Tag Archives: Individual Mandate

Push for return to ACA repeal

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Affordable Care Act highlighted

While lawmakers’ most pressing priority right now is to prevent a government shutdown, it’s not too early to start asking: Is the push to repeal the Affordable Care Act over?

The answer to that question, however, depends upon which Republican you ask.

Senate Majority Leader Mitch McConnell has said that while he wants to unwind more of the healthcare law, he’s doubtful that Republicans will have enough votes to do so now that their majority has gotten even slimmer.

But others on the right are pushing to keep the repeal effort alive. Majority Whip Steve Scalise, R-La., said Tuesday that one of the GOP’s major goals this year is to tackle welfare reform, but “then we’re going to have to work on healthcare again.”

“Look, I’m for repealing and replacing Obamacare,” he said during an interview with Fox & Friends, later adding, “So let’s get back to work on some of those things—like what we passed in the House, that almost passed in the Senate—so that we can get our healthcare system working again [and] rebuild the private marketplace.”

The GOP is also facing external pressure. A collection of conservative groups known as the “Repeal Coalition” sent a letter Tuesday to President Donald Trump, saying that now that he’s reformed the tax code, he now must “deliver on the rest of the promises made to the American people to free them from the shackles of Obamacare.”

Thus, the letter said, healthcare reform must be the focus of lawmakers’ budget reconciliation instructions for 2019. The Trump administration must also help the Senate and the House “design a bill that can muster the votes needed for passage of true health reform,” it added.

Whichever path that Republicans choose to take regarding the ACA this year, however, they will do so without a veteran senator who has played a major role in healthcare policymaking. Sen. Orrin Hatch, R-Utah, announced Tuesday that he will not run for an eighth term.

Hatch, who chairs the Senate Finance Committee, has opposed the ACA and criticized a bill drafted by Republican Sen. Lamar Alexander and Democratic Sen. Patty Murray that was designed to stabilize the law. In fact, he floated an alternative to the Alexander-Murray bill that would both temporarily fund cost-sharing reduction payments and ax the individual and employer mandates. Ultimately, he helped repeal the individual mandate via the GOP’s tax reform package.

Hatch also has a history of bipartisanship, however. He was often forced to work with Democratic Sen. Ted Kennedy when they led what is now known as the Health, Education, Labor and Pensions Committee, according to The Salt Lake Tribune. One of their biggest achievements was creating the Children’s Health Insurance Program—though that program is now on shaky ground since Congress let federal funding for it lapse last fall and has since failed to reauthorize it.

 

 

From premiums to politics: 5 predictions for the health insurance industry in 2018

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Businessman uses a crystal ball

After the demise of two major insurer mergers and multiple Affordable Care Act repeal attempts, few could argue that 2017 wasn’t an eventful year for the health insurance industry.

But 2018 is shaping up to be just as interesting—complete with more political wrangling, M&A intrigue and evidence that, despite all this uncertainty, insurers are pushing ahead and embracing innovation.

Read on for our predictions about what’s in store for the industry in the coming months.

1. The CVS-Aetna deal will have a domino effect in the healthcare industry

While the lines between payer, provider and pharmacy benefits manager have been blurring for a while now, CVS’ $69 billion deal to purchase Aetna is undoubtedly a game-changer.

The move was likely motivated by a desire to compete with UnitedHealth’s thriving Optum subsidiary, which has its own PBM and an increasing presence in care delivery. So it stands to reason that other major insurers will try to strike deals of their own that mimic that scale and level of diversification.

Already, Humana has made a bid to purchase part of hospice- and home-health giant Kindred Healthcare. There’s also been speculation that it is preparing to be acquired—possibly by Cigna, or in a deal that would mimic CVS-Aetna, Walmart or Walgreens.

Other insurers may also seek to build PBM capabilities, following in the footsteps of UnitedHealth, a combined CVS-Aetna and Anthem, which announced in October that it would team up with CVS to create an in-house PBM called IngenioRx.

It’s certainly possible, however, that CVS’ purchase of Aetna will not pass regulatory muster. While it would require less divestment than the ill-fated Anthem-Cigna and Aetna-Humana deals, the DOJ’s decision to block another vertical deal—between AT&T and Time Warner—doesn’t bode well for its chances.

2. Republicans and Democrats will be forced to work together on ACA fixes

With one less Republican senator—thanks to Alabama’s election of Democrat Doug Jones—the GOP likely won’t have the votes to pass a repeal bill without bipartisan support. Senate Majority Leader Mitch McConnell acknowledged as much before Congress’ holiday recess, though he clarified the next day that he would be happy to pass an ACA repeal bill if there are enough votes for it.

McConnell also owes Sen. Susan Collins, R-Maine, as he had promised her he’d pass her reinsurance bill and a bill that would fund cost-sharing reduction payments this year. While Collins held up her end of the bargain—voting for the GOP tax bill—the ACA fixes didn’t make it into the stopgap spending bill Congress passed on Dec. 21.

Democrats, meanwhile, will also be motivated to reach across the aisle. The repeal of the individual mandate will likely put the ACA on more unstable footing, lending more urgency than ever to the task of shoring up the exchanges.

