“They’re like the dog that caught the bus.”
That was the comment from Senate Minority Leader Chuck Schumer in a January episode of This Week with George Stephanopoulos referring to the GOP and their pledge to repeal and replace the Affordable Care Act aka Obamacare.
In the more than six years after the passage of ACA, the House of Representatives voted to repeal it 60 times. In December 2015, the Senate used a special budgetary procedure to approve one of the bills with simple majority vote instead of the 60-vote threshold normally needed for major legislation. As expected, President Obama promptly vetoed the bill. But the GOP had finally made a statement.
With the election of President Trump and a majority in both houses of Congress, Republicans can now make policy and do what they have been promising to do since the controversial law was passed in 2009. The GOP has finally caught the bus.
President Trump campaigned on “repeal and replace.” He appointed Georgia Representative and physician Dr. Tom Price to head the Department of Health and Human Services with the express goal of dismantling the ACA. Speaker of the House Paul Ryan has been consistent in his desire to repeal and replace the law.
The intent is clear, but the method for accomplishing the long-stated goal is murky. Republicans appear to be in conflict over the approach they need to take with ideas ranging from immediate repeal to a process that could take years. Predicting the ultimate Republican action is dicey at best, but based on the comments and stated plans of the three main players – Trump, Ryan, and Price - there are several provisions we will probably see in any ACA replacement plan.
Paul Ryan has offered his blueprint in a policy document titled “A Better Way.” Dr. Price, a former orthopedic surgeon, has been submitting the “Empowering Patients First Act” every year since 2009. The proposed legislation outlines the HHS secretary’s vision for the country’s healthcare system. President Trump’s campaign paper on healthcare reform, and comments made on the campaign trail and since his inauguration provide insight on how he might approach the ACA replacement.
Although there is no way to forecast the end game when it comes to healthcare reform, examining some of the major components of the ACA through the lenses of these three men should give some indication of where we are headed.
This is one of the most popular and widely accepted elements of the ACA. President Trump has consistently stated that any replacement plan will include a provision for protecting those with pre-existing conditions.
Dr. Price agrees, with a significant caveat. His plan would guarantee coverage for individuals, “provided they had continuous insurance for 18 months before choosing a new policy.” Continuous coverage would include people who shift from the employee market to the individual market. Dr. Price’s addition appears to try to discourage people from signing up for coverage during an illness and then dropping it after recovering.
Ryan’s plan “ensures every American, regardless of their health status, has the comfort of knowing you can never be denied coverage.” He also includes the concept of continuous coverage with “patient protections so that individuals are not charged more than standard rates – even if you’re dealing with a serious medical issue. This encourages Americans to enroll in coverage and stay enrolled."
Based on what the three have said, it’s a good bet protection for pre-existing conditions in some form will be part of any replacement law.
Dependent coverage to age 26
This is another popular component of the ACA and one on which the president and speaker agree. Ryan’s A Better Way “would allow dependents up to age 26 to stay on their parents’ plan, helping younger Americans receive healthcare and stabilizing the market.” President Trump has publicly agreed so this is another provision likely to survive.
Expanded purchasing options
One change we are likely to see in any plan is an expansion of the health insurance market allowing consumers to purchase coverage from any state they choose.
Ryan’s plan says permitting sales across state lines is “a step toward making the insurance market more competitive, and giving you the power to shop broadly for more affordable policies.”
President Trump’s policy paper agrees stating, “By allowing full competition in this market, insurance costs will go down and consumer satisfaction will go up.”
Dr. Price makes it unanimous allowing consumers to shop around for insurance in any state just as they do for other insurance products.
Health Savings Accounts (HSA’s)
Expanded use of HSA’s will also likely be part of the insurance landscape going forward since all three agree on that as well.
President Trump’s plan reinforces that contributions into HSA’s should be “tax-free and allowed to accumulate. They would become part of the estate of the individual and could be passed on to heirs without fear of any death penalty.” He feels these accounts would be attractive to young people who are healthy and can afford high deductible plans.
