Over the past several weeks, senior GOP aides have repeatedly said that if the Senate bill touches pre-existing conditions in any way, it will lose around a third of the caucus. Today, a provision that could cause sick people to pay much higher premiums than they currently do has not caused any Republicans to say they’ll vote against the GOP health bill.
When Senate GOP leaders first presented their plan to the caucus in a PowerPoint presentation, it explicitly said that pre-existing conditions wouldn’t be touched, aides say.
As recently as two weeks ago, aides said members were surprised and angry to learn that Sen. Ted Cruz’s Consumer Freedom Option would allow plans that didn’t include the Affordable Care Act’s pre-existing conditions protections. (They could only be sold by insurers that also offered plans with the protections.)
Sen. Bob Corker: “I think people understand that’s got to be protected, and people understand what happened when the House dealt with it and opened it up, and it’s just not something that senators are wishing to do.”
Sen. Shelley Moore Capito over recess: “I think that reopens an issue that I can’t support, that it would make it too difficult for people with pre-existing conditions to get coverage.”
Sen. Chuck Grassleylast week: “There’s a real feeling that that’s subterfuge to get around pre-existing conditions.”
Now, that resistance is “melting away,” as one Senate Republican aide put it today. “No one wants to be bad guy.”
Indeed, almost seven hours after the revised bill — including the Cruz provision — had been released, no Republican senator had threatened to vote against the bill unless the provision is removed. In fact, Republicans had surprisingly little to say about it.
What the Consumer Freedom Option does:
It allows insurers that offer ACA-compliant plans to also sell plans that do not comply with ACA regulations, including the law’s essential health benefits and its pre-existing conditions protections.
Advocates of the bill say that while this could sort sick and healthy people into two different marketplaces, causing premiums to skyrocket for sick people, they’ll be insulated from these costs by premium subsidies and the bill’s stabilization fund.
Members “don’t realize we are basically creating single payer for sick people,” the GOP aide told me, saying that Republicans’ support is growing because people with pre-existing conditions can still get exchange plans.
The problem: “If there were hearings, everyone would have a lot more information about Cruz. Right now, Cruz is the only seller of the amendment and he’s the only one with information about the amendment,” said one well-connected GOP lobbyist, who said Cruz’s sales pitch seems to be convincing members to support his idea.
What insurers and experts are saying:
America’s Health Insurance Plans: “Patients with pre-existing conditions … would potentially lose access to comprehensive coverage and/or have plans that were far more expensive.”
Scott Serota, president and CEO of the Blue Cross Blue Shield Association: “The ‘Consumer Freedom Option’ is unworkable as it would undermine pre-existing condition protections, increase premiums and destabilize the market.”
Kaiser Family Foundation: 1.5 million people with pre-existing conditions could have higher premiums under the Cruz amendment.
Yes, but: The conservative groups love it, as it addresses the ACA regulations that weren’t fully addressed in the previous version of the bill. They believe those regulations are driving up the cost of insurance. Stripping the provision could lose these groups’ support.
And Michael Cannon of the libertarian Cato Institute says the provision “would make access to healthcare more secure for patients who develop expensive conditions” — because it would free insurers to introduce a wider variety of health plans and make them less likely to leave the markets.
With SenateRepublicans struggling to find votes for sweeping legislation to roll back the Affordable Care Act, several GOP lawmakers have raised the prospect of a more limited bill — passed with help from Democrats — to stabilize health insurance markets around the country.
That may be heresy for conservative Republicans who’ve spent seven years demanding the full repeal of Obamacare, as the law is often called.
But most patient advocates, physician groups, hospitals and even many health insurers say more-targeted fixes to insurance marketplaces make more sense than the kind of far-reaching overhaul of government health programs that Republicans have been discussing.
Why do a more limited Obamacare ‘fix’?
For one thing, it would be politically easier. More-targeted legislation also wouldn’t threaten insurance protections for tens of millions of Americans.
The political debate over the 2010 healthcare law has focused for years on what has been happening to insurance marketplaces like HealthCare.gov, which were created by the law for Americans who don’t get health insurance through work.
For a variety of reasons, the marketplaces’ first several years have been rocky.
Insurers in many states struggled to figure out how much to charge for their plans and then raised premiums substantially when customers turned out to be sicker than they expected.
But the marketplaces — where about 10 million Americans currently get coverage — represent a very small fraction of the U.S. healthcare system.
By contrast, more than 70 million Americans rely on Medicaid and the related Children’s Health Insurance Plan, the government safety net plans for the poor.