Both parties will also likely face pressure from the healthcare industry’s biggest lobbying groups to get some sort of ACA fix passed. The push to do so, however, will be complicated by the full slate of legislative priorities Congress is facing in the new year, including reauthorizing funding for the Children’s Health Insurance Program.

3. There will be more premium hikes and insurer exits in the individual market

The individual mandate is now gone, and arguments about its effectiveness aside, that was one of the mechanisms that encouraged healthy people to buy insurance and stay covered. Even if the effect on coverage levels is minimal, the move is probably going to be enough to push risk-averse insurers to raise rates and even exit more rating areas in 2019.

There is also little indication that large insurers that have exited will come back anytime soon. After all, why invest resources in an unstable market when there are far more steady and lucrative markets like Medicare Advantage?

Adding to the policy uncertainty for the remaining insurers, there is no guarantee that Congress will authorize short-term funding for cost-sharing reduction payments. Many insurers raised their 2018 rates to account for the possibility of them disappearing—which turned out to be a wise move—so it stands to reason they’d have to do the same for 2019.

Perhaps the best harbinger of what’s to come came from a study conducted in November, which noted that the actions insurers and state regulators took to fill in “bare counties” on the ACA exchanges are “temporary and unsustainable without long-term federal action.” And with Republicans in charge, federal action to patch up the exchanges is unlikely.

4. Federal agencies will start to carry out Trump’s executive order—and states will push back

Although it was overshadowed by all the repeal-and-replace drama, Trump’s healthcare-focused executive order has huge implications for the industry. Put simply, it paves the way for expanded use of association health plans, short-term health plans and employer-based health reimbursement arrangements.

In 2018, we’re likely to see the relevant agencies start issuing rules to implement the order, which could dramatically change the individual market as we know it—and not for the better. Such rulemaking would also set the stage for a power struggle between the federal government and left-leaning states.

In fact, a coalition of healthcare organizations have urged state insurance commissioners to take steps to override any rules resulting from the executive order. For example, states could restore the three-month limit on short-term health plans if agencies unwind that Obama-era rule on the federal level.

Since only certain states are likely to heed these suggestions, the upshot of Trump’s executive order will be to create a patchwork of individual market rules across the country. If that sounds strangely like what the individual insurance markets were like before the ACA, well, that’s precisely the point.

5. Payers’ move to value-based payment models will continue, with or without the feds leading the way

On the one hand, the Trump administration clearly wants to scale back the federal government’s role in pushing payers and providers away from fee-for-service payment models. The surest sign was CMS’ announcement late last year that it would endmandatory bundled payment models for hip fractures and cardiac care.

Some have worried that moving away from those mandatory programs would be a setback for the move to value-based payments, given that the feds play a powerful role in galvanizing the industry to change. In addition, the administration wants to take the Center for Medicare and Medicaid Innovation in a “new direction”—one that CMS Administrator Seema Verma said would “move away from the assumption that Washington can engineer a more efficient healthcare system from afar.”

But even if the federal government will take a lighter touch in the move from volume to value, it’s not likely that the private sector will take that as a cue to reverse course. On the payer side, especially, too many industry-leading companies have invested heavily in alternative payment models to turn back now. And they have compelling business reasons to keep investing in those models, given their potential to lower costs and improve care quality.

 

Top 10 health care surprises of 2017

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https://www.politico.com/story/2017/12/30/trump-health-care-surprises-248996

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President Donald Trump stormed into office last January confident that he could knock off Obamacare in a nanosecond. It didn’t turn out that way — and from drug prices to the Tom Price travel scandal, a lot of health policy didn’t go according to plan. Here’s a look at 10 health care surprises from 2017.

1. Obamacare survives its seventh year

In control of the White House and both chambers of Congress, Republicans had their best shot ever at Obamacare repeal — and even thought they could have it on Trump’s desk on Inauguration Day. The grand ambitions quickly met roadblocks. Members rebelled over policy details, GOP leaders struggled to find consensus, moderates mutinied, and virtually the entire health care industry — along with Democrats and Obamacare advocates — lined up against every plan that Republicans put forward.

Even so, the GOP eventually squeaked a bill through the House and after several false starts put a proposal on the Senate floor. That’s when Sen. John McCain (R-Ariz.) delivered perhaps the biggest stunner of the year: a late-night thumbs-down that sunk the Senate bill and effectively ended the GOP’s repeal effort … until 2018.

Still, Senate Republicans concede that with an even narrower vote margin, dismantling Obamacare may become, as Sen. Ron Johnson (R-Wis.) delicately put it, “a little more difficult.”

2. Price jets away from HHS

After years of railing against Obamacare as a member of Congress, Tom Price finally got a chance to do something about it as Health and Human Services secretary. The former orthopedic surgeon would aid Republicans’ effort to repeal the law while simultaneously unraveling Obamacare’s web of regulations. He fell short on both counts. Price all but disappeared during the Senate’s bid to craft a repeal bill, frustrating Republicans and, more importantly, the president. Soon after, POLITICO revealed that he had routinely traveled by chartered private or military aircraft, costing taxpayers $1 million.

