No matter whether you love or hate the Patient Protection and Affordable Care Act, what’s become clear is that 2017 will bring major changes to the federal health care reform law.
President-elect Donald Trump and Republicans controlling Congress have made repealing the law a top priority early in the new year. Nobody knows for sure exactly what will happen, although there’s plenty of belief that popular aspects of the law may remain in place. That includes prohibiting insurers from rejecting coverage for people with pre-existing conditions and allowing adults to stay on their parents’ coverage until they are 26.
In post-election interviews, the president-elect said he favors keeping those parts of the law. Whatever path he and Congress take, the bottom line is there’s no status quo for the ACA.
Rick Murdock, the retiring executive director of the Michigan Association of Health Plans, doubts that Congress will get rid of the law entirely.
“I don’t think we’ll actually ever have a repeal, per se. I just think that through amendments or revisions, they’ll fundamentally change the ACA,” Murdock said. “At some point, there may be repeal, but it may be a non-issue if you do enough changes along the way.”
One potential scenario is that Congress passes a repeal in early 2017 that won’t take effect until 2018 and then spends the year working to fashion some sort of replacement.
For the immediate future, anybody who enrolled in coverage through the public health exchange at healthcare.gov during the recent open enrollment period — or in Medicaid under the ACA’s expanded coverage criteria — need not worry about immediately losing coverage early in the new year, Murdock said.
“Those decisions are good, so people shouldn’t be concerned or worry about, ‘Well, I’m signing up now, but it’s going to be gone in January.’ That’s not going to happen,” he said.
TARGETING PURCHASE MANDATES
In the days following the Nov. 8 president election, the Ann Arbor-based Center for Healthcare Research and Transformation reviewed potential approaches the incoming president and GOP could take regarding the ACA.
Among ideas from House Republicans is eliminating the expansion of Medicaid and the public health exchange, shifting Medicaid funding to the states through block grants — a step the incoming president also favors, and allowing greater use of health savings accounts. A House proposal would retain protections for people with pre-existing conditions, allow young adults to stay on their parents’ coverage until 26, and prevent health insurers from dropping coverage for people when they get sick, according to the Center for Healthcare Research and Transformation.
President-elect Trump has voiced support for making health premiums tax deductible, creating high-risk pools, reducing Medicaid funding while increasing block grants to states, and allowing the importation of drugs. He also said he’d support letting insurers sell policies across state lines.
The most contentious parts of the law — such as the mandates that everybody buy coverage or pay an annual penalty, and the requirements for employers with 50 or more full-time equivalent employees to offer health insurance — are likely to get targeted. Repealing the purchase mandate on individuals and employers, however, could prove troublesome if Congress wants to keep the issue guarantee for coverage regardless of a person’s health status or pre-existing condition.
An issue guarantee without a purchase mandate would create an insurance risk pool that is financially unsustainable.
“They’re creating what people are calling a ‘death spiral,’” Murdock said.
REPEAL AND REPLACE?
Outright repeal of the ACA requires 60 votes in the Senate, while budget authorizations for aspects that impact federal spending only require a majority vote. Aspects that could go away through the budget process include the individual and employer mandates, tax credits for individuals and small businesses, Medicaid expansion, an excise tax on medical devices, and the so-called “Cadillac tax” on high-value health plans.
The complexity of the ACA makes repeal “extremely complex because the law is sweeping and includes many provisions that go beyond health insurance coverage issues,” according to the November briefing from Center for Healthcare Research and Transformation.
Because of the law’s complexity, Small Business Association of Michigan President and CEO Rob Fowler believes Congress will repeal that law “and replace it with something that looks a little bit like it.” He urges the incoming president and Congress to take a methodical approach with well-defined goals to avoid unintended consequences.
“This is going to be like defusing a bomb,” Fowler said. “There are certain things that if you don’t do in the right order, you make it a whole lot worse. To say we’re going to keep the pre-existing conditions and get rid of the individual mandate sets up a disaster.”
Fowler also worries that getting rid of subsidies for some people to buy coverage will result in the uninsured rate going up and more shifting of costs by care providers onto the insured to cover the cost of uncompensated care.
Fowler hopes that action on the law goes beyond a mere “light show” of quickly getting rid of the unpopular aspects to keep campaign promises. Congress needs to look at the core issue of the cost of care and its impact on the cost of health coverage.
“I hope that there is a real effort to look at the issues that drive costs and cost to whom, and in this case I mean the payer of the premium,” Fowler said.
HOPING FOR SIMPLICITY
Phil Weaver, the CEO of Grand Rapids-based Hope Network, points to the taxes imposed by the law that have burdened employers. He hopes any changes at least simplify the ACA and the litany of rules and regulations created and enforced by an array of federal agencies.
“In my opinion, there are some great parts (of the law) with any time you can say we’re going to cover people with pre-existing conditions and those kinds of things. But any time you have 20,000 pages of rules, for anybody to follow that, it’s pretty difficult to do. We made it almost too difficult to read and understand that it’s impossible — whether it’s an insurance company, or a hospital or a place like Hope Network — to really fully understand all of the implications that happen,” Weaver said. “I’m not an expert on writing law. I would hope we would keep in there that we want to find ways for more efficient services for more individuals in the country and lower the cost, but that’s easy to say and harder to do.”
Murdock of the Michigan Association of Health Plans would like to see changes that give more flexibility in buying benefits.
The ACA mandates a list of essential minimum benefits a policy must provide, and the public exchange sells plans based on a tiered system of varying deductibles and co-pays that determined the premium. Murdock envisions providing greater flexibility on what kind of benefits people can purchase.
“I could see a scenario where you might have a floor, if you will, and then people just buy up based upon their need,” he said. “Is there a way to develop a less-comprehensive package and provide flexibility for people to buy up for services that may be unique for their situation?”
The association, which represents HMOs in the state, does not favor one particular approach to the ACA, Murdock said. Sticking with the MAHP’s long-held mantra, he said members would back “anything that can provide affordable coverage” and “anything that can improve the competitiveness” of insurance markets.
“It has to add value to competitiveness and it has to add value to affordable pricing so it can be an attractive thing for consumers,” Murdock said. “When we look at it through those lenses, we have to wait and see what’s coming at us.”