Altering Medicaid, as proposed under the GOP plan, would be far more disruptive. And, as congressional Republicans are learning, it is much more controversial.
But isn’t Medicaid a big problem, too?
Many conservatives have long argued the federal government can’t afford to provide so much healthcare assistance to the poor.
But Medicaid has become a vital lifeline for tens of millions of Americans. Medicaid provides assistance to more than one in three U.S. children, protects millions of Americans with disabilities and is the largest funder of nursing home care for elderly Americans, in large part because Medicare does not cover nursing homes.
Obamacare’s Medicaid expansion, which made coverage available to working-age adults in many states, is credited with driving down the nation’s uninsured rate to the lowest levels ever recorded.
That is why Medicaid has been fiercely defended by patient groups, doctors, nurses, educators and even some Republican governors.
What would it take to stabilize insurance markets?
Probably not that much, actually.
There is widespread agreement that the federal government must first continue funding assistance through Obamacare to low-income consumers to help offset their co-pays and deductibles.
But the payments have become a political football as Republicans argued the aid can’t be provided without an appropriation by Congress. And Trump administration officials keep threatening to cut off the payments.
Many insurers say that would be devastating, forcing them to raise premiums by double digits.
Congress could simply put an end to that uncertainty by voting to appropriate the CSR money.
Secondly, most insurance industry officials and independent experts say the federal government must create a better system to protect insurers from big losses if they are hit with very costly patients.
Such reinsurance systems are used in other insurance marketplaces such as the Medicare Part D prescription drug program and are seen as critical to stabilizing markets.
Thirdly, current and former marketplace officials say, the federal government should aggressively market and advertise to get younger, healthier people to buy health plans on the marketplaces.
This strategy has helped Covered California, that state’s marketplace, which has not been beset by some of the problems in other markets.
Finally, many experts say, federal officials likely will have to come up with additional incentives to convince health insurers to offer plans in remote, rural areas.
Some Republicans have suggested that consumers in these areas could be allowed to buy health plans that don’t meet standards set out in the current law.
Would these steps cost more money?
Yes.
But both the House and Senate GOP bills to roll back Obamacare included billions of dollars to stabilize markets over the next several years.
So could Congress put that aid in a smaller healthcare bill?
That’s still unclear.
Many congressional Republicans are reluctant to spend any more money on healthcare aid, especially for a law that most have sworn to repeal.
That suggests that there could be a political price to pay for the GOP if the markets are not stabilized.
At the same time, Senate Democrats have signaled a willingness to work with Republicans on marketplaces fixes if GOP lawmakers agree to drop their repeal campaign.
But major hurdles remain, including demands from many GOP lawmakers that at least some of Obamacare’s provisions be repealed, such as the highly unpopular mandate requiring Americans to have health insurance.
Rather than stabilizing markets, however, eliminating the insurance requirement could lead to even more turmoil, experts say.
The Senate’s healthcare bill, if passed, could spell doom for some cash-strapped rural hospitals, many of which are already vulnerable to closure, experts say.
Much of the concern is centered on cuts to Medicaid in the bill—a proposal that is also worrying to large hospitals and health systems—which could leave millions more uninsured and significantly increase uncompensated care costs.
“These hospitals are hanging on by their fingernails,” Maggie Elehwany, vice president of government affairs for the National Rural Health Association, told CNN. “If you leave this legislation as is, it’s a death sentence for individuals in rural America.”
The cuts wouldn’t only hurt patients, according to a new report. Some of the bill’s proposals could also lead to thousands of rural healthcare workers losing their jobs. The Chartis Center for Rural Health, a part of strategic planning firm The Chartis Group, estimated that the BCRA, if passed as is, could cause 34,000 rural healthcare jobs to be eliminated.
Under the Senate’s bill, the cuts could cost rural hospitals $1.3 billion in lost revenue. Much of this would be felt in reduced Medicaid payments; expansion states, this would be about $442,000 lost each year per facility, while it would equal about $224,000 in lost revenue. It would likely push nearly 150 more rural facilities into the red, according to the analysis.
One such vulnerable facility is Lincoln Community Hospital, the small, regional hospital in Hugo, Colorado. The 50-bed hospital serves the the town of about 825, according to an article from National Public Radio, with many of its patients on either Medicare or Medicaid.
The funding cuts proposed in the Better Care Reconciliation Act have given leaders at Lincoln pause, and if the hospital were to close it would leave local residents in a “medical desert,” as it’s more than 100 miles to the next nearest hospital.
The facility was nearly shut down several decades ago, and former board member Ted Lyons said that, though the Affordable Care Act is far from perfect, he hopes that members of Congress work to protect rural hospitals if they intend to move forward with a repeal.