The scrutiny over his travel habits, combined with Trump’s irritation on Affordable Care Act repeal, sped Price’s resignation seven months into the job. He left few tangible accomplishments — other than the distinction of being the first Cabinet member to make his exit.

3. Tough talk and no action on drug prices

Trump lobbed insults at a host of health care targets, but perhaps none landed with more rhetorical force than his denunciations of the “disastrous” drug industry.

“The drug companies, frankly, are getting away with murder,” he seethed early on, suggesting he might empower Medicare to negotiate with pharmaceutical companies.

It didn’t happen. For all of Trump’s tough talk, he’s made no concrete moves toward cracking down on pharmaceutical prices. A promised executive order never materialized — and a leaked draft of the directive appeared largely pharma-friendly anyway.

In November, Trump nominated Alex Azar, a former pharmaceutical executive, to serve as his next HHS secretary. Azar has already rejected sweeping changes to rein in drug prices, like allowing drug reimportation or giving Medicare greater negotiating power. The administration’s agenda on drug prices now looks smaller, more traditional, and far less of a threat to the pharmaceutical industry.

4. GOP kills the individual mandate — in a tax bill

For all their failures on repealing and replacing Obamacare, Republicans did land a major blow — it just took a tax bill to get the job done. The GOP’s sweeping tax overhaul zeroes out the penalty levied on most people for not purchasing insurance starting in 2019, effectively gutting Obamacare’s individual mandate.

Republicans had long made the mandate a top target for repeal. But it’s also a pillar of the health law — the mechanism that Obamacare supporters contend is crucial to keeping enough healthy people in the market to stabilize premiums.

Yet, in a twist, Senate Republicans who months earlier proved too skittish to dismantle Obamacare jumped at the chance to eliminate the mandate, despite Congressional Budget Office projections that it would drive up premiums 10 percent and leave 13 million more people uninsured over the next decade.

With just 12 days left in a year they’d vowed was Obamacare’s last, Republicans passed their tax bill — and in the process, made their only major legislative change to the health law.

5. Planned Parenthood’s funding goes untouched

The GOP’s sweep into power also placed Republicans on the verge of accomplishing a second top health care goal: defunding Planned Parenthood. Once again, Republicans found themselves foiled by their own members. Moderate Sens. Lisa Murkowski (R-Alaska) and Susan Collins (R-Maine) used their leverage as Senate swing votes to protect the funding of an organization they ardently support.

When McCain joined them in voting down repeal in July, it also put the defunding efforts on hold indefinitely. And now facing only a two-vote advantage in the Senate in 2018, it’s unclear whether the GOP can find the political will to take federal action against Planned Parenthood.

6. The vaccine controversy that never was

When high-profile vaccine skeptic Robert Kennedy Jr. traveled to New York in January to meet with Trump, it looked like the start of a controversial plan to boost the scientifically disproved theory that vaccines can cause autism. Trump had previously suggested vaccines could be dangerous, and Kennedy emerged from Trump Tower touting plans to chair “a commission on vaccine safety and scientific integrity” at the president-elect’s behest.

“President-elect Trump has some doubts about the current vaccine policies and has questions about it,” Kennedy said.

But Trump’s team never confirmed Kennedy’s assertions, and after Inauguration Day any momentum for a vaccine commission appeared to fizzle out. The chiefs of the administration’s Food and Drug Administration, Centers for Disease Control and Prevention and National Institutes of Health all advocate for vaccines, and there hasn’t been a peep from the White House so far about taking any close look at vaccine safety beyond the normal regulatory oversight.

7. Single payer gets serious

At this time last year, single-payer health care was a progressive pipe dream. Now it’s a rallying point for liberal Democrats, a possible litmus test for 2020 hopefuls and a serious policy proposal that’s won the backing of nearly a third of the Senate Democratic Caucus.

Sen. Bernie Sanders’ universal health care plan vaulted into the mainstream in September, after high-profile Democrats trying to strike a contrast to the GOP’s Obamacare repeal efforts latched onto the goal of universal coverage.

“Quality health care shouldn’t be the providence of people’s wealth. It should be a virtue of us being United States citizens,” Sen. Cory Booker (D-N.J.), one of several likely 2020 candidates backing the plan, said at the time.

The single-payer push exposed divisions over how exactly to achieve universal coverage, and several Democrats have put forth their own ideas on how to move more gradually. But the shift in the Democratic platform is clear: Three years after Sanders (I-Vt.) failed to win a single co-sponsor for his plan, universal health care is becoming a defining issue for Democrats in the run-up to 2020.

8. Medicaid as a wedge issue

In a year that was supposed to be all about Obamacare, Congress spent much of its time on Medicaid. The GOP’s Obamacare repeal bills all targeted the low-income health insurance program as well. Their proposals would have profoundly changed the nature of Medicaid — not just the expansion that was part of Obamacare but the traditional parts that predated the ACA by decades.

