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Day 7 post-election summary

AltegraHealth

11/29/2016

With Republicans now controlling the White House and Congress, there is considerable uncertainty about health policy before the end of 2016, as well as 2017 and beyond, particularly the Affordable Care Act (ACA). The central questions are which parts of the ACA, if any, will be repealed and what will replace the parts that are repealed. There are a number of factors contributing to this debate:

  • Health plan competitiveness in the insurance exchange: Health plans are struggling to remain competitive in the exchange market and are seeking regulatory relief. Any fundamental changes to the exchange market would likely need to address health plan competiveness. 
  • Health plan member benefits: For the millions who would lose insurance exchange coverage should ACA be repealed, it is uncertain the effect of this change for the electorate and how they would react towards their elected representatives in the 2018 elections and beyond. 
  • Insurance exchange cost-sharing subsidies: A current federal court ruling, namely, U.S. House of Representatives v. Burwell, has ruled that the exchange cost-sharing subsidies were illegally paid by the government. If this ruling stands, health plans would be required to pay the subsidies, further jeopardizing their ability to compete in the exchange market.

 

Proposals that may receive consideration in 2017

  • Repealing the ACA through a majority vote: The most likely path for repealing ACA would be utilized through a process used to enact the federal budget. This scenario, which was utilized by the Senate in 2015 with a simple majority vote (and later vetoed by President Obama), repealed the individual mandate, employer mandate, insurance exchange subsidies, the stabilization programs (risk adjustment, reinsurance, risk corridors), Medicaid expansion, and multiple industry taxes, among other provisions.
  • Trump platform: President-elect Trump’s healthcare platform to replace ACA, in short, includes purchasing insurance across state lines, expanding health savings accounts, creating state high-risk pools, and deducting insurance premiums from taxes, among other provisions.
  • Speaker Paul Ryan’s platform: After becoming Speaker, Ryan led an effort to produce an agenda earlier this year entitled, “A Better Way.” This agenda includes providing tax credits to purchase insurance coverage based upon age (rather than income), purchasing insurance across state lines, preserving employer-sponsored care, allowing small business insurance pools, and incentivizing employer wellness programs, among other provisions.
  • ACA provisions with bi-partisan support: Even if the entire ACA were repealed, a replacement bill would likely include the current ban on denying coverage for pre-existing conditions and allowing young adults to stay on their parents’ health plan through age 26.
  • Other ACA provisions addressing health plan competitiveness: One proposal with bi-partisan support would be exempting certain individuals from the individual mandate if they face an insurance exchange market with minimal competition in their respective counties. With Republican control, a public option is unlikely.
  • Medicaid expansion: A repeal of the Medicaid expansion is not supported by multiple constituencies, particularly Republican governors and beneficiaries that would lose coverage. A Trump administration is likely to be more flexible working with states to design Medicaid that includes cost-sharing and work requirements, provisions not supported by the Obama administration.
  • Medicare Advantage (MA): Historically, Republicans have been long-time supporters of MA and are supportive of Medicare reform that would likely lead to additional enrollment. This would include repealing MA cuts, namely the benchmark caps and coding intensity adjustments, enacted through the ACA.

 

When can we expect to see changes?

Both the Trump administration and congressional Republicans have expressed serious interest in repealing ACA and major questions around reforms to ACA and when those changes would occur remain. With President Obama still in office, it is unlikely any major changes would occur in 2016. Currently, major changes are not anticipated until at least 2018.

Where can I go for more information?

As a valued client, we appreciate your thoughts on the future of health care and are happy to speak with you about the election and where we all go from here. Having an open dialogue with our clients allows us all to best adapt to changes in this ever-evolving market. If you have any questions regarding the politics of ACA-related reforms, please contact Tim Jones, Director of Federal & State Government Relations, at tim.jones@altegrahealth.com.