Planned Parenthood,” the group said.

The parliamentarian has also not yet ruled on a controversial amendment from Sen. Ted Cruz (R-Texas) that would allow insurers to sell plans that do not meet ObamaCare regulations. If that provision were struck, conservative support for the bill would be in doubt.

Republicans are trying to use the budget reconciliation process to pass their healthcare bill with only a simple majority. The provisions deemed impermissible under that process can be stripped if a senator on the floor raises an objection.

Democrats would be virtually certain to deny Republicans the 60 votes they would need to keep portions of the bill intact.

The result is that the arcane rules of the Senate could end up making the bill harder for Senate Majority Leader Mitch McConnell (R-Ky.) to pass.

A spokesman for McConnell was quick to point out that the parliamentarian only provides guidance on the legislation to help inform subsequent drafts. The bill will have to change before it gets to the floor if Republicans want to salvage any of provisions in question.

GOP leaders have said they want to vote on a procedural motion to begin debate on ObamaCare repeal legislation early next week. However, it’s still not clear if they have the votes, or which legislation they will be voting on; the replacement bill, or repeal-only legislation.

Some conservatives were already questioning Friday why the Senate parliamentarian, Elizabeth MacDonough, would rule against Planned Parenthood defunding, when that provision was allowed under reconciliation in 2015.

A spokesman for Sanders said the guidance has changed because it is now clear that Planned Parenthood would be the only organization affected by the defunding language.

“It passed last time because there was at least a question that other entities could be affected by the language,” the spokesman said. “In the interim, Republicans have not been able to show that any entity other than Planned Parenthood is affected, and the new [Congressional Budget Office] score confirms that.”

In a blow to the insurance industry, the parliamentarian has advised that two key market stabilization provisions in the bill would be against the rules. First, the legislation can’t appropriate the cost-sharing reduction subsidies insurers rely on to keep premiums and deductibles low; it can only repeal them.

Additionally, a “lockout” provision requiring consumers with a break in coverage to wait six months before buying insurance also violates the rules, according to the guidance.

The provision was added to the bill to address concerns that people would only sign up for health insurance when they’re sick, if insurers are still prevented from denying coverage for pre-existing conditions.

The parliamentarian also advised that a specific provision dealing with New York State’s Medicaid program would be a violation of the rules. Senate Minority Leader Charles Schumer (D-N.Y.) seized on that decision.

“The parliamentarian made clear that state-specific provisions” violate the rules, Schumer said. “This will greatly tie the majority leader’s hands as he tries to win over reluctant Republicans with state-specific provisions. We will challenge every one of them.”

CBO Score on Senate Bill: 50 Million Americans Uninsured by 2026 and Sharp Increases in Premiums and Deductibles

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http://www.commonwealthfund.org/publications/blog/2017/jul/cbo-score-on-senate-bill?omnicid=EALERT1245625&mid=henrykotula@yahoo.com

This week the Congressional Budget Office (CBO) released its report on the impact of the revised Better Care Reconciliation Act (BCRA), the Senate bill to repeal and replace the Affordable Care Act. The revised bill made changes aimed at winning over Republicans who oppose the bill.

The CBO score indicates that those changes made no difference in the number of people who would lose insurance under the bill if it were to become law. The CBO projects that 22 million people would lose their coverage by 2026 — and millions more would see increased out-of-pocket costs. But the CBO score does not include an analysis of the most controversial change in the revised bill, an amendment modeled on one offered by Senator Cruz that would allow insurers to charge people more on the basis of their health. The insurance industry has already pointed out that this amendment would create conditions that could lead to a premium death spiral in the individual market and widespread losses of insurance. So it is likely that the CBO report underestimates the coverage losses under the revised BCRA.

Coverage Losses

The CBO projects that if the BCRA were to become law, the number of people without health insurance would nearly double to 50 million people by 2026, or more than the number of uninsured in the year the Affordable Care Act (ACA) passed.

Health care fight shows Washington at its worst

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http://www.sfchronicle.com/opinion/article/Health-care-fight-shows-Washington-at-its-worst-11303602.php?utm_campaign=CHL%3A%20Daily%20Edition&utm_source=hs_email&utm_medium=email&utm_content=54498266&_hsenc=p2ANqtz-8nW1z8XGp1RyWaBRZo1HR_YwqOWFq8gREqh7wzXohioPQ2kx3SMz2vwu8CMs2xJr1f1w3UqB1IbqGUtwIJvTN98D4mjA&_hsmi=54498266

The fight over repealing and replacing Obamacare was more about partisan politics than protecting consumers. Photo: Joe Raedle, Getty Images

The story of health care policy this week, this month and for the last decade (at least) has been a tale of partisan folly. But fear not, this isn’t another earnest pundit’s lament for the vital center to emerge, phoenix-like, to form a governing coalition of moderates in both parties. That’s not my bag.