That’s where the GOP’s health care effort hit perhaps its most intense resistance, as Medicaid — traditionally overshadowed by Medicare — suddenly became a third rail. Democrats seized on projections that capping federal funding would drive deep coverage losses and leave the nation’s most vulnerable worse off. State governors on both sides of the aisle warned that the changes would cripple their ability to deliver crucial services. Swing vote Republicans balked at deep cuts at a time when Medicaid offered the first line of defense against the growing opioid epidemic.

That hasn’t stopped the GOP from taking on Medicaid in other ways. The Trump administration is encouraging states to impose work requirements and has made entitlement and welfare reform — both of which could involve Medicaid — a priority for 2018.

9. Shkreli goes to jail over Hillary’s hair

That Martin Shkreli will finish off this year from prison isn’t a surprise — but it’s what put him there that was unexpected.

The former Turing Pharmaceutical CEO, who gained notoriety for hiking the price of an AIDS drug, was convicted of securities fraud in August. But he was living freely while awaiting sentencing until he offered $5,000 on Facebook for a strand of then-presidential candidate Hillary Clinton’s hair. The post qualified as a “solicitation of assault,” a judge ruled, before revoking Shkreli’s bond and sending him to prison.

It’s just one of many strange twists in Shkreli’s saga, which included calling congressmen “imbeciles” on Twitter hours after refusing to answer questions at a House committee hearing; livestreaming on YouTube for hours on end, including right after his conviction; and purchasing the sole copy of a 2015 Wu-Tang Clan album for more than $1 million. He’ll now serve jail time over his request for Clinton’s hair until a mid-January sentencing hearing.

10. Collins, Murkowski play power brokers in the Senate

The most moderate members in a Republican Conference that narrowly controls the Senate, Collins and Murkowski were always going to be crucial players. But GOP leaders may not have anticipated just how much they’d flex that power.

Collins and Murkowski held out throughout the repeal effort over Medicaid cuts and skimpier subsidies they worried would hurt their states — and tanked a top GOP priority. At the end of the day, both voted for the big tax bill, with its individual mandate repeal. Collins got a promise from Senate leaders that two ACA stabilization bills would be included in Congress’ year-end spending agreement — though the bill have been pushed into 2018 and are in trouble, given the House opposition.

With Republicans’ margin in the Senate set to narrow to just 51-49 next year, Collins and Murkowski appear set to exercise even more influence over the party’s direction come 2018.

 

Five key decisions for the GOP on healthcare

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http://thehill.com/policy/healthcare/366528-five-key-decisions-for-the-gop-on-healthcare

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Republicans have repealed ObamaCare’s individual mandate, but they still have a number of decisions to make on health care in the coming year.

Even without the unpopular mandate, the health care law is still largely in effect, with nearly 9 million people enrolled in private plans for 2018.

And beyond ObamaCare, Republicans could seek action on entitlement reform and drug pricing in 2018.

Here are five things to watch out for.

Will Republicans try again to repeal ObamaCare? 

After Republicans failed to act on a seven-year promise to repeal and replace ObamaCare, they assured voters they would return to the issue after passing tax reform.

But now that the tax law is on the books, it’s far from certain that Republicans will make another run at the Affordable Care Act. With the GOP’s Senate majority set to shrink in January, repeal might be off the table for now.

“Well, we obviously were unable to completely repeal and replace with a 52-48 Senate,” Senate Majority Leader Mitch McConnell told NPR on Thursday.

“We’ll have to take a look at what that looks like with a 51-49 Senate. But I think we’ll probably move on to other issues.”

But McConnell could face pressure from more conservative Senate Republicans — and possibly from the House — to revisit health care, no matter how steep the challenge.

“To those who believe — including Senate Republican leadership — that in 2018 there will not be another effort to Repeal and Replace Obamacare — well you are sadly mistaken,” Sen. Lindsay Graham (R-S.C.), author of the most recent repeal bill, tweeted last week.

Will Congress act to stabilize ObamaCare? 

Sens. Susan Collins (R-Maine) and Lamar Alexander (R-Tenn.) have been pushing for a vote on two bipartisan bills to stabilize ObamaCare’s insurance markets, but those efforts were pushed off until next year.

McConnell assured Collins the bills would be attached to a “must-pass” bill by the end of 2017, but that changed as Republicans scrambled to avoid a government shutdown.

Now Senate Republicans are looking to attach the ObamaCare bills to the long-term spending bill that is expected to come up for a vote in January.

But passing the ObamaCare bills is far from certain, with House Republicans demanding the inclusion of Hyde Amendment language to prevent any federal money from going to plans that cover abortions.

House Republicans have also been critical of the overall substance of the bills, arguing they’re a “bail out” of a failing law.

It’s unclear whether House Republicans would support a spending bill that contains the ObamaCare bills, but many have said they definitely won’t if the abortion language isn’t included.

Sen. Mike Rounds (R-S.C.) said Senate Republicans are looking at ways to resolve the issue, and Alexander said he’s optimistic about the bills passing in January.

“We have the president’s renewed interest, more interest from the House, Senate McConnell has renewed his commitment to schedule it and support it, so I think it’s just a matter of when we come back, putting out ideas together and finding a way to get it done,” Alexander told reporters.