“You don’t drown the duck to get the feather out of him,” Lyons told NPR.
Rural healthcare leaders in Pennsylvania expressed similar concerns. Washington Health System operates two hospitals, one with 260 beds and one with 49 beds, in the western part of the state. CEO Gary Weinstein told WESA that if its smaller Waynesburg hospital closed, patients would have to travel at least 30 minutes for care.
The Waynesburg facility is located in Greene County, which is ranked 60th out of 67 Pennsylvania counties in per capita income, so many of its patients are Medicaid recipients. If a patient without insurance comes into the hospital, it recoups just 5% of its costs, Weinstein said.
“We don’t make money when somebody is insured by Medicaid, but at least we get something,” Weinstein said. “But when somebody has no insurance at all, a lot of times they just aren’t able to pay any part of the bill.”
Weinstein said he has spoken to Sen. Pat Toomey, R-Pennsylvania, one of the 13 senators involved in crafting the Senate’s bill, about that possibility, asking him to make additional changes to the legislation.
Issue: A draft Better Care Reconciliation Act (BCRA) has been introduced in the U.S. Senate as an alternative to the American Health Care Act (AHCA), which was passed by the House of Representatives on May 4, 2017. The Congressional Budget Office estimates the BCRA would raise the number of uninsured by 22 million by 2026.
Goal: To determine the consequences of the draft BCRA on employment and economic activity in every state. This report updates an earlier analysis of the effects of the AHCA.
Methods: We compute changes in federal spending and revenue from 2018 to 2026 for each state and use the PI+ model to project the effects on states’ employment and economies.
Findings and Conclusions: While the draft BCRA and the AHCA would have similar effects on the number of uninsured Americans, the BCRA would lead to significantly larger job losses and deeper reductions in states’ economies by 2026. A brief spurt in employment would add 753,000 more jobs in 2018, but employment would then deteriorate sharply. By 2026, 1.45 million fewer jobs would exist, compared to levels under the current law. Every state except Hawaii would have fewer jobs and a weaker economy. Employment in health care would be especially hard hit with 919,000 fewer health jobs, but other employment sectors lose jobs too. Gross state products would be $162 billion lower in 2026. States that expanded Medicaid would be especially hard hit.
The American Health Care Act (AHCA), as it was passed in the House, would result in the loss of 924,000 jobs over 10 years and spark economic downturns in every state, according to research by the George Washington University Milken Institute School of Public Health and The Commonwealth Fund.
The healthcare sector would be hit the hardest, with 725,000 jobs lost by 2026. There would be fewer healthcare jobs immediately in 17 states. The states that would be most affected overall include New York, Pennsylvania and Florida.
The primary cause of the job disappearances and state economic downturns would be cuts to healthcare funding, such as more than $800 billion to Medicaid, and lower premium subsidies.
Dive Insight:
The analysis is of the House version of the bill, and the Senate is expected to make changes when it brings its own version up for a vote. But with those negotiations going on behind closed doors, there is not enough information to makes estimates based on the Senate bill.
The report is a warning call to the healthcare industry and another black mark on the increasingly unpopular AHCA. The bill is already opposed by most major industry groups. They balk at the huge cuts to Medicaid and the Congressional Budget Office estimates up to 23 million people would lose coverage.
The threat of jobs losses could become another rallying cry. In fact, healthcare executives shaken by the potential for repeal of the Affordable Care Act (ACA) are already scaling back hiring and new projects in the face of uncertainty. Former CMS Administrator Andy Slavitt said a poll he conducted found nearly 40% of executives said they are slowing hiring and 31% are cutting capital expenses.
Healthcare job growth spiked after the passage of the ACA, which the AHCA seeks to replace. The ACA helped create about 240,000 jobs in the industry, and employment increased from an average of 1.7% in 2010 to 2.5% from 2014 to 2016. But that trend has tempered. Healthcare has averaged 22,000 job gains a month so far this year. The average monthly gain in 2016 was 32,000.
The AHCA phases out Medicaid expansion, which has been an economic boon for states that decided to expand. The authors of the latest report said those states would be hit hardest in financial terms by the bill.
“Hospitals, health systems, clinics and pharmacies might be forced to close or lay off staff as federal funding for healthcare is cut and the number of uninsured patients grows,” the researchers wrote.
Julie Rovner of Kaiser Health News, Joanne Kenen of Politico, Margot Sanger-Katz of The New York Times and Paige Winfield Cunningham of The Washington Post discuss the latest on the Senate’s effort to “repeal and replace” the Affordable Care Act, and why it is so difficult to make popular changes, such as requiring insurers to cover people with preexisting health conditions.
