News 5/26/2017

BenefitsPro: Opposition Mounts As CBO Report Details AHCA Shortcomings

The Congressional Budget Office released its score of the American Health Care Act passed earlier this month by the House of Representatives, further increasing the opposition of the legislation by AARP and groups representing hospitals and doctors. 

The CBO and the staff of the Joint Committee on Taxation estimate by 2026, 23 million more people would be uninsured under the AHCA than under the Affordable Care Act, leaving 51 million Americans uninsured.

“Although the agencies expect that the legislation would increase the number of uninsured broadly, the increase would be disproportionately larger among older people with lower income — particularly people between 50 and 64 years old with income of less than 200 percent of the federal poverty level,” the CBO writes. 

The current version of the American Health Care Act might save $119 billion over 10 years.

People with pre-existing conditions would not be able to purchase insurance in the individual market at premiums comparable to those under current law, if they could purchase it at all — despite the additional funding that would be available under the AHCA to help reduce premiums, according to the CBO.

Although premiums would decline, on average, in states that chose to narrow the scope of “essential health benefits,” some people enrolled in the individual market would experience substantial increases in out-of-pocket spending on health care or would choose to forgo the services, the CBO writes. 

AARP Executive Vice President Nancy LeaMond on Wednesday released a statement contending that the CBO scoring showed that the AHCA would impose a devastating “age tax,” and would also weaken protections for those with pre-existing conditions.

“According to CBO, premiums for a 64 year old earning $26,500 a year would increase by a whopping $14,400 in 2026,” LeaMond says. “Additionally, after facing a massive premium increase as we age, the bill weakens Medicare funding, opening the door to turning Medicare into a voucher program that shifts costs for prescriptions and insurance to seniors, at the same time it gives big drug and insurance companies and other special interests a sweetheart deal.”

Groups representing hospitals and doctors tell Modern Healthcare their main concern is the AHCA’s impact on Medicaid enrollment. According to the CBO, Medicaid enrollment would be lower throughout the coming decade, culminating in 14 million fewer Medicaid enrollees by 2026, a reduction of about 17 percent relative to the number under current law.

“We cannot support legislation that the CBO clearly indicates would jeopardize coverage for millions of Americans,” says Rick Pollack, president of the American Hospital Association.

Dr. Andrew Gurman, president of the American Medical Association, adds that low-income families on Medicaid would be hardest hit.

“We understand the Republican point of view that the current escalation (in Medicaid spending) is unsustainable for the country,” says Dr. Akram Boutros, CEO of Cleveland’s MetroHealth System, which sees about 140,000 Medicaid patients every year. But shifting costs to states, and ultimately, reducing eligibility and cutting payments to providers is not the answer, adding that Medicaid has the slowest growth in spending of any payer.

On the other hand, the AHCA would result in a net increase in spending of $43 billion for the Medicare program stemming from changes in payments to hospitals that serve a disproportionate share of low-income patients, the CBO writes.

If Senate Republicans want to pass the AHCA, they’ll need the support of not only the most conservative senators but also many Republican moderates — a “tricky balancing act,” according to Reuters.

The CBO’s estimate of the AHCA’s impact on deficit reduction is likely to please conservatives, Reuters reports. According to the CBO, over the 2017 — 2026 period, enacting the AHCA would reduce direct spending by $1.1 billion and reduce revenues by $992 billion, for a net reduction of $119 billion in the deficit over that 10-year period.

Senate Majority Leader Mitch McConnell tells Reuters conservative Sen. Ted Cruz is on board with helping to craft that chamber’s version of the replacement bill.

“I’m grateful that he wants to help us get an outcome here,” McConnell says.

However, many Senate Republicans have misgivings about the House-passed legislation, according to Reuters.

When asked about behind-the-scenes work among Senate Republicans on hammering out the provisions of a health care bill, McConnell says in another Reuters article, “I don’t know how we get to 50 (votes) at the moment. But that’s the goal. And exactly what the composition of that (bill) is I’m not going to speculate about because it serves no purpose.”

Sen. Susan Collins released a statement after the CBO scoring, stating the AHCA is not the answer, but a bipartisan bill — like the one she and Sen. Bill Cassidy is currently working on — would be.

“Senator Cassidy and I recently brought together a group of Republicans and Democrats to determine whether there is a bipartisan path forward on a new health care reform bill,” Collins writes.

“I urge my colleagues to support the comprehensive ACA replacement plan Senator Cassidy and I introduced that will allow more Americans to obtain health insurance, preserve significant consumer protections, and help moderate the cost of health care.”

Collins emphasizes that the ACA needs “substantial reform.”

“The individual health insurance markets are in danger of collapsing in many states, 28 million Americans remain without coverage, and those who do have coverage are experiencing huge spikes in out-of-pocket costs,” Collins writes.

Meanwhile, employers should be anticipating how the AHCA, if enacted, could eventually impact their slice of the health care market, says Kim Buckey, health care regulations expert and vice president of client services at DirectPath.

In states which elect to waive the requirement for plans to cover essential health benefits, some employers might choose to offer plans without such benefits, which would affect annual and lifetime coverage limits and out-of-pocket limits, Buckey says.

“Since we know how important health insurance is to employees and prospective employees, employers will be very cautious about adopting such a change given the potential impact on employee attraction and retention,” she says.

But no matter what happens, employers should communicate their benefits and compensation philosophy, and perhaps detail their costs.

“Employees are never going to like increased cost sharing, but if they can understand why it’s happening, it should reduce some tensions,” Buckey says. “Employees will be more wary of ‘big ticket’ items like expensive tests and surgeries, and will look for all the help they can get in controlling those costs.”

Read the article here.

(Katie Kuehner-Hebert is a writer for BenefitsPro.)

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