Will Republicans try to tackle entitlements?

Speaker Paul Ryan (R-Wis.) has said Republicans should move to entitlement reform next year, citing the need to address the nation’s red ink.

“We’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit,” Ryan told the Ross Kaminsky radio talk show earlier this month.

While there’s broad support in the GOP for taking up welfare reform, changes to entitlement programs like Medicare and Social Security could be a tough sell.

McConnell has noted that a slim Republican majority in the Senate could put broader entitlement reform out of reach.

“The sensitivity of entitlements is such that you almost have to have a bipartisan agreement in order to achieve a result,” McConnell said at a press conference Friday.

“The only time we’ve been able to do that is on a bipartisan basis, and it was a long time ago.”

Entitlement cuts could also be politically dangerous for Republicans leading into the 2018 midterms.

Will Trump try to help ObamaCare? 

Democrats have accused the Trump administration of trying to sabotage ObamaCare by slashing the law’s advertising and outreach budget and cutting open enrollment in half.

But those actions seemed to have a minimal effect on enrollment. The administration said 8.8 million people signed up for coverage in the exchanges this year, which is only a slight drop from the 9.2 million people who signed up last year.

Democrats say these numbers show the resiliency of the law.

“[The] enrollment numbers make clear that the American people want access to high quality, affordable health insurance coverage, and they want Congress and the Administration to stop playing games with our health care system,” said Rep. Frank Pallone (D-N.Y.), ranking member of the House Energy & Commerce Committee.

Trump indicated on Tuesday that his administration still intends on repealing and replacing ObamaCare, however.

“Based on the fact that the very unfair and unpopular individual mandate has been terminated as part of our tax cut bill, which essentially repeals (over time) ObamaCare, the Democrats & Republicans will eventually come together and develop a great new HealthCare plan!”

Will Trump take action on drug prices? 

Trump came out swinging against drug companies when he took office in January, declaring that the industry is getting away with murder, but so far has taken little action on drug prices.

The administration has been preparing an executive order aimed at lowering drug prices since the summer, but critics argue the order would be friendly to drug companies.

Trump has also abandoned campaign promises to allow Medicare to negotiate drug prices and expand importation of cheaper drugs from other countries.

However, Alex Azar, a former drug executive and Trump’s nominee to lead the Department of Health and Human Services, has said that addressing h drug prices will be one of his top priorities if he’s confirmed.

“I believe I can hit the ground running to work with you and others to identify solutions here,” Azar told senators during his confirmation hearing.

 

Health insurer Oscar nears $1 billion in revenue

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https://www.axios.com/oscar-2518896548.html

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Oscar, the healthcare insurance upstart co-founded by Joshua Kushner, tells Axios that it is expecting to generate nearly $1 billion in premium revenue for 2018. That’s up from “more than $300 million” in 2017 premium revenue. It also says that its insurance underwriting business is profitable for the first time, although the overall company remains in the red.

Why it matters: Oscar continues to grow, despite having originally launched to provide health insurance to individuals under an Affordable Care Act that the Trump Administration has been slowly dismantling.

  • More numbers: The company expects around 250,000 members in the individual markets, including in New York and California where open enrollment continues, representing around a 2.5x increase over last year, and doesn’t include Oscar’s recent expansion into employer plans.

Oscar CEO Mario Schlosser tells Axios that he isn’t too concerned about how the new tax bill repeals the ACA’s individual mandate, saying that much of the early instability has dissipated:

“It took a while to figure out how things work, but a lot of people now just have come around to thinking it’s smart to have health insurance. The loss of the mandate will have some impact on some states around country, but it won’t affect the overall stability of the individual markets.”

Oscar’s big marketing pitch is that it leverages technology to provide a more efficient healthcare experience, through such techniques as tele-medicine (25% of Oscar members have used it) and concierge teams that include both nurses and “care guides” (70% have used). It has taken steps to apply this tech-centric approach to the Medicare Advantage market, but tells Axios that it has slowed down those efforts a bit (i.e., no 2018 launch).

 

Moody’s: 3 ways the GOP tax bill will hurt nonprofit hospitals

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https://www.beckershospitalreview.com/finance/moody-s-3-ways-the-gop-tax-bill-will-hurt-nonprofit-hospitals.html

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The Republicans’ tax overhaul plan, which is expected to become law soon, has negative credit implications for nonprofit hospitals and health systems, according to Moody’s Investors Service.

Here are three ways the tax bill will hurt nonprofit hospitals and health systems.

1. The tax bill will repeal the ACA’s individual insurance mandate. This will cause the uninsured population to rise and raise uncompensated care costs, which will negatively affect healthcare organizations’ operating margins and cash flow, according to Moody’s.

2. The tax plan’s limits on tax-exempt refundings is negative for all issuers of tax-exempt debt, including nonprofit hospitals and health systems, as these financings have been used to reduce long-term borrowing costs and take advantage of lower interest rates, according to Moody’s.

3. The tax bill will slash the corporate tax rate to 21 percent from 35 percent. This change has negative implications for nonprofit hospitals and health systems, as it “makes tax-exempt bonds a less attractive investment for banks and other financial institutions, which will weaken demand, especially for direct bank loans and private placements,” according to Moody’s.

