http://www.politico.com/story/2017/05/24/cbo-obamacare-repeal-health-care-238795
Here are some key facts and figures from the new CBO report on the American Health Care Act, the House-passed bill to repeal and replace Obamacare. CBO stressed the uncertainty of its estimates, given that it’s hard to know which states would take up the chance to opt out of certain key parts of Obamacare. All figures are for the decade spanning 2017-2026 unless otherwise specified.
The recent passage by the U.S. House of Representatives of the American Health Care Act, will affect all hospitals to some degree, but none more than safety net hospitals, which treat a large percentage of poor patients.
Why? Because a much larger percentage of their revenue depends on reimbursement from Medicaid, which expanded under the ACA, but is targeted for the majority of cuts under the AHCA.
John Haupert is not just CEO of Grady Health System, the $917 million (operating revenue) Atlanta safety-net health system. He’s also the board chair of America’s Essential Hospitals, the 275-member safety net hospital association.
In the wake of the House’s passage of the AHCA, and in anticipation of the Senate’s upcoming consideration of the Republican bid for repeal and replacement of the Affordable Care Act, HealthLeaders spoke with Haupert about his thoughts on the bill (or its Senate version) and the effects it could have on hospitals and health systems like Grady.
Following is a lightly edited transcript of that conversation.
Healthcare Triage News: The Advantages of Medicare Advantage
Many studies have demonstrated what economics theory tells us must be true: When consumers have to pay more for their prescriptions, they take fewer drugs. That can be a big problem. This is Healthcare Triage News.
Republicans Race The Clock On Health Care — But The Calendar Is Not Helping
Back in January, Republicans boasted they would deliver a “repeal and replace” bill for the Affordable Care Act to President Donald Trump’s desk by the end of the month.
In the interim, that bravado has faded as their efforts stalled and they found out how complicated undoing a major law can be. With summer just around the corner, and most of official Washington swept up in scandals surrounding Trump, the health overhaul delays are starting to back up the rest of the 2018 agenda.
One of the immediate casualties is the renewal of the Children’s Health Insurance Program. CHIP covers just under 9 million children in low- and moderate-income families, at a cost of about $15 billion a year.
Funding for CHIP does not technically end until Sept. 30, but it is already too late for states to plan their budgets effectively. They needed to know about future funding while their legislatures were still in session, but, according to the National Conference of State Legislatures, the local lawmakers have already adjourned for the year in more than half of the states.
“If [Congress] had wanted to do what states needed with respect to CHIP, it would be done already,” said Joan Alker of the Georgetown Center for Children and Families.
“Certainty and predictability [are] important,” agreed Matt Salo, executive director of the National Association of Medicaid Directors. “If we don’t know that the money is going to be there, we have to start planning to dismantle things early, and that has a real human toll.”
In a March letter urging prompt action, the Medicaid directors noted that while the end of September might seem far off, “as the program nears the end of its congressional funding, states will be required to notify current CHIP beneficiaries of the termination of their coverage. This process may be required to begin as early as July in some states.”
CHIP has long been a bipartisan program — one of its original sponsors is Sen. Orrin Hatch (R-Utah), who chairs the Finance Committee that oversees it. It was created in 1997, and last reauthorized in 2015, for two years. But a Finance hearing that was intended to launch the effort to renew the program was abruptly canceled this month, amid suggestions that Republicans might want to hold the program’s renewal hostage to force Democrats and moderate Republicans to make concessions on the bill to replace the Affordable Care Act.
“It’s a very difficult time with respect to children’s coverage,” said Alker. Not only is the future of CHIP in doubt, but also the House-passed health bill would make major cuts to the Medicaid program, and many states have chosen to roll CHIP into the Medicaid program.”
“We’ve just achieved a historic level in coverage of kids,” she said, referring to a new report finding that more than 93 percent of eligible U.S. children now have health insurance under CHIP. “Now all three legs of that coverage stool — CHIP, Medicaid and ACA — are up for grabs.”
But it’s not just CHIP at risk due to the congested congressional calendar. Congress also can’t do the tax bill Republicans badly want until lawmakers wrap up the health bill.