After all, I have always argued that bipartisanship is overrated.

Bipartisan support often means unthinking support (as the founders could have told you). Partisans may be annoying from time to time, but they also can be relied upon to point out the shortcomings of what the other side is doing. When partisan criticism is missing, it might be a sign that politicians in both parties are helping themselves, not the country. Or, it might mean they’re pandering to the passions of the public and press rather than doing the hard work of thinking things through.

So you’ll get no warm and fuzzy pleading for moderates to scrub clean the word “compromise” so that it’s no longer a dirty word in Washington. Others can make the case for that. And besides, that argument misses the essence of this spectacular failure. Honest partisanship isn’t the problem, bipartisan dishonesty is.

Both parties have become defined by their lies and their refusal to accept reality. It’s a problem bigger than health care, but health care is probably the best illustration of it.

For seven years Republicans campaigned to repeal Obamacare. We now know that for many of those politicians, that pledge was a sales pitch that expired after the sale — i.e., the election — was final.

But before liberal readers pull a muscle nodding their heads: The Democrats aren’t any better. Obamacare itself was lied into passage. “You can keep your plan!” “You can keep your doctor!” “Your premiums won’t go up!” These were lies. If those promises were remotely true, Obamacare wouldn’t be the mess it is.

But these aren’t even the lies I have in mind.

The Republican “repeal and replace” bills debated for the last six months did not in fact repeal Obamacare. They kept most of its regulations intact — particularly the popular ones. The GOP did seek to repeal and reform the Medicaid expansion under Obamacare, but that’s not the same thing as repealing Obamacare.

Yet Republicans insisted it was a repeal because they wanted to claim that they fulfilled their repeal pledge. Actually fulfilling the substance of the pledge was a low-order priority. Heroically winning the talking point: This was their brass ring.

So, too, for the White House. Donald Trump just wanted a win. He has made it abundantly clear that he would sign anything the Republicans sent him — up to and possibly including the head of Alfredo Garcia if someone had written “Obamacare: Repealed” on the poor chap’s forehead. Trump has shown zero preference for any specific policy or approach during these debates. He just wants the bragging rights.

And that is the one thing Democrats are most determined to deny him. The Democrats know that Obamacare has been an albatross for their party. They often acknowledge, through gritted teeth, that the law needs a substantial overhaul.

More important, they also know that the GOP wasn’t pushing an actual repeal. But they couldn’t tolerate for a moment the idea that the Republicans would get to claim it was repeal. So the one thing both sides could agree upon was that this was a zero-sum war over repealing Obamacare — when it wasn’t.

This was all about bogus gasconade and rodomontade for Republicans and insecure rhetorical wagon-circling around Barack Obama’s “legacy” for Democrats. If Trump and the GOP agreed to abandon “repeal,” as Senate Minority Leader Chuck Schumer wants, one can only wonder how much replacing of Obamacare Schumer would allow the GOP to get away with.

Likewise, if Democrats could somehow give Republicans the ability to say they repealed Obamacare, many Republican senators — and certainly Trump — would probably be happy to leave the bulk of it intact.

It is this fact that makes the polarized, tribal climate in Washington so frustrating. I like partisan fights when those fights are about something real. The Medicaid fight was at least about something real. But most of this nonsense is a battle of liars trying to protect past lies in the hope of being able to make new lies seem just plausible enough for the liars to keep repeating them.

Trump’s war of attrition against Obamacare

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http://www.politico.com/story/2017/07/21/trumps-war-of-attrition-against-obamacare-240777?utm_campaign=CHL%3A%20Daily%20Edition&utm_source=hs_email&utm_medium=email&utm_content=54498266&_hsenc=p2ANqtz-9ek2u9ksxXcgIEhuqarS0spfhGiKMzLANnn_6r5sJmtFLcRJplq-a0Zqexn1eqaf_s9_sbG_p8WdTzuQUliN0eqfaVBA&_hsmi=54498266

Image result for healthcare war of attrition

The administration can do plenty to undermine the law even if Republicans are unable to repeal it.