After much secrecy and no public deliberation, Senate Republicans finalized release their “draft” repeal and replace bill for the Affordable Care Act on June 22. Unquestionably, the released “draft” will not be the final version.
Amendments and a potential, albeit not necessary, conference committee are likely to make some adjustments. However, both the House version – American Health Care Act (AHCA) – and the Senate’s Better Care Reconciliation Act (BCRA) will significantly reduce coverage for millions of Americans and reshape insurance for virtually everyone. The Congressional Budget Office (CBO) is expected to provide final numbers early the week of June 26.
If successful, the repeal and replacement of the Affordable Care Act would be in rare company. Even though the U.S. has been slower than any other Western country to develop a safety net, the U.S. has rarely taken back benefits once they have been bestowed on its citizenry. Indeed, only a small number of significant cases come to mind.
My academic work has analyzed the evolution of the American health care system including those rare instances. I believe historical precedents can provide insights for the current debate.
Providing help to mothers and infants
The first major federal grant program for health purposes was also the first one to quickly be eliminated. The program was authorized under the Sheppard-Towner Maternity and Infancy Protection Act of 1921. It provided the equivalent of US$20 million a year in today’s dollars to states in order to pay for the needs of women and young children.
Sheppard-Towner, which provided funding to improve health care services for mothers and infants, was enacted after a long debate in Congress amid accusations of socialism and promiscuity. Interestingly enough, the act may have passed only due to pressure from newly voting-eligible women.
Jeanette Rankin, the original sponsor of the Shepard-Towner Act and the first woman elected to Congress, pictured in 1970.John Duricka/AP
Overall, the program was responsible for more than 3 million home visits, close to 200,000 child health conferences and more than 22 million pieces of health education literature distributed. It also helped to establish 3,000 permanent health clinics serving 700,000 expectant mothers and more than 4 million babies.
The program continued until 1929, when Congress, under pressure from the American Medical Association, the Catholic Church and the Daughters of the American Revolution, terminated the program. Without federal support, a majority of states either eliminated the programs or only provided nominal funding. Fortunately for America’s children and mothers, the Social Security Amendment of 1935 reestablished much of the original funding and expanded it over time.
Helping America’s farmers during the New Deal
America’s next major program confronted a similar fate. To address the challenges of rural America during the Great Depression, the federal government developed a variety of insurance and health care programs that offered extensive and comprehensive services to millions of farm workers, migrants and farmers.
Grandmother and sick baby of a migratory family in Arizona. These types of families were targeted for help by the Farm Security Administration.NARA/ Dorothea Lange
Some of these programs provided subsidies to farmers to form more than 1,200 insurance cooperatives nationwide. At times, the federal government’s Farm Security Administaton (FSA) provided extensive services directly to migrant farm workers through medical assistance on agricultural trains, mobile and roving clinics, migratory labor camps that included health centers staffed with qualified providers, full-service hospitals and Agricultural Workers Health Associations (AWHA).
In all cases, services were generally comprehensive and included ordinary medical care, emergency surgery and hospitalization, maternal and infant care, prescription drugs and dental care.
Although these services were accepted during wartime, the American Medical Association and the Farm Bureau opposed them, which ultimately led to their demise shortly after World War II. Millions of farmers lost their insurance.
Medicaid in the 1980s
Perhaps the most indicative expectations on what will happen in case congressional Republicans are able to pass their proposal hails from the Medicaid program itself.
In the early 1980s, Medicaid underwent a series of cuts and reductions leading to the first contracting in the program’s history. These involved both a reduction in federal funding and in eligibility, and an increase in state flexibility to run the program, as do the Republican proposals in Congress.
The 1980s also saw the creation and quick demise of another health care program. The Medicare Catastrophic Coverage Act of 1988 sought to fill in the gaps of the original Medicare program for America’s seniors. Specifically, it sought to provide them with protection from major medical costs and offer them a prescription drug benefit for the first time.
Similarly to the Affordable Care Act, the law had a redistributive foundation by requiring richer seniors to contribute more than poorer individuals. Also, similarly to the Affordable Care Act, it phased in benefits over a period of time.
Congress, confronted by affluent seniors who would have shouldered much of the financial burden of the program, quickly repealed much of the law before its provisions came into effect.
A Republican President, George W. Bush, was responsible for extending prescription drug benefits to seniors under Medicare Part D.Jason Reed/Reuters
It took more than a decade to provide America’s seniors with a prescription drug benefit through Medicare Part D, while only limited steps have been taken to protect seniors from major medical losses.
