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February 27, 2017

Tavenner, Pollack ask that ACA replacement plan tackle individual markets first, Medicaid later

Tavenner, Pollack ask that ACA replacement plan tackle individual markets first, Medicaid later

By Dave Barkholz  | Modern Healthcare

If the Trump Administration and Congress repeal the Affordable Care Act, they ought to first fix the marketplace for individuals and put off the contentious debate of Medicaid reform for many months, two leading health association presidents said Thursday.

Speaking at a Nashville Health Care Council luncheon, American Hospital Association President Rick Pollack and Marilyn Tavenner, president of the America’s Health Insurance Plans, agreed that the individual insurance market was unstable before the ACA and it remains so.

Of the millions of newly insured on the exchanges, 70% are receiving subsidies to be able to afford coverage, Tavenner said.

So the politics of removing the subsidies and effectively forcing them off coverage would run counter to President Donald Trump’s promise to keep Americans insured, she said.

Moreover, health plans need about 18 months to set prices for their insurance products so massively reforming the exchanges even by 2018 is becoming increasingly unlikely, she said.

“It really is crunch time,” Tavenner said of an ACA replacement plan that is politically feasible.

Republican lawmakers also have said they want to first take measures to stabilize the individual marketplace before focusing on efforts to reform Medicaid and roll back expansion.

While Congress debates the repeal of the ACA, mostly through budget reconciliation, it ought to wait on considering Medicaid reforms until it gets the individual marketplaces overhauled, Pollack said.

The bulk of the 22 million newly insured under the ACA are the result of 31 states expanding Medicaid with the federal government predominantly footing the bill.

Though Medicaid reimbursement typically doesn’t cover all the costs that hospitals incur for those patients, the business is very stable – much like the commercial market, Pollack said.

Congress and the administration would be better off tackling the individual marketplaces first rather than getting into the more controversial aspects of Medicaid reform proposed, such as the per-capita budget caps and state block grants, Pollack said.

He said a debate about those reforms with so much else to do on ACA “would not be a productive discussion.”

On a positive note, Tavenner and Pollack agreed that the industry’s transformation from fee-for-service to more risk-based or value reimbursement would continue.

Legislation such as the Medicare Access and CHIP Reauthorization Act has enjoyed bipartisan support, they said. The market also is driving the transformation as hospitals and doctors realize that there are cost savings available in more efficiently managing patient populations, Pollack said.

The two leaders also told the luncheon audience that they oppose price controls on pharmaceuticals when greater transparency on prices – in some cases from negative publicity – is prompting some pharmaceutical companies to check prices.


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