Obamacare may escape another GOP repeal effort, but surviving a hostile administration could be a much tougher challenge.

If a last-ditch repeal effort fails in Congress next week, all indications are the Trump administration will continue chipping away at the Affordable Care Act — if not torching it outright.

President Donald Trump, who regularly says Obamacare is dead, has already taken steps to undermine the law even as the legislative battle over repeal drags on. His administration has slashed crucial advertising dollars, cut the enrollment window in half, and regularly pumps out anti-Obamacare videos and graphics — actions sure to reduce the number of people who sign up.

Trump has plenty of other options to roll back a program covering roughly 20 million Americans. Those include ending enforcement of the mandate to carry insurance, imposing work restrictions and nominal premiums on low-income adults who qualify for Obamacare’s Medicaid expansion and letting states relax the law’s robust coverage rules.

The man charged with the oversight of many of these decisions, Health and Human Services Secretary Tom Price, noted in his confirmation hearing that Obamacare grants him broad authority about how to enact it — powers that in his hands could be used to the scale back the law’s reach.

“Fourteen hundred and forty-two times the ACA said ‘the secretary shall’ or ‘the secretary may,’” Price noted in March.

One possible brake on the administration might be the pushback from some Republican governors and lawmakers who oppose letting insurance markets crumble on their watch — even as Trump insists voters will blame Democrats. After the Senate’s repeal effort appeared to unravel earlier this week, Sen. Lamar Alexander, chairman of a key health care committee, announced plans to hold hearings on stabilizing Obamacare’s shaky insurance marketplaces.

“The best next step is for both parties to come together and do what we can all agree on: fix our unstable insurance markets,” wrote 11 governors this week in a bipartisan letter led by John Kasich of Ohio and John Hickenlooper of Colorado.

However, there’s no sign that most Republicans in Washington are ready to drop their longtime vow to dismantle Obamacare, even with a planned Senate vote on repeal next week likely to fail.

The most devastating thing the administration could do to Obamacare is pull insurance subsidies, worth about $7 billion this year, that are paid to insurers to cover the out-of-pocket costs of low-income consumers. That could lead to an exodus of insurers from the Obamacare markets, send premiums soaring, and lead already wobbly markets in some states to collapse.

“We pay hundreds of millions of dollars a month in subsidy … and when those payments stop, it stops immediately,” Trump said in a meeting with Republican senators Wednesday. “It doesn’t take two years, three years, one year — it stops immediately.”

The Trump administration confirmed Wednesday it will make this month’s subsidy payments. However, insurers fear the administration could nix the subsidy at any time.

The other immediate concern for insurers is whether the administration will continue enforcing the individual mandate penalty for Americans who do not purchase insurance. Many saw Trump’s Day One executive order instructing agencies to weaken Obamacare as a green light for the IRS to stop enforcing the tax penalty for skipping coverage. So far, however, the mandate remains.

While the mandate has proven weaker than insurers had hoped to induce Americans — particularly the young and healthy — to purchase coverage, the industry still sees it as a key tool for keeping down costs and stabilizing the markets. Many are boosting premiums higher than planned due to fears Trump will no longer enforce it.

Signals that the mandate will no longer be enforced are sure to worry insurance companies whose participation in Obamacare’s marketplaces are key to making them function. Some major national and regional insurers have already said they will pull out of the marketplaces next year, with most citing uncertainty about the effort to roll back the law.

“If there are questions, if there are unknowns, [insurers] have to proceed conservatively,” said Ceci Connolly, CEO of the Alliance of Community Health Plans. “If they price on wishful thinking, they will come up short next year.”

Trump health officials have already shown a willingness to flex executive power to whack at the law.

Weeks after taking office, the Trump administration canceled $5 million in HealthCare.gov advertising in the final days of the previous enrollment season — a particularly crucial time for attracting young and healthy customers. On Wednesday, Trump’s HHS confirmed it will soon terminate two contracts for outreach programs designed to sign up people for insurance across the country.

“The contracts were never intended to be long term,” said Jane Norris, a spokeswoman for the Centers for Medicare & Medicaid Services, which oversees the law’s implementation.