That is because Republicans want to use the same budget procedure, called reconciliation, for both bills. That procedure forbids a filibuster in the Senate and allows passage with a simple majority.
There’s a catch, though. The health bill’s reconciliation instructions were part of the fiscal 2017 budget resolution, which Congress passed in January. Lawmakers would need to adopt a fiscal 2018 budget resolution in order to use the same fast-track procedures for their tax changes.
And they cannot do both at the same time. “Once Congress adopts a new budget resolution for fiscal year 2018,” said Ed Lorenzen, a budget-process expert at the Committee for a Responsible Federal Budget, that new resolution “supplants the fiscal year 2017 resolution and the reconciliation instructions in the fiscal year 2017 budget are moot.”
That means if Congress wanted to continue with the health bill, it would need 60 votes in the Senate, not a simple majority.
There is, however, a loophole of sorts. Congress “can start the next budget resolution before they finish health care,” said Lorenzen. “They just can’t finish the new budget resolution until they finish health care.”
So the House and Senate could each pass its own separate budget blueprint, and even meet to come to a consensus on its final product. But they cannot take the last step of the process — with each approving a conference report or identical resolutions — until the health bill is done or given up for dead. They could also start work on a tax plan, although, again, they could not take the bill to the floor of the Senate until they finish health care and the new budget resolution.
At least that’s what most budget experts and lawmakers assume. “There’s no precedent to go on,” said Lorenzen, because no budget reconciliation bill has taken Congress this far into a fiscal year. “So nobody really knows.”
http://www.beckershospitalreview.com/finance/trump-s-4-1-trillion-budget-9-healthcare-takeaways.html
President Donald Trump’s first full budget proposal will include $3.6 trillion in spending cuts to balance the budget in the next decade.
Although the full $4.1 trillion budget plan, titled “A New Foundation for American Greatness,” will be released Tuesday, Office of Management and Budget Director Mick Mulvaney briefed White House reporters Monday on the budget.
Here are nine of the key proposals related to healthcare in President Trump’s budget proposal for fiscal year 2018, which begins Oct. 1.
1. Medicaid cuts. President Trump’s budget includes $610 billion in Medicaid cuts over 10 years. The reduction is in addition to the $839 billion pulled from Medicaid under the proposed American Health Care Act, the ACA repeal and replacement bill that phases out Medicaid expansion, according to The Hill.
2. Repeal and replace the ACA. The budget assumes passage of the AHCA. The Trump administration expects to save $250 billion over 10 years by repealing and replacing the ACA. These savings are in addition to the $610 billion in proposed Medicaid cuts in the budget, according to The New York Times.
3. Medicare unscathed. The budget makes no changes to the Medicare program or to core Social Security benefits, two programs President Trump vowed during his campaign to leave alone, according to The Hill.
4. Reduction in CHIP funding. Under the budget, $5.8 billion would be cut from the Children’s Health Insurance Program over 10 years, according to a budget document posted by The Washington Post.
5. NIH funding cut. Under the budget proposal, the National Institutes of Health budget would be reduced from $31.8 billion to $26 billion, according to The Washington Post.
6. Cuts to CDC funding. Several CDC programs would be hit with cuts under the budget proposal. One of the biggest cuts is to the agency’s chronic disease prevention programs, which would have funding reduced by $222 million, according to The Washington Post.
7. Veterans Choice Program extended. The budget calls for extension of the Veterans Choice Program, which allows veterans to go outside of the Veterans Affairs system for care. Under the budget, $29 billion more would be spent on this program over 10 years, according to The New York Times.
8. Medical malpractice limits. The budget includes medical malpractice reforms, such as capping awards for noneconomic damages, that are intended to reduce the practice of defensive medicine. The Trump administration expects these changes to save Medicare $31 billion over a decade, according to The New York Times.
9. Funds substance abuse treatment. The budget would allocate $500 million to expand access to treatments, including medication-assisted treatment, for those suffering from opioid addiction. The budget also includes $1.9 billion in block grants for states to use for substance abuse treatment and $25 million for the Substance Abuse and Mental Health Services Administration for expanding access to critical interventions. SAMHSA would also receive an additional $24 million to equip first responders with overdose reversing drugs.
