Health Care Reform: Changes Coming to National Health Plan

By Dana Beezley-Smith, Ph.D.
November 8, 2017



health care costsWhen GOP members of the U.S. Senate failed to garner enough votes to repeal the Affordable Care Act (ACA), constituents wondered if they’d ever been serious about their pledges. The House of Representatives delivered over 50 repeal bills, and in December 2015 the Senate passed an amended version, confident that President Obama would veto it. Now, with President Trump demanding that they “put a bill on my desk,” lawmakers look less resolved.

A Senate process called reconciliation, allowing a simple majority vote, expired Sept. 30 and Republicans had few votes to spare. The latest repeal effort was doomed by Sens. John McCain, R-Ariz., Susan Collins, R-Maine, and Rand Paul, R-Ky. The proposal largely directed ACA subsidies and Medicaid dollars back to the states.

The three differed in their reasoning. Collins expressed worry over Medicaid financing, while McCain said he wouldn’t support any bill that didn’t conform to “regular order.”

“I couldn’t in good conscience vote to just keep the Obamacare taxes and keep the Obamacare spending,” Paul explained. “Republicans did not promise to block grant Obamacare; they promised to repeal. I think it’s actually better to monitor the death spiral of Obamacare.”

But behind the scenes, Paul had been meeting with the administration about executive fixes to the ACA, and in October Trump was poised to act. “Since Congress can’t get its act together on HealthCare,” Trump tweeted, “I will be using the power of the pen to give great HealthCare to many people – FAST.”

Paul recommended that the administration reinterpret federal regulations to offer more options to those buying insurance on their own or receiving coverage through small employers. Such Americans could purchase Association Health Plans (AHPs) in bulk through cooperatives.

“How will it work?” Paul wrote in an op-ed. “Well, nationwide associations like the National Restaurant Association will be allowed to form groups across state lines and, with the leverage of size, demand Big Insurance bring down their outrageous premiums. Many of the 28 million people left behind by Obamacare who still don’t have insurance work low-wage jobs in our fast food restaurants.”

The president confirmed the move in an executive order; federal agencies will flesh out how these plans would work and who would gain access. The provision is likely to face legal challenges from state attorneys general, who worry that consumers could choose less comprehensive insurance.

Trump’s order also expanded individuals’ freedom to buy short-term policies and called for flexibility in employer-funded health savings accounts.

Finally, the order asked government agencies to consider means of increasing competition and consumer choice and halting insurer consolidation and hospital mergers.

Lee Carter, president of the communication strategy firm Maslansky and Partners, believes that Trump is “using executive orders to push Congress to do their jobs.”

The executive order was quickly followed by two more, one ending funding for the ACA’s “cost-sharing subsidies” to insurers and another allowing employers with religious or moral objections to avoid offering contraceptive coverage.

While the government’s billions in cost sharing reduction (CSR) payments were deemed illegal by a federal court, both Trump and Obama had continued disbursements. Trump’s order means insurers must absorb the expense of honoring reductions in deductibles and copayments to ACA enrollees who earn up to 250 percent of the federal poverty level (FPL) and buy Silver-level plans.

A group of pro-ACA analysts were surprised to find that the order will likely improve “affordability and comprehensiveness of coverage” for those with incomes between 200 percent and 400 percent FPL. Depending on state action, many can transition from Silver to Gold policies at reduced or no additional expense.

The only loser, they wrote, “is the federal government, since it will have to pay larger premium subsidies to offset the more expensive Silver plans.”

As for the contraception rules, law professor Nicholas Bagley expects “a bunch of advocacy organizations will immediately file suit” and receive an injunction preventing implementation.

At a Senate hearing, Sen. Bill Cassidy, R-La., coauthor of the latest repeal bill, expressed frustration that he’d been unable to obtain cooperation from his Democrat counterparts. “When I ask people, ‘Will you help me?’ – three years I’ve been doing this – and for three years I was basically told, ‘Nice try,’ ” he said.

Many believe Congress members could be motivated to work together if the president ended, as he has threatened to do, their special exemptions and subsidies.

While the ACA initially required Congress and its staff to live under the law as do ordinary citizens, officials at the Obama-era Office of Personnel Management permitted them separate coverage through Washington, D.C.’s small business health options program (SHOP) – and up to $12,000 in federal subsidies per person. SHOP coverage is only available to companies with 50 or fewer employees, but in November 2013, undisclosed individuals attested in writing that the House and Senate each had only 45 employees.

The president is suggesting a willingness to work with Democrats on health reform but is still committed to ACA repeal and replacement. He also pledges that this regulatory action is “only the beginning.”

Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., proposed a two-year extension of the CSR payments that Trump said he would support to cover the program while a permanent fix is being drafted.

“In the coming months, we plan to take new measures to provide our people with even more relief and more freedom.”

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Dana Beezley-Smith, Ph.D., is in private practice serving children, adults and families in Green, Ohio. Her email is: drdana@me.com.

 

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