The administration could also pare back federal funding for enrollment outreach programs. The Obama administration awarded $63 million in grants last September to help states bolster enrollment efforts, and another tranche of funding is supposed to be released by this fall. However, the administration hasn’t signaled whether it would continue this funding, and an appropriations bill advancing in the House would block dollars for the so-called navigator programs.

The next enrollment period starting Nov. 1 is looming. The Trump administration has already cut the sign-up period in half — to six weeks in the nearly 40 states using HealthCare.gov — worrying advocates that the shortened window will depress sign-up numbers.

In past enrollment seasons, the Obama administration rolled out a full-court marketing press, with top administration officials making media appearances to push enrollment. It’s hard to imagine Price and other top HHS officials making a similar effort after his department has trumpeted Obamacare’s struggles on a daily basis.

“They have to sign up millions of enrollees just to maintain the same amount of total enrollment,” said Larry Levitt of the nonpartisan Kaiser Family Foundation. “If there’s minimal outreach … there could be a big drop-off in enrollment.”

While the previous administration also took an active role in boosting insurer participation in the marketplaces, the Trump administration has taken a hands-off approach. There are no signs that HHS is looking to persuade insurers to sell coverage in the 40 counties that potentially won’t have any insurers selling Obamacare plans next year. Trump and administration officials often tout these “bare” counties as another sign of Obamacare’s flaws.

“40 counties in 3 states are currently projected by @CMSgov to have zero insurers on #Obamacare,” Price tweeted on Thursday.

HHS could also give red states much wider latitude to limit who can sign up for Medicaid. Arkansas, Arizona, Kentucky, Indiana, Maine and Wisconsin are among the states with Republican governors seeking federal permission to add work requirements or make able-bodied adult beneficiaries pay more for care. The Obama administration largely shunned similar requests because they would shrink enrollment.

At least one state is seeking the Trump administration’s permission to significantly overhaul Obamacare’s coverage rules in order to attract insurers back to its struggling marketplace. Iowa, which is at risk of having no insurer sell coverage statewide next year, wants to scrap Obamacare’s subsidies helping customers pay for premiums and medical bills and replace them with a limited tax credit. That could make lower-income and sick enrollees pay a lot more for coverage.

Iowa also wants to implement a single, standardized health insurance option instead of allowing insurers to sell a range of health plans as they now do under Obamacare. Finally, the state would create a reinsurance program meant to backstop insurers with particularly expensive customers, an idea pursued by Alaska, Minnesota, New Hampshire and other states.

At least one insurer said it would re-enter Iowa’s marketplace if the plan goes through. Though some Obamacare advocates have questioned whether Iowa can legally roll back Obamacare standards as the state has proposed, the Trump administration is expected to greenlight the plan.

Senate Leaders Press for Health Care Vote, but on Which Bill?

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Senate Republicans ended a demoralizing week on Thursday with their leaders determined to press ahead with a vote to begin debating health care next week, but with little progress on securing the votes and no agreement even on which bill to take up.

With President Trump urging them to move forward on their seven-year quest to erase the Affordable Care Act, Republican senators on Thursday still had not decided whether to revive a proposal to replace former President Barack Obama’s health care law with one of their own, or to simply repeal it and work on a replacement later.

The choice is unpalatable: The nonpartisan Congressional Budget Office said on Thursday that the latest version of the bill to repeal and replace the health law would increase the number of people without health insurance by 15 million next year and by 22 million in 2026. Those figures are the same as the estimates in the budget office’s previous analysis, despite numerous changes to the bill intended to win votes.

On the other hand, if senators opted simply to repeal the existing law, the budget office said on Wednesday, 32 million more people would be uninsured in 2026 compared with current law.

The majority leader, Senator Mitch McConnell of Kentucky, remained unswerving in his drive toward a vote next week on a procedural motion to begin debating health care. But he has not specified which version of the legislation he intends to put before the Senate. In effect, he is asking 50 senators to roll the dice and hope they land on an option they can work with.

“You can’t debate something that you don’t initiate the debate on,” said Senator John Cornyn of Texas, the No. 2 Senate Republican. “And everybody can offer endless amendments, so if anybody’s got a better idea, they can offer that and get a vote on it. And in the end, 50 people are going to decide whether we’re going to have an outcome or not.”

Asked whether senators want to know the plan before they vote, Mr. Cornyn said that was “a luxury we don’t have.” (He later wrote on Twitter that it was “hard to predict” the final legislation because of the amendment process.)