Despite criticism over his initial proposal in March that included huge cuts to the Department of Health and Human Services, National Institutes of Health and Centers for Disease Control and Prevention, President Trump’s fleshed-out 2018 budget will slash billions from those health programs in order to spend more on the military and cover planned tax cuts.
The full budget plan is due to be released this morning at 11 a.m., but the White House administration inadvertently posted the section (PDF) that dealt with cuts to the HHS late Monday before it quickly took it offline.
In addition to a proposal to eliminate $800 billion from Medicaid, the Trump administration wants to make deep cuts to other health programs, including:
Senate Republicans are showing early divisions over what to do about ObamaCare’s protections for people with pre-existing conditions.
Some conservatives, including Sen. Mike Lee (R-Utah), want to simply repeal those provisions and other ObamaCare regulations and leave them up to the states.
But advocates of a more centrist approach, like Sen. Bill Cassidy (R-La.), are speaking out in favor of pre-existing condition protections and endorsing a “Jimmy Kimmel test” for the bill, where no one can be denied coverage.
Other senators are exploring a middle ground where states would have to automatically enroll people in health insurance before they could get a waiver for the regulations, though conservatives object to that idea as Washington overreach.
The disagreements over what to do about preexisting conditions point to the larger difficulty facing Senate Republicans as they seek to find consensus on a host of contentious issues in the healthcare bill.
Last Thursday, fifteen states and the District of Columbia moved to intervene in House v. Price, the case about the ACA’s cost-sharing reductions. At the same time, they asked the court to hear the case promptly.
This is a bigger deal than it may seem, and could offer some comfort to insurers that are in desperate need of it. Apologies for the long post, but the law here is complex and uncertain.
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When the House of Representatives sued the Obama administration a few years back, it argued that Congress never appropriated the money to make cost-sharing payments. The district court sided with the House and entered an injunction prohibiting the payments. The court, however, puts its injunction on hold to allow for an appeal.
The Trump administration has now inherited the lawsuit, and the health-care industry is waiting on tenterhooks to see what it will do. For now, the case has been put on hold. But if Trump drops the appeal, which he has threatened to do, the injunction would spring into effect and the cost-sharing payments would cease immediately, destabilizing insurance markets across the country. It’s the nuclear option.
If the states are allowed to intervene, however, they could pursue the appeal even if Trump decides to drop it. With the appeal in place, the injunction couldn’t take effect until the case is heard and decided.
What’s more, the states are very likely to prevail. Not on the merits: as I’ve written before, the House is right that there’s no appropriation to make the cost-sharing payments. But the D.C. Circuit is likely to be skeptical of the district court’s conclusion that the House of Representatives has standing to sue. That’s why the states want to court to decide the case quickly: they hope to get rid of the lawsuit once and for all.
Allowing the states to intervene would not eliminate uncertainty. The D.C. Circuit could always surprise us and affirm the district court’s decision. Premiums for 2018 would still have to rise in response to the risk that payments might stop sometime next year. And even if the House loses, the Trump administration might be tempted to stop making the payments anyhow—although it’s not clear that it has the legal authority to do so without going through the cumbersome process of withdrawing an Obama-era rule.
Still, insurers could breathe a bit easier. If the states are allowed to intervene, Trump couldn’t blow up the individual markets in a fit of pique.
Pre-existing Conditions and Medical Underwriting in the Individual Insurance Market Prior to the ACA
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Before private insurance market rules in the Affordable Care Act (ACA) took effect in 2014, health insurance sold in the individual market in most states was medically underwritten.1 That means insurers evaluated the health status, health history, and other risk factors of applicants to determine whether and under what terms to issue coverage. To what extent people with pre-existing health conditions are protected is likely to be a central issue in the debate over repealing and replacing the ACA.