No, Trump Hasn’t ‘Essentially Repealed Obamacare’

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https://www.politico.com/magazine/story/2017/12/20/trump-obamacare-mandate-repeal-taxes-216125

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Killing the mandate doesn’t gut the health care law. Most likely, it will muddle along, because the rest of it is broadly popular.

In July and again in September, Republicans narrowly failed to repeal the Affordable Care Act. But their newly passed tax legislation included a provision getting rid of Obamacare’s mandate requiring Americans to buy insurance, and President Donald Trump immediately declared victory in the partisan health care wars. “When the individual mandate is being repealed, that means Obamacare is being repealed,” he crowed at a Cabinet meeting on Wednesday. “We have essentially repealed Obamacare.”

Well, no. The individual mandate is only part of Obamacare. It wasn’t even included in the original health care plan that Barack Obama unveiled during the 2008 campaign. The mandate did become an important element of Obamacare, and the only specific element that a majority of the public opposed. But the more generous elements of the program—like a major expansion of Medicaid, significant government subsidies for private insurance premiums, and strict protections for pre-existing conditions—are still popular, and still the law of the land.

“The death of Obamacare has been exaggerated,” says Larry Levitt, who oversees health reform studies at the Kaiser Family Foundation. “Eliminating the mandate creates uncertainty, but all the benefits for people remain in place.”

The Republican ecstasy and Democratic gloom over the death of the mandate reflects the most consistent misperception over the seven-plus years of Affordable Care Act debates, the incorrect assumption that the “Obamacare exchanges,” where Americans can buy private insurance, are synonymous with Obamacare. The vast majority of Americans who get their coverage through Medicare, Medicaid or their employers shouldn’t be affected. Yes, killing the mandate could cause problems for the remaining 6 percent of Americans who have to buy insurance on the open market, but nearly half will remain eligible for subsidies that would insulate them from any premium hikes.

Repealing the tax penalties for Americans who don’t buy insurance would not repeal Obamacare’s perks for Americans who do—like the ban on annual and lifetime caps that insurers previously used to cut off coverage for their sickest customers, or the provision allowing parents to keep their children on their plans until they turn 26. And it would not repeal Obamacare’s “delivery reforms” that are quietly transforming the financial incentives in the medical system, gradually shifting reimbursements to reward the quality rather than quantity of care. The growth of U.S. health care costs has slowed dramatically since the launch of Obamacare, and the elimination of the mandate should not significantly affect that trend.

In fact, during the 2008 campaign, Obama was the only Democratic candidate whose health plan did not include a mandate, because he was the only Democratic candidate who thought the main problem with health care was its cost. “It’s just too expensive,” he explained at an Iowa event in May 2007. Insurance premiums had almost doubled during the George W. Bush era, and Obama believed that was the reason so many Americans were uninsured. He doubted it would be worth the political heartburn to try to force people to buy insurance they couldn’t afford.

But Obama eventually embraced the argument that a mandate was necessary to ensure that young and healthy Americans bought insurance. The fear was that otherwise, insurance markets dominated by the old and sick (who would enjoy the law’s new protections for pre-existing conditions) would have produced even higher premiums, and might scare insurers away from serving Americans who don’t get coverage through their jobs or the government. Killing the mandate will be a step in that direction, boosting Trump’s heighten-the-contradictions effort to sabotage the functioning of Obamacare to build support for a more sweeping repeal.

That effort has already produced some damaging results for the exchanges. Insurers have increased their premiums for 2018, repeatedly citing uncertainty over Trump’s efforts to blow up Obamacare as well as his decision to cut off promised payments to insurers who cover lower-income families. Several insurers left the exchanges even before the elimination of the mandate, and others could follow.

But the widespread warnings that wide swaths of America would have no insurers on the exchanges were wrong; there are zero “bare counties” with no insurers for 2018. And a Kaiser review found the exchanges have gotten more profitable for insurers this year,despite Trump’s efforts to damage them. This year’s enrollment period appears to have gone fairly well even though the Trump administration shortened it by half and slashed its promotional budget.

The fear is that eliminating the mandate could produce a “death spiral” for the exchanges, where higher premiums scare away healthier customers, leading to even higher premiums and even sicker customers—until eventually,the insurers decide to bail. It could also encourage insurers to try to lure healthier customers with cheaper but skimpier plans that don’t provide protections for pre-existing conditions, since those customers would no longer have to pay a tax penalty.

But it is also possible that younger and healthier customers who initially bought insurance because they were required to do so will now buy insurance because they want to; surveys show that more than 75 five percent of Americans covered on the exchanges are happy with their coverage. And as a political matter, repealing the unpopular mandate could make it even harder for Republicans to pass legislation repealing insurance protections, Medicaid expansions and the rest of Obamacare, because the rest of Obamacare is popular. It’s not surprising that Republicans managed to kill the law’s vegetables, but it won’t be as easy to kill dessert.

