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News & Press: Government Affairs News

Coffey Talk: Healthcare Reform Roundup

Monday, September 25, 2017   (0 Comments)
Posted by: Bradley Coffey, MA, AAOE Government Affairs
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Washington, DC - September 30, 2017 is a big day for the federal government for many reasons. First, it is the end of the fiscal year, second, this year the Treasury was expected to run out of money by September 29, and third, the process through which Republicans were attempting to repeal the controversial Patient Protection and Affordable Care Act (ACA) expires.

Congress, following it's month-long summer district work period (formerly known as a recess), has already taken care of the first two deadlines. The government will continue to be funded through December 8, 2017 and the debt-limit which allows the Treasury to borrow money, was raised to allow borrowing through December 8. Since July, it appeared that the third deadline would pass without much fanfare given the Senate's inability to pass an ACA repeal bill that month. However, Congress is a fickle institution and debate over repeal versus fixing the ACA's flaws have come back.

There are currently two proposals under serious consideration in the Senate. The first, is a bi-partisan fix from the Senate Health, Education, Labor, and Pensions (HELP) Committee to restructure the individual insurance market and stabilize the exchanges. HELP Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA) have held a series of four hearings over two weeks on the issue. As of September 18, Chairman Alexander indicated that the Committee hoped to have a bill drafted by Friday, September 22. The bill is expected to devolve some power of ACA enforcement to the states, most notably giving the states the power to approve insurance plans for sale and the rates insurers can charge to consumers.

This plan would also fund cost-sharing subsidies for those individuals purchasing insurance on the exchanges. This is important as a federal district court in July of last year declared the existing subsidies illegal after Congress had not appropriated the money for them in the original legislation. This ruling led, in part, to the dramatic premium increases we saw for the 2017 coverage year so, a legalization of the cost-sharing subsidies is critical to stabilizing the exchanges and lowering premiums to more affordable rates. This legislation would likely be a short term fix to stabilize the markets. In testimony before the Senate HELP Committee, orthopaedic trauma surgeon Manny K. Sethi, MD of Tennessee likened it to the work of a trauma surgeon: "We must first stop the bleeding, then work on getting healthcare healthy again."

The House of Representatives and the White House have rejected the bipartisan fix and have put all of their eggs in the repeal and replace basket. An aide for Speaker of the House Paul Ryan (R-WI) told Politico that getting the legislation through the House would be difficult, accusing Democrats of demanding too much from Republicans, a charge Democrats deny.

Update: As of September 20, this proposal is dead as Chairman Alexander has received a lot of pressure from Senate leadership to drop the bipartisan fixes in favor of the other plan currently under consideration.

The second plan, known as the Graham-Cassidy bill, is a repeal and replace bill. This legislation would:

  • Repeal the premium tax credit as of January 1, 2020;
  • Repeal the individual mandate retroactive to calendar year 2016;
  • Repeal the employer mandate retroactive to calendar year 2016;
  • Repeals the expansion of Medicaid and replaces it with block grants to states to assist those needing state assistance with purchasing insurance coverage on an exchange;
  • Medicaid financing would be reformed to a per capita cap model beginning in FY 2020;
    • States could opt out of the per capita cap model into a block grant "flexibility program".
  • Repeals the tax on Health Savings Accounts (HSA) and Archer Medical Savings Accounts (MSA);
  • Repeals the Medical Device Tax;
  • Would allow the payment of insurance premiums with HSA monies;
  • Permit individuals to pay for primary care service arrangement costs from a health savings account;
  • Increases the maximum contribution limit for HSAs;
  • Increases state Medicaid eligibility verification checks to every six months (or more frequently);
  • Permits states to implement work requirements for non-disabled, non-elderly, non-pregnant individuals receiving Medicaid;
  • Reduces the Medicaid provider tax threshold from 6% to 5.6% in FY 2021. The threshold would continue to be lowered until FY 2025 when it would reach 4%;
  • Permit individuals to purchase catastrophic only coverage;
  • Repeal the essential benefits requirement for insurers to cover certain procedures; and,
  • Repeals the prohibition on increasing premiums for more expensive patients (i.e. those with pre-existing conditions).

The Graham-Cassidy legislation has caught the eye of Senate leadership and the White House. During the week of September 18, Republican leadership including the Vice-President were whipping votes on the proposal. Republicans need 50 votes in the Senate meaning they can only afford to lose two caucus members. Senator Rand Paul (R-KY) has already called the bill "Obamacare-lite" and refuses to support it and Senator John McCain (R-AZ) has announced his opposition. Consequently, both Republicans and Democrats are leaning on Senators Lisa Murkowski (R-AK) and Susan Collins (R-ME) to support or oppose this legislation. Both of these Senators were instrumental in defeating another repeal and replace bill in July. Senators Murkowski and Collins are toss-ups because the legislation does de-fund Planned Parenthood, a sticking point for both Senators in July. Senator Collins told CNN that it is difficult to imagine a scenario in which she would vote for the bill leaving its likelihood of passage slim. Lobbyists on the Hill are already predicting that the legislation is dead when the Senate votes on it this week.

If the Senate does pass the bill, Speaker of the House Paul Ryan (R-WI) has stated that the House will take up the measure and the House Freedom Caucus has promised not to interfere with passage. This scenario seems unlikely after Senator McCain's opposition was announced. In part, because many Senators from states that stand to lose under this bill were luke-warm about it to begin with and reluctant to sign on and have drifted farther away in light of Senator McCain's opposition. Senator Shelley Moore Capito (R-WV) has been vocal in the past about federal funding for the opioid epidemic, something this bill does not provide funding for. A statement from her office indicates that the Senator is still reviewing the legislation.

Ultimately, many Republican Senators will find the opportunity to repeal a law they have railed against for seven years irresistible. Passage will hinge on a few Senators who feel electorally secure (Murkowski is very popular in Alaska and comes from an Alaskan political dynasty and Collins has announced that she will not run for her seat again giving her more flexibility to shuck the party line). Expect this vote to appear very similar to July's vote.

Graham-Cassidy has also done something that not many pieces of legislation have been able to do in the past, unite the healthcare community against what many of them see as a damaging bill. America's Health Insurance Plans (AHIP), the American Medical Association (AMA), American Hospital Association (AHA), and America's Essential Hospitals (AEH), American Cancer Society, Action Network (ACSAN), among others have come out strongly against the legislation accusing it of cutting off access to care to millions of Americans and injecting a massive amount of uncertainty into the insurance market. Unfortunately, we will be unable to determine what the impact will be because the Congressional Budget Office (CBO) has announced that it will be unable to "score" the legislation before the September 30 deadline.

AAOE will continue to monitor developments in the repeal debate as the consequences could be large for healthcare with disruptions in access to care hurting specialists in particular.

Update: Senator Susan Collins of Maine announced her opposition to the legislation on September 25, 2017 effectively killing the legislation.


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