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February 27, 2017

Payers and Providers: ACA Repeal and Replace Won’t Be Easy

Payers and Providers: ACA Repeal and Replace Won’t Be Easy

Philip Betbeze | HealthLeaders Media

While repealing the ACA only requires 50 votes in the Senate, replacement requires 60. With little cross-aisle cooperation expected, the administration will need to scale down its ambitions, healthcare leaders say.

Repeal and repair may be all the president and Congressional Republicans can hope for in dealing with the ACA in the immediate future.

That’s the message from Rick Pollack, president of the American Hospital Association, and Marilyn Tavenner, the president of America’s Health Insurance Plans, at a Nashville Health Care Council event Thursday.

In a moderated discussion, Pollack and Tavenner dished on the political realities facing the administration’s attempt to repeal and replace the Affordable Care Act, the state of the individual health insurance marketplaces and the bleak reality of how tough it is to get things done in Washington.

Their consensus: With so much up in the air, uncertainty is the watchword.

Pollack said the stage has been set for repeal, but the impending reality of its repercussions is holding Congress back.

Despite the president’s executive order to take regulatory actions to dismantle parts of the ACA, which does not depend on Congress, there’s no consensus evident yet. And there may not be before the House hopes to wrap up legislation by the next recess, which begins March 19, Pollack said.

Maintaining coverage for the more than 20 million people who have received it under the ACA seems to be the big stumbling block for immediate action. Plans that are still in committee haven’t been scored by the Congressional Budget Office. It’s a big stumbling block for their constituencies as well, said both Pollack and Tavenner.

“There’s nothing more important from our perspective than maintaining coverage for the 22 million people who have received it,” Pollack said.

For those people, Congress may have to “repair” the ACA by extending subsidies short term.

“Close to 70% of individuals on the exchanges rely on those subsidies,” said Tavenner, who was administrator of CMS under President Obama from late 2011 to early 2015. “These people cannot afford premiums without help.”

She said Congress must resolve this issue by April, when health plans set price for policies to be sold 18 months hence.

“So we have to know about this year and 2018/2019 at a minimum,” she says, which means the earliest any replacement might debut would be 2020.

Another priority of the administration and the Republican-dominated Congress is reforming Medicaid, possibly by providing block grants to states, allowing them broad discretion on how best to spend the funding.

The Case Against Block Grants
Pollack said that if the idea is to provide some level of flexibility to states, the federal waiver process might be a more workable idea than block grants.

“What is the accountability to spend [block grants] on healthcare? He asked. “It’s all very unclear. But fundamental is if we’re going to use block grants and per-capita caps to cut a program that’s already seriously underfunded, it’s not a productive discussion.”

Tavenner agreed that state flexibility would be an improvement for Medicaid, and “all of us would support getting bureaucracy out of the way, but the president has been clear that his intention is to keep people covered. That means those states that have expanded will have to have a process to keep those people so they’re not kicked off the rolls. Block grants make that more difficult.”

Both also said doing block grants would be difficult or impossible under reconciliation rules.

Slow Progress Ahead
Tavenner expressed regret that the ACA as a whole is being tarnished when many problems that are most evident are in the individual market, meaning the public exchanges.

She cited the stability of the Medicare Advantage program, which close to one third of Medicare beneficiaries have now chosen. And despite high costs, the employer-sponsored market, which covers 150 million people, is stable as well, and about 75% of Medicaid is now administered through managed care plans.

“So what we’re really talking about is the individual market,” she said. “Put the rest aside and deal with the actual problem. The immediate problem it’s never been stable and there are about 20 million people in that market.”

She and Pollack predicted that little will have changed in six months, despite the GOP’s promises of repeal and replace.

“We’ll still be having this discussion six months from now,” Tavenner said. Meanwhile, she added, Republicans will probably repeal the individual mandate, and will probably move to allow insurance to be sold across state lines.

“Politically, there will be an effort to pass something they can claim to call repeal,” says the AHA’s Pollack. “To do replace, you need 60 [votes]. Will Democrats engage?”

Philip Betbeze is the senior leadership editor at HealthLeaders Media.

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