Trump thinks congressional Democrats will soon be begging him to come up with a replacement for Obamacare, and even many Republicans who don’t embrace that fantasy believe the demise of the mandate will ratchet up pressure for a permanent solution to a seven-year political war. It could happen. But there hasn’t been a lot of bipartisanship in Washington lately, and after the Doug Jones upset in Alabama, it seems unlikely that a Senate with one fewer Republican will be more amenable to a Republican-only repeal bill.

The most likely outcome seems to be at least a few more years of Obamacare muddling through, and at least a few more years of Obamacare political warfare.

 

ObamaCare mandate repeal would put pressure on states

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ObamaCare mandate repeal would put pressure on states

ObamaCare mandate repeal would put pressure on states

The expected repeal of the ObamaCare mandate to buy health insurance means that states will soon have to step in and decide whether to create their own mandates.

The requirement that everyone must purchase insurance or pay a fine is a bedrock principle of ObamaCare, but it’s also one of the most unpopular parts of the law.

GOP leaders have tried for years to find a way to repeal it, arguing that it’s an unaffordable burden on working class Americans. Now, by including a provision that eliminates the penalty in the tax bill, Republicans are on the cusp of achieving a major legislative victory.

Outside experts and supporters of ObamaCare predict chaos in the insurance markets if the tax bill passes and the mandate is repealed.

Premiums are expected to rise significantly and insurers could leave the marketplace. The Congressional Budget Office estimated that about 13 million more people would be without insurance in 10 years.

States have the power to potentially blunt the damage if they choose to enact their own mandate penalties, but even officials in the most liberal states could face a bruising political battle.

“The idea of penalizing people for not getting insurance is controversial, even in blue states,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation. “The debates on reimposing the mandate are not the same as opposing Republican efforts to repeal it. It’s a different dynamic.”

Levitt noted that the idea has split Democrats in the past. For example, in the 2008 presidential campaign, Hillary Clinton’s health plan included a penalty for being uninsured, while former President Obama’s did not.

“The mandate is the most unpopular part of the Affordable Care Act, so there are political challenges in focusing a debate on just that issue,” Levitt said. “States would have to make the case that it would stabilize the market to overcome political opposition.”

There are no legal barriers if other states want to set up their own mandates, but one of the biggest obstacles is time.

If the tax bill passes as expected early next week, states will face a rapidly ticking clock to try to stabilize their health insurance markets.

“It’s faster to destroy something than to create something. For states to create a replacement infrastructure, it takes time,” said Stan Dorn, a senior fellow at the advocacy group Families USA.

Dorn said states would need to decide how much of a penalty people would pay. There would also have to be regulations about reporting requirements, and the whole package would need to pass a state legislature.

But a former Obama administration official said the administrative costs and logistics of a state-level individual mandate shouldn’t be that complicated.

“It’s something of an operational lift, but compared to what states did to implement the ACA, it’s not that hard,” said Jason Levitis, a policy expert at Yale Law School and former senior official in the Treasury Department under Obama.

Insurers have urged Congress not to repeal the federal mandate, but so far have remained quiet about state alternatives.

To date, California, Maryland and Washington, D.C., have been having public discussions about replacing the federal mandate with a state penalty.

Massachusetts has had an individual mandate on the books since 2006, when it was enacted under the law known as RomneyCare. The Massachusetts mandate is more stringent than the federal one, so other states may not want to follow that template exactly.

Earlier this year, officials in the District of Columbia recommended continuing to enforce the mandate if the federal government stopped. While it’s not the same as enacting a state-level mandate, experts said doing so would be the next logical step.

Much of the Republican opposition to ObamaCare’s individual mandate has been on a philosophical level; they don’t want the federal government imposing a financial requirement on Americans.

But advocates worry that the partisan divide will make state disparities even worse, just like with ObamaCare’s Medicaid expansion.

“The very states that tend to have the most people in need haven’t expanded Medicaid,” Dorn said. “Not all states are going to respond, and in a lot of states we’ll see premiums jump through the roof.”

Levitis said that if the individual mandate were repealed, state Republicans would face a reckoning.

“It’s been really easy over the past eight years to attack the mandate without understanding it, but now that it’s going away … state officials will be faced with a stark reality of what the market looks like without it,” Levitis said.

“One would hope it acts as a wake-up call,” he added.

 

The GOP is getting closer to passing its tax bill. Here’s what it could mean for health insurers

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https://www.fiercehealthcare.com/payer/gop-tax-reform-bill-health-insurers-individual-mandate?mkt_tok=eyJpIjoiTTJFMk1XWm1aalV4WVRsayIsInQiOiJ2STJJYW85ZmhWc0tKakYzU2VlV05Ydk5NbVNpd1orNWt0anFYUW9GcDZkTDBMSmJlTGs0XC9tNDBIT3RmMDhzdmtFazBaTWpDYm9hMVplUjhSTElrSVgreHBJd3FLXC9YaHhzMXpPR2Y4MHVNRVJqcDVvMDVzOGdGQUNIMCtobDZtIn0%3D&mrkid=959610

man counting money

The House and Senate have agreed upon a unified tax overhaul bill, putting Republicans on the fast track to pass legislation that has significant implications for the health insurance industry.

