POLICY BRIEFINGS


Hart Health Strategies provides a comprehensive policy briefing on a weekly basis. This in-depth health policy briefing is sent out at the beginning of each week. The health policy briefing recaps the previous week and previews the week ahead. It alerts clients to upcoming congressional hearings, newly introduced bills, regulatory announcements, and implementation activity related to the Patient Protection and Affordable Care Act (PPACA) and other health laws.


THIS WEEK'S BRIEFING - MARCH 13, 2017


GOP Releases ACA Reconciliation Recommendations


Last week, Republican leadership in the House unveiled their plans to repeal and replace the Affordable Care Act (ACA). The American Health Care Act (AHCA) would repeal the ACA’s insurance coverage mandates, but allow insurers to raise premiums up to 30 percent for people who have a gap in coverage of two months or more. AHCA would eliminate nearly all of the ACA’s taxes beginning in 2018, with the exception of the Cadillac tax on high-cost health plans. AHCA would allow the Cadillac tax to take effect in 2025, instead of 2020 as currently scheduled, in order to ensure that the reconciliation bill does not add to the deficit after 10 years. The plan would replace the ACA’s subsidies with refundable tax credits of between $2,000 and $4,000 annually adjusted by age and phased out for individuals making more than $75,000 per year. The legislation would create a Patient and State Stability Fund, meant to give states flexibility to design programs for their specific patient populations. The funds could also be used to increase access to preventive services. Medicaid expansion enrollment would be frozen at the end of 2019, with a plan to grandfather in current enrollees. States that didn’t expand their Medicaid programs under the ACA would be offered financial support, and disproportionate share hospital (DSH) payments would be reinstated. Medicaid would be transitioned to a percapita allotment. The bill would also defund Planned Parenthood for one year. Additionally, AHCA expands and enhances health savings accounts (HSAs). President Trump has endorsed the House GOP repeal and replacement plan, expressing hope that it will quickly pass Congress. Congressional Republicans will likely need the President’s help in unifying their own members in support of the legislation in order to have the necessary number of votes for passage. U.S. Department of Health and Human Services (HHS) Secretary Tom Price also supports the plan as a good first step to reform the health care system. The White House hopes to have a bill on the President’s desk by April.

Reception in the House: While GOP leadership continues to defend the plan as a work in progress, AHCA had a lukewarm reception among rank-and-file conservatives in the House, casting doubts about whether the legislation can pass. The most conservative members of the Republican Party do not believe that the plan goes far enough to fully repeal the ACA and Medicaid expansion, and are concerned about the potentially high cost of the measure. Many are characterizing the refundable tax credit to help people purchase insurance as a new entitlement program, and are opposed to the retention of the Cadillac tax. The House Freedom Caucus has gone so far as to indicate that they will release their own repeal-and-replace plan that mirrors the repeal legislation passed in 2015 but vetoed by then-President Obama. While the Freedom Caucus has not voted to take a formal position on AHCA, opposition from the entire caucus would kill the legislation. The GOP can only afford 20 defections, assuming Democrats are united in opposition to the bill.

Waiting on a Score: The fact that the markups were taking place before a Congressional Budget Office (CBO) score was available was the subject of much debate. The CBO score analyzing the cost of the bill as well as its impact on health insurance coverage is expected in the coming days. Republicans have insisted that a score will be available before the floor vote. Leadership has acknowledged that their plan will cover fewer people than the ACA, but will increase access to medical care instead of increasing access to insurance. The White House also announced plans to release a score from the Office of Management and Budget (OMB), citing concerns about CBO’s history of inaccuracy with regard to their score of the ACA. Speaker Paul Ryan (R-Wis.) has gone so far as to guarantee the 218 votes necessary for House-passage. He is selling the plan as an opportunity for members to keep their central campaign promise of 2016. He also outlined to his members the additional phases planned for repeal and replace in the coming months. Budget reconciliation is the first of three phases, and would be followed by administrative actions to deregulate the market. Lawmakers could then turn to passage of additional legislation via regular order to replace ACA provisions that cannot be accomplished through reconciliation due to Senate rules, such as the ability to sell health insurance across state lines.

Reception in the Senate: While Majority Leader Mitch McConnell (R-Ky.) embraced the plan and promised to bring it to the Senate floor before the two-week April recess (which begins April 7), the plan did garner criticism from a number of Senate Republicans. Sens. Rob Portman (R-Ohio), Shelley Moore Capito (R-W.V.), Cory Gardner (R-Colo.) and Lisa Murkowski (R-Alaska) have all said they will vote against the bill unless it is revised so as not to disrupt access to care for the Medicaid expansion population. Sen. Murkowski is also opposed to the provision that would defund Planned Parenthood. Sens. Mike Lee (R-Utah) and Tom Cotton (R-Ark.) have come out against the bill, and Sen. Susan Collins (R-Maine) has expressed doubts about whether she will be able to vote in favor of AHCA. Sen. Rand Paul (R-Ky.) went so far as to declare the measure “dead on arrival.” Republicans can only afford to lose two members and still pass the bill.

AHCA Opposition: Democrats are unified in opposition to the reconciliation measure, citing concerns that it will strip insurance from millions of people, and only serve to benefit those with high incomes. The American Hospital Association (AHA), the American Medical Association (AMA), the American Nurses Association (ANA), and AARP have all issued statements in opposition to the bill.



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