The release of the budget office’s analysis capped a tumultuous period that began with the seeming collapse of Mr. McConnell’s health care bill. Then Mr. Trump’s changing demands added to the disarray. Finally, the week turned heavy-hearted with the news that Senator John McCain, Republican of Arizona, has brain cancer.

It remained far from clear whether Republicans would be able to assemble the votes to begin debate, let alone coalesce around legislation to repeal the health law and, possibly, to replace it.

“I want us to remember that our attempt here is to lower the cost of health care; it’s not just about getting 50 votes,” said Senator Bob Corker, Republican of Tennessee. Mr. Corker said a repeal-only measure now seemed like the best course of action, and he expressed concern about the continuing negotiations for a broader bill that would replace the health law.

“I’m beginning to fear that it’s taking on some of the same characteristics that Obamacare took on when it was passed,” Mr. Corker said. “It’s beginning to feel a little bit like a bazaar, if you will, where, ‘Let’s throw $50 billion here, $100 billion there.’”

How the Number of Uninsured Would Change

The increase in the number of uninsured is virtually the same under the initial and the revised versions of the proposed Senate Republican health plans.

To start debate, Mr. McConnell can afford to lose only two Republican votes — or just one if Mr. McCain is absent. It was unclear on Thursday whether Mr. McCain would be able to travel to Washington in the near future, and Senator Susan Collins of Maine remained firmly in opposition, barring a drastic change in the direction of the Senate’s efforts. She said the Senate should hold hearings on the problems with the Affordable Care Act and try to produce bipartisan bills on the subject.

“As long as we are fundamentally changing Medicaid and taking some $700 billion out of the program, I do not see myself voting for a bill that does that,” Ms. Collins said. “And to do that without holding a single hearing on what the implications would be for some of our most vulnerable citizens, for our rural hospitals and our nursing homes, is not an approach that I can endorse.”

The budget office said the latest version of the Senate bill would cut projected federal spending on Medicaid by $756 billion in the coming decade, and in 2026, it said, 15 million fewer people would be enrolled in Medicaid, compared with current law.

Senators from states that have expanded Medicaid worry about the loss of coverage. To address those concerns, Republican leaders are considering a proposal to add $200 billion to the bill to help reduce the costs of private insurance for people who lose Medicaid.

“It sounds like a lot of money, and it is a lot of money,” said Senator Christopher S. Murphy, Democrat of Connecticut. But he said it represented just a slice of the funds that are being cut and described it as only “a temporary Band-Aid on a much bigger problem.”

The budget office has yet to take into account a provision that would allow insurers to offer low-cost, stripped-down insurance plans, an idea that has been pushed by Senator Ted Cruz, Republican of Texas, and is critical to winning his vote and that of another conservative, Mike Lee of Utah.

Mr. Cruz’s proposal was included in a version of the bill released last week, but it has been assailed by the insurance industry. The provision was omitted from the latest version of the bill that was released on Thursday, but congressional aides said that was because an assessment from the budget office was not ready yet, not because the proposal had been jettisoned.

The budget office did have good news about the latest version’s fiscal impact: It would reduce federal budget deficits by a total of $420 billion over 10 years, about $100 billion more than an earlier version of the legislation. The change resulted mainly from the decision of Senate leaders to keep two taxes on high-income people that were imposed by the Affordable Care Act, but that would have been eliminated under the earlier version.

The latest version of the Senate bill would increase average insurance premiums by about 20 percent next year for a typical “benchmark plan,” the budget office estimated, but would reduce premiums after 2019, so that in 2026 premiums for a benchmark plan would be about 25 percent lower than under current law.

But, the budget office said, the Senate bill could sharply increase deductibles, raising the amount that a person would pay out of pocket for most services before insurance made any contribution. For a single person, it said, the annual deductible could soar to $13,000 in 2026. That could push many lower-income Americans into the ranks of the uninsured.

“Because a deductible of $13,000 would be a large share of their income, many people with low income would not purchase any plan even if it had very low premiums,” the budget office said.

Moreover, the budget office said, even though average premiums for a standard benchmark plan would fall after 2019, many older people would face substantial increases in premiums.

For example, it said, the net premium, after tax credits, for a midlevel “silver plan” for a 64-year-old person with annual income of $26,500 would be $5,500 a year in 2026, more than three times the amount projected under current law.