For one, the compromise tax bill will repeal the Affordable Care Act’s individual mandate penalty, Senate Majority Leader Mitch McConnell said in a statement on Wednesday. To McConnell, axing the mandate will offer “relief to low- and middle-income Americans who have struggled under an unpopular and unworkable law.”

Health insurers and the healthcare industry at large have opposed removing the key ACA provision without a viable alternative to encourage healthy consumers to buy coverage, arguing that doing so will destabilize the individual markets. Indeed, the Congressional Budget Office has estimated that repealing the mandate would increase the number of uninsured people by 13 million over the next 10 years and hike individual market premiums by 10% during most years of that decade.

Yet while the individual mandate repeal is problematic for insurers that do business on the ACA exchanges, nearly all insurance companies stand to gain from the GOP tax bill overall, according to Leerink Partners analyst Ana Gupte, Ph.D. She estimates that insurers can capture about 10% to 15% of the potential 25% upside from the legislation, subject to regulatory constraints such as medical loss ratio rules and competitive pricing constraints.

Likely the biggest gain for insurers is the fact that, per the New York Times, the compromise bill sets the corporate tax rate at 21%—significantly lower than the current rate of 35%.

Though the House and Senate have ironed out the differences in their bills, the final version still must be approved by both chambers. GOP leaders have but two votes to spare in the Senate, and will likely have to include two bipartisan measures to shore up the ACA in Congress’ year-end spending bill to win the support of Sen. Susan Collins, R-Maine.

Collins said on Wednesday that Vice President Mike Pence assured her that those measures would make it into the spending bill, according to The Hill. Yet some House conservatives have expressed opposition to the bills, which would provide funding for cost-sharing reduction payments and state-based reinsurance programs, among other provisions.

Meanwhile, the results of the headline-grabbing Senate race in Alabama have put a major crimp in Republicans’ plans to retry repealing the ACA. Once Democrat Doug Jones officially takes his seat, the GOP will have an even slimmer majority in the Senate, where the defection of a handful of moderate Republicans was already enough to kill several repeal bills earlier this year.

 

Tax Bill Threatens Our Health and Our Democracy

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http://www.chcf.org/articles/2017/12/tax-bill-threatens-our-democracy

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Earlier this month, the Senate passed legislation that would overhaul the tax code, make dramatic changes to federal health care policy, and undermine the budgets of Medicaid and Medicare, two pillars of the American health care system. The House and Senate are now trying to reconcile their two tax bills. Each passed the legislation on a party-line vote, with one Republican voting against the bill in the Senate.

Congress is now one step away from passing a tax bill that will have a profound effect on the health and well-being of Americans for a generation. No one should forget that, to get this close, the Senate rushed to approve a deeply unpopular proposal with little transparency and due diligence — and no bipartisanship. Left unchecked, these actions will harm millions of Americans — and American democracy itself.

Even though the legislation has been framed as a tax bill, it is very much a health care bill. The Senate bill would eliminate the Affordable Care Act’s individual health insurance mandate, which would lead to the destabilization of the individual health insurance market. The Congressional Budget Office (CBO) projects that this change alone would increase individual premiums by 10% a year and cause as many as 13 million Americans to join the ranks of the uninsured by the end of the next decade. In California, the uninsured population would grow by 1.7 million people. Congress may still pass separate legislation to restore some stability to the individual market, but the leading proposals are too modest to prevent much damage.

Seismic Impact

On its own, the language in the tax bills would trigger a major earthquake in the health care system, and the aftershocks of this tax bill would be just as dangerous. By eliminating more than $1 trillion of federal revenue, the administration and congressional leaders are manufacturing a budget crisis that would likely lead to automatic cuts to Medicare under federal rules. The CBO, which examined the House bill, has estimated that those cuts could be around $25 billion a year. Republican leaders have also indicated they intend to use the revenue shortfall that they are engineering with this tax bill to seek deep cuts in safety-net programs, starting with Medicaid.

This isn’t merely about what the legislation will do to health care, because it also would exacerbate inequality and worsen health disparities in this country. Under both the House and Senate bills, low- and middle-income families would pay more in taxes and have a harder time paying not just for health care, but also for food, housing, child care, education, and other basic needs. When people struggle so much to make ends meet, they suffer more from illness and die younger. And if inequality keeps getting worse, it will undermine the economic, social, and political stability upon which our nation depends.

The burden on Californians would be particularly heavy. Our families would no longer be able to deduct what they pay in state and local taxes on their federal tax returns. This change alone would take more than $112 billion a year out of the pockets of hardworking Californians — more than any other state. The fact that Californians would be paying more in federal taxes would inevitably put new pressure on our state and municipal governments to reduce their taxes. Under that scenario, it is not hard to imagine a new wave of painful state and local budget cuts.

The irony is that California actually has the power to stop this runaway train. If the entire California congressional delegation worked together to protect their constituents, and if they were united and strong, they could prevent many — if not all — of the worst provisions in the tax bills from becoming law.

This moment is a test of leadership. Nothing less than the health of our people — and our democracy — are at stake.