This brief reviews medical underwriting practices by private insurers in the individual health insurance market prior to 2014, and estimates how many American adults could face difficulty obtaining private individual market insurance if the ACA were repealed or amended and such practices resumed. We examine data from two large government surveys: The National Health Interview Survey (NHIS) and the Behavioral Risk Factor Surveillance System (BRFSS), both of which can be used to estimate rates of various health conditions (NHIS at the national level and BRFSS at the state level). We consulted field underwriting manuals used in the individual market prior to passage of the ACA as a reference for commonly declinable conditions.
Pre-ACA Market Practices Provide Lessons for ACA Replacement Approaches
Significant changes to the Affordable Care Act (ACA) are being considered by lawmakers who have been critical of its general approach to providing coverage and to some of its key provisions. An important area where changes will be considered has to do with how people with health problems would be able to gain and keep access to coverage and how much they may have to pay for it. People’s health is dynamic. At any given time, an estimated 27% of non-elderly adults have health conditions that would make them ineligible for coverage under traditional non-group underwriting standards that existed prior to the ACA. Over their lifetimes, everyone is at risk of having these periods, some short and some that last for the rest of their lives.
One of the biggest changes that the ACA made to the non-group insurance market was to eliminate consideration by insurers of a person’s health or health history in enrollment and rating decisions. This assured that people who had or who developed health problems would have the same plan choices and pay the same premiums as others, essentially pooling their expected costs together to determine the premiums that all would pay.
Proposals for replacing the ACA such as Rep. Tom Price’s Empowering Patients First Act and Speaker Paul Ryan’s “A Better Way” policy paper would repeal these insurance market rules, moving back towards pre-ACA standards where insurers generally had more leeway to use individual health in enrollment and rating for non-group coverage.1 Under these proposals, people without pre-existing conditions would generally be able to purchase coverage anytime from private insurers. For people with health problems, several approaches have been proposed: (1) requiring insurers to accept people transitioning from previous coverage without a gap (“continuously covered”); (2) allowing insurers to charge higher premiums (within limits) to people with pre-existing conditions who have had a gap in coverage; and (3) establishing high-risk pools, which are public programs that provide coverage to people declined by private insurers.
The idea of assuring access to coverage for people with health problems is a popular one, but doing so is a challenge within a market framework where insurers have considerable flexibility over enrollment, rating and benefits. People with health conditions have much higher expected health costs than people without them (Table 1 illustrates average costs of individuals with and without “deniable” health conditions). Insurers naturally will decline applicants with health issues and will adjust rates for new and existing enrollees to reflect their health when they can. Assuring access for people with pre-existing conditions with limits on their premiums means that someone has to pay the difference between their premiums and their costs. For people enrolling in high-risk pools, some ACA replacement proposals provide for federal grants to states, though the amounts may not be sufficient. For people gaining access through continuous coverage provisions, these costs would likely be paid by pooling their costs with (i.e., charging more to) other enrollees. Maintaining this pooling is difficult, however, when insurers have significant flexibility over rates and benefits. Experience from the pre-ACA market shows how insurers were able to use a variety of strategies to charge higher premiums to people with health problems, even when those problems began after the person enrolled in their plan. These practices can make getting or keeping coverage unaffordable.
The discussion below focuses on some of the issues faced by people with health issues in the pre-ACA non-group insurance market. These pre-ACA insurance practices highlight some of the challenges in providing access and stable coverage for people and some of the issues that any ACA replacement plan will need to address. Many ACA replacement proposals have not yet been developed in sufficient detail to fully deal with these questions, or in some cases may defer them to the states.
We start by briefly summarizing key differences between the ACA and pre-ACA insurance market rules for non-group coverage that affect access and continuity of coverage. We then focus on pre-ACA access and continuity issues for three different groups: (1) people transitioning from employer coverage or Medicaid to the non-group market; (2) people with non-group coverage who develop a health problem; and (3) people who are uninsured (are not considered to have continuous coverage) who want to buy non-group coverage. After that, we discuss how medical underwriting and rating practices can segment a risk pool, initially and over time, and challenges that this poses for assuring continuous coverage. We end by reviewing some of the policy choices for addressing the challenges that have been raised.
HENRY KOTULA 