As repeal and replace falters, more say GOP should abandon repeal plan

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http://www.cnn.com/2017/07/20/politics/health-care-poll-abandon-repeal-replace/index.html?lipi=urn%3Ali%3Apage%3Ad_flagship3_feed%3BUMCVso0rSd6nYA7sO0FoTg%3D%3D

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A new CNN poll conducted by SSRS finds a growing share of Americans want to see the GOP abandon its effort to repeal and replace the 2010 health care law known as Obamacare, as majorities across party lines want congressional Republicans to aim for a bill with bipartisan support.

Overall, 35% in the poll say they’d like President Donald Trump and the Republicans in Congress to give up their plans for repealing and replacing Obamacare, up from 23% who said the same in a March survey.
A majority still favor some form of repeal (34% would prefer repeal with replacement at the same time, and 18% favor repeal regardless of whether the law is replaced at the same time). The share in favor of repeal without replacement has held roughly steady since March; it remains the least popular option.
But public preferences are shifting away from repealing the law and enacting replacements concurrently (down from 59% in March), and more now say they’re unsure how they want Republican leaders to proceed (13% say so in the new poll).
Trump to GOP senators: ‘Inaction is not an option’
Increases in support for abandoning repeal have come largely among groups that aren’t central to the GOP’s base: Younger adults, non-whites and those with lower incomes have become notably more supportive of leaving the ACA as is.
On the growing uncertainty, the percentage of respondents in a poll who say they don’t know how they feel about an issue is often related more to the methodology and administration of the survey than to real uncertainty about an issue, however, given the real-life uncertainty about the Senate’s plan to replace the ACA while the poll was in the field, in this case, it’s possible there’s been a meaningful increase in unknown feelings about the law itself.
The poll also finds that with several failed efforts at repealing and replacing the bill in the rear view mirror, about half think it’s likely the President and Republicans in Congress will ultimately be able to reach a deal to repeal and replace Obamacare. That’s down from 58% who felt it was likely in an April CNN/ORC survey, but remains above the share who say it’s unlikely the ACA will be repealed and replaced (41%).
Republicans themselves remain optimistic that their party’s leaders in the White House and Congress will be able to come together to achieve this long-standing goal, 78% say it’s very or somewhat likely to happen, but less than half of independents or Democrats agree.
Overall, almost eight in 10 in the new poll say they’d like Republicans in Congress to try to work with Democrats to pass a health care bill that has bipartisan support (77% say so). Just 12% favor continuing to try to pass a bill that only has GOP backing. Even among Republicans, only about a quarter favor an approach that only has the backing of Republican lawmakers.
Interviewing for the CNN poll conducted by SSRS was completed July 14-18 among a random national sample of 1,019 adults. The survey included 405 respondents reached on landline telephones and 614 reached on cellphones. The margin of sampling error for the full sample is plus or minus 3.7 percentage points.

 

Podcast: On the failed health care bill

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https://www.brookings.edu/podcast-episode/on-the-failed-health-care-bill/?utm_campaign=Brookings%20Brief&utm_source=hs_email&utm_medium=email&utm_content=54432878

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Molly Reynolds, a fellow in Governance Studies, describes why it has been so difficult for Senate Republicans to even begin writing legislation to repeal and replace Obamacare and outlines the uncertainties in the future of national health care policy.

 

 

AHCA savings, $487 billion in Medicare cuts remain in House budget proposal

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http://www.modernhealthcare.com/article/20170719/NEWS/170719888/ahca-savings-487-billion-in-medicare-cuts-remain-in-house-budget

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The House Budget Committee on Wednesday agreed to bake in hundreds of billions in Medicaid cuts from its ACA repeal bill to the budget resolution, plus an additional $114 billion in cuts over 10 years.

The committee’s Republicans’ unanimously approved the decision with no Democrats on board. The budget resolution, which is the foundation for passing tax reform in the Senate without Democratic votes, also assumes Medicare will reduce spending by $487 million from 2018 to 2027.

Some of the additional savings would come from imposing a work requirement on Medicaid adult beneficiaries who are younger than 65 and are not on Social Security disability as a condition of eligibility.

The Medicare savings are built on an idea long-favored by Republicans — using vouchers to buy insurance, though Republicans say future beneficiaries will have the option to buy traditional Medicare too. Democrats during Wednesday’s hearing complained that traditional Medicare would cost 25% more than it does now if vouchers come into play.