Ryan says his plan “eliminates the roadblocks put in place by Obamacare and institutes several commonsense expansions to HSA’s.” These include allowing spouses to make catchup contributions and setting the maximum contribution to an HSA at the maximum combined and allowed annual deductible and out-of-pocket expense limits.
Dr. Price’s bill expands the use of HSA’s even further allowing people covered by Medicare, the Veteran’s Affairs Department or other government health programs to continue to contribute and utilize HSA’s to cover premiums and copayments.
President Trump, Dr. Price and Ryan all agree that the Medicaid expansion under the ACA must be rolled back shifting more control to the states.
Ryan says “the status quo of today’s Medicaid program is unsustainable.” He references a CBO report that shows the federal share of Medicaid costs are expected to double over the coming decade increasing from $350 billion in 2015 to more than $624 billion in 2026. “Based on current trends, by 2025, each year Medicaid will cost federal and state taxpayers nearly $1 trillion.”
The Speaker’s plan would give more flexibility to states to adapt their Medicaid programs. Instead of direct federal funding, he would provide a per capita allotment which he feels would achieve three main goals: “reforming Medicaid’s financing, restoring Medicaid’s focus on the most vulnerable, and restoring federalism by empowering states with new freedoms and flexibilities to run their Medicaid program.”
The President would also eliminate direct federal funding of Medicaid and instead deliver the current 60 percent federal funding in the form of block grants to the states to fund the program. “The state governments know their people best,” his policy states, “and can manage the administration of Medicaid far better without federal overhead. States will have incentives to seek out and eliminate fraud, waste, and abuse to preserve our precious resources.”
Dr. Price agrees saying in his confirmation hearings that the federal government should leave it to governors and state insurance commissioners to decide how best to cover their low-income residents. He insisted that any ACA replacement bill should provide coverage options for every American.
Government Healthcare Exchanges
All three agree that the exchanges aren’t working and should be replaced, but that will be the trickiest part of dismantling the ACA.
Dr. Price’s bill scraps the exchanges and replaces them with fixed tax credits tied to a person’s age rather than their income, enabling them to buy coverage in the private marketing.
Ryan’s plan aims to increase coverage “portability” that provides financial support for Americans not covered by employer plans. He proposes a “universal advanceable, refundable tax credit for individuals and families.” The portable payment would be adjusted for age to give older Americans more support and would grow over time. Individuals would use the payment to buy plans of their own choice. Ryan says the credit would be large enough “to purchase a typical, pre-Obamacare health insurance plan.”
In place of the Healthcare.gov, the tax credit plan “would be more flexible and available for shoppers through multiple portals, including private exchanges.”
The President’s “repeal and replace” campaign pledge would result in the elimination of the exchanges but it may take longer than he had planned. He has consistently asserted that he wouldn’t allow the people using the exchanges to lose their coverage. He apparently has realized he must “repair” before he “repeals and replaces.” He recently took steps to temporarily shore up the exchanges to calm the roiling insurance market.
The exchanges figure to remain in the short term, but will most likely not be a part of any long-term replacement plan.
The healthcare reform saga promises to play out over the next year or so and is likely headed down a long and winding road. But studying what the key players are saying and have said on record, gives us a clearer view of any future plan.
One final thought. Despite the din and clamor from both sides of the aisle, former House Speaker John Boehner predicts that when the dust settles, nothing much will have changed.
“They’ll fix Obamacare and I shouldn’t have called it repeal and replace because that’s not what’s going to happen,” Boehner said in his keynote speech at the HIMSS conference last week. “They’re basically going to fix the flaws and put a more conservative box around it.”
For more information about how the administration is predicted to affect, or not affect, the healthcare industry, read our blog post, 3 Things that Most Likely Won't Be Changing in Healthcare Under the New Administration.
 Do Republicans Really Want to Repeal Obamacare? Maybe Not, by John C. Goodman, Forbes, August 4, 2016.