The consequences of those rare cases are nonetheless instructive. States were unable to continue the program without federal support or offer a valid replacement. Indeed, the programs quickly faded away. With them, millions of Americans lost access to health care.
In all three previous cases, the federal government eventually renewed its financial support. However, at times it took time for a replacement program to emerge.
The current changes proposed by congressional Republicans, particularly to the Medicaid program, are tremendously more consequential than anything we have previously experienced.
Indeed, in scale and extent, the proposed changes are unprecedented and would significantly roll back, likely for the foreseeable future, America’s safety net.
Republicans may be too timid or lack the votes to advance structural reform. And they may feel it necessary to prop up insurance companies struggling with the costs of insuring high-risk patients. That’s a fair calculation.
But are they ready to create a health care system that aids every group except the working poor? The wealthy will have their health care and their tax cuts. The middle classes will continue to enjoy expensive, generous insurance that’s indirectly funded through the tax code. And insurance companies will accept whatever assistance the government provides – from tax cuts to coverage penalty periods – to continue increasing their authority over the medical system.
That’s an arrangement that leaves out the very groups that are most desperate for health care reform: lower-income families and the working poor.
The biggest single change called for by the Republican health-care bill that may be voted on by the U.S. Senate this week is its reduction in federal spending on Medicaid, the program for poor and disabled Americans. The bill is being championed by Majority Leader Mitch McConnell and backed by U.S. President Donald Trump as a way to “repeal and replace” the Affordable Care Act, also known as Obamacare. The Senate bill, like one passed in May by the House of Representatives, would roll back Obamacare’s expansion of Medicaid and make other far-reaching changes to the program as well.
1. Who does Medicaid serve?
It’s the biggest health insurer in the U.S., providing benefits to about one in fourAmericans. It covers almost half of all births, almost two-thirds of people in nursing homes, almost 40 percent of all children and almost a third of adults with disabilities. Total Medicaid spending was $552 billion in the 2015 fiscal year, 17 percent of overall health spending. Along with education, Medicaid is one of the two largest components of spending by state governments, which administer the program and fund it in partnership with the federal government.
2. How did Obamacare change Medicaid?
It expanded Medicaid to cover those who were unable to afford private insurance but didn’t have incomes low enough to qualify for Medicaid before. After a Supreme Court ruling made the expansion optional, 31 states and the District of Columbia used the financial incentives offered under the Obamacare law to add about 12 million people to the Medicaid rolls. To congressional Republicans’ ire, the expansion was funded in part by tax increases on higher-income people. The federal government pays more than 90 percent of the cost of the Medicaid expansion.
3. What would the Republican bills do?
Reverse the expansion of Medicaid, at different paces. The House bill would wind down funding for the expansion starting in 2020. The Senate bill would phase out the expansion’s funding between 2021 and 2024.
4. How else would they change Medicaid?
Currently, the federal government generally reimburses states for a fixed percentage of Medicaid expenditures, regardless of total spending or number of people enrolled. The Republican bills would impose a per-person limit on Medicaid reimbursement that would increase over time at a rate linked to inflation. The Congressional Budget Office said that under the House bill, which uses the rate of medical inflation to set the pace of spending, federal Medicaid spending would decrease by $834 billion between 2017 and 2026. The Senate bill would set a lower growth rate starting in 2025 by using the general inflation rate as a benchmark for much of Medicaid’s spending, rather than the medical inflation rate.
5. What would the impact be?
The Congressional Budget Office estimates that between 2017 and 2026, 15 million fewer people would be covered by Medicaid under the Senate bill, and 14 million fewer under the House bill, than under Obamacare. In both cases, Medicaid would account for about two-thirds of the increase in the number of uninsured projected by the CBO.
6. How else could poor people get coverage?
The House and Senate bills would make them eligible for subsidies for individual insurance policies, meaning people who are dropped from Medicaid could use the subsidies to buy their own coverage. Critics say the bill would make those policies unaffordable to low-income people by increasing deductibles.
7. What’s the debate about the bills like?
8. What’s Trump’s position?
During the 2016 campaign, Trump said that unlike other Republican candidates he would not cut Medicaid, Medicare or Social Security. But he did support the House health-care bill. After McConnell introduced a draft version of his bill, Sean Spicer, the White House spokesman, said that Trump was “very supportive” of the bill but was “committed” to making sure that people currently on Medicaid didn’t lose their coverage.
HENRY KOTULA 