The Republicans also included savings that would stem from raising the Medicare eligibility age for future beneficiaries who are 51 or younger. Under the proposal, those individuals would not become eligible for full Social Security benefits or Medicare until the age of 67. The Congressional Budget Office has estimated that would reduce Medicare spending by 2% once everyone in the program is covered by the later eligibility age.

The proposal includes a requirement that affluent seniors pay higher premiums, and that people with incomes of $1 million or more pay the full cost of Medicare premiums without any federal subsidy.

Rep. Matt Gaetz, R-Fla., said during the hearing that the proposed changes are based on math rather than Tea Party politics, as some have alleged.

The Republican spending outline also assumes the government will do better at recouping or avoiding improper payments. The proposal said that there was $59.7 billion in improper Medicare payments in in the last fiscal year, and $36.3 billion in improper Medicaid payments. The outline assumes future improper payments will be 50% lower than today’s levels.

Rep. Debbie Wasserman-Schultz, D-Fla., introduced an amendment that would have changed the resolution so that it no longer assumed American Health Care Act changes would be future law, citing the Senate bill’s collapse this week.

But every Republican present on the committee voted against the amendment. “This is the official position of the House on repeal and reform efforts,” said Rep. Bill Johnson, R-Ohio.

The budget resolution also includes a reduction in health spending of $43.9 billion over 10 years, the CBO estimate of how much the malpractice reform bill that passed the House would save.

Ranking Member John Yarmuth, D-Ky., called the budget disgraceful and others called the cuts to Medicare, Medicaid and food stamps draconian, several Republicans worried what it envisions might not come to pass.

“We might fail to achieve savings in mandatory spending,” which includes Medicaid and Medicare, Johnson said, noting that the budget resolution might make it harder to pass tax reform in the Senate.

The first hurdle, however, is for the resolution to pass the entire House of Representatives.

Senate Republicans still at impasse after late-night health care meeting

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http://www.politico.com/story/2017/07/19/trump-congress-no-recess-health-care-240718

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A key group of Senate Republicans met late into the night Wednesday to try to salvage their health care bill, but emerged without any breakthroughs and still appeared far from finding the votes to repeal Obamacare.

Still, as GOP senators left the nearly three-hour meeting, they professed optimism.

The Republicans initially planned to bring in chiefs of staff and health care wonks to advance the negotiations. White House Chief of Staff Reince Priebus was expected to join and help push the disagreeing GOP senators to yes.

But as the senators kept talking, they reevaluated their plan and decided not to allow staff in and keep the room to members only. Priebus strolled out of Sen. John Barrasso’s office, as did White House legislative director Marc Short. The senators would keep talking amongst themselves.

Talks “narrowed down to try to figure out what is causing members not to be able to vote in favor or problems they have with the bill,” said Sen. Jerry Moran (R-Kan.), who opposes the GOP’s latest repeal and replace draft. “It had merit and it’s something that should have been taking place.”

Added Sen. John Kennedy (R-La.): “We’re at our best when we’re among ourselves.”

As the night dragged on, however, Republicans cited good progress but nothing to suggest they had overcome the obstacles that have stymied their previous efforts.

At least 20 Republicans, including leadership allies, moderates and conservatives, worked through the party’s myriad disagreements over Medicaid, coverage numbers, lowering premiums and cutting regulations.

Health and Human Service Secretary Tom Price and top Medicaid official Seema Verma were in the room too. And earlier at the White House, senators and administration officials discussed adding billions more to help states worried about Medicaid cuts under the bill.

Yet the conversation among senators focused on the broad contours of the issues.

“We weren’t getting into the specifics,” said Sen. Dan Sullivan (R-Alaska). “We weren’t tossing around numbers.”

Indeed, senators left uncertain of how a planned vote will go next week, or whether it should even occur while Sen. John McCain (R-Ariz.) is being treated for cancer.

Senate Majority Leader Mitch McConnell (R-Ky.) has pledged to hold a vote next week, but with McCain gone and Sens. Rand Paul (R-Ky.) and Susan Collins (R-Maine) opposing the repeal and replace plan and not even attending the meeting, success appears far off. Republicans said privately they doubt McCain will be back next week.

“Hard to say [if we’re closer]. I’m fine voting next week,” said Sen. Pat Toomey (R-Pa.). McCain’s absence “does complicate things. And I just don’t know if he’s going to be back.”

Privately, senators doubted they could get the 50 votes together for a health care overhaul despite the productive meeting. There was a feeling that while a session that occasionally turned into venting was therapeutic, the challenges facing the fractious 52-member majority may be too great to bridge.

“You understand the math. It just makes things kind of more difficult,” said Sen. Bob Corker (R-Tenn.).

“We do have work to do to get to a vote of 50,” Barrasso said.

The meeting followed a gathering with President Donald Trump, who ordered senators to stay in Washington until they pass a bill to repeal and replace the 2010 health law. Barrasso said the meeting was planned before the White House lunch.

But with a new flicker of optimism, GOP leaders are still pushing for a way to advance a health bill next week even after two different repeal plans fell apart. Republican senators left a health care meeting at the White House Wednesday sounding more optimistic that they could revive their bill to replace the Affordable Care Act.

“We’re discussing that,” Senate Majority Whip John Cornyn (R-Texas) said when asked whether some version of the Better Care Reconciliation Act was coming back. “I’m more optimistic that that would be the case. But if there’s no agreement, then we’ll still vote on the motion to proceed but it’ll be to the 2015 just-repeal bill.”

“We have at least momentum. Before there was none,” said Sen. Bill Cassidy (R-La.).

Sens. Mike Lee (R-Utah) and Paul say the bill isn’t conservative enough, making it difficult for McConnell to get the 50 votes he needs. And it was unclear if billions more for Medicaid will be enough to move the moderate holds outs, with one senator saying there’s an “outside chance” of success next week. At the White House Trump, the senator said, was more effective than he’s been on healthcare in weeks.

The Senate GOP’s latest attempt to craft a replacement for Obamacare fell apart earlier this week, as four Republican senators announced that they would oppose the current version of the bill. But Cornyn told reporters following the White House meeting that about 40 members of the GOP conference are prepared to vote on any health care deal replacing Obamacare, and the “differences are narrowing.” Trump also sounded a note of optimism during the meeting.

But centrist GOP senators like Sens. Rob Portman (R-Ohio) and Sen. Shelley Moore Capito (R-W.Va.) are not happy about future reductions to Medicaid spending, worried it would kick hundreds of thousands of their constituents off healthcare. GOP leaders threw more than $100 billion to lower premiums and fight drug addiction into the bill, but thus far it hasn’t been enough.

Cornyn said a key procedural vote to take up legislation will be held regardless of whether it will succeed. McConnell, speaking to reporters after the White House meeting, said he expected to be able to at least proceed to the bill.

But three Senate Republicans — Sen. Lisa Murkowski of Alaska, Capito and Collins — said they would oppose proceeding to a repeal-only measure on Tuesday, effectively tanking the prospects that a floor debate over getting a straight repeal of Obamacare can even begin.

And some key holdouts said their position is unchanged. Portman, who is undecided on a procedural vote but has signaled opposition to a repeal-only bill, said the legislation needs “to do more to show low-income people that they have options” and said the vote next week will fail unless those improvements were made.

Capito said she’ll still vote no on proceeding to a bill unless there’s a replacement plan she supports.

“The president emphasized repeal and replace. We’re still working on it. It’s moved a lot farther in terms of where it was in terms of congealing,” Capito said.

Murkowski said she wasn’t even sure what they would be voting on.

“It’s not clear whether there will be a motion to proceed to this repeal and replace. I think that’s still under consideration. There will be a vote on something that much is certain,” she said, adding that it was hard to answer “unless you know what the question is.”

Collins said she was not invited to the meeting and wouldn’t be attending.

“I guess it’s open invitation but I didn’t know that until it was brought up at the White House. I’m unfortunately committed to something else,” she said.

Earlier at the lunch, Trump said he was surprised to see his “friends” — “They might not be very much longer,” he quipped — oppose Senate GOP leaders’ plan.

Trump singled out Dean Heller, who is widely considered the GOP’s most vulnerable incumbent in 2018, suggesting he was once worried but is now confident the Nevada senator will come around to supporting a replacement bill.

“Look,” Trump told the room of Republicans, “he wants to remain a senator, doesn’t he? OK? And I think the people of your state, which I know very well, I think they’re gonna appreciate what you hopefully will do.”

A chuckling Heller said as he returned to the Capitol that those comments were “President Trump being President Trump.” And after the late-night Senate meeting, Heller seemed a bit more optimistic.

“It was probably one of the most productive meetings I’ve been to in a long time,” Heller said. “We have some real honest brokers in there who are really trying to solve the problem.”