News 5/25/2017

Healthcare Finance News: Providers Still Hate AHCA After Revised CBO Score Shows 23 Million Uninsured

As expected, Democrats have strongly reacted to the Congressional Budget Office report that estimates 23 million more people would be without health insurance under the American Health Care Act.

In 2026, an estimated 51 million people under age 65 would be uninsured, compared with 28 million who would lack insurance that year under current law, the CBO said in its report released Wednesday.

But reaction from Republicans has been relatively limited. GOP Senators have said they’re writing their own version of a healthcare bill to replace the Affordable Care Act.

Republicans who have spoken out have turned the discussion into how something needs to be done as the ACA is failing.

House Speaker Paul Ryan has this on his website: “Democrats are already trying to blame Republicans for #Obamacare’s collapse, but this law has been crumbling to pieces since its enactment.”

Health and Human Services Secretary Tom Price said the CBO has gotten its analysis wrong, and that under the ACA, premiums in the individual market have more than doubled.

“In reality, Americans are paying more for fewer healthcare choices because of Obamacare, and that’s why the Trump Administration is committed to reforming healthcare,” Price said.

Insurers and America’s Health Insurance Plans have been quiet on the CBO report, while provider groups have been outspoken in their opposition to the AHCA.

The American Hospital AssociationAmerican Medical Association and others are urging the Senate to ensure that Americans who now have coverage, don’t lose it.

The Advisory Board’s Chief Research Officer Chas Roades and Senior Consultant Yulan Egan wrote a letter to Advisory Board’s hospital and health system members telling them to double down on cost reduction because of the rise in uncompensated care should the AHCA be passed.

“This report should be a wake-up call for providers, because if the House-passed AHCA becomes law you’ll need to bolster your safety net strategy,” Roades and Egan said. “States would likely respond to a decrease in federal Medicaid funding in a variety of ways: for example, using federal waivers to experiment with consumer-driven insurance design or delivery system reforms. That means hospitals and health systems would need to be much more proactive in developing their safety net strategy.”

CBO estimates that the AHCA would reduce federal funding for Medicaid by $834 billion between 2017 and 2026.

“Today’s estimates from the nonpartisan Congressional Budget Office show that last-minute changes to the AHCA made by the House offered no real improvements,” said Andrew W. Gurman, MD, president of the American Medical Association. “Millions of Americans will become uninsured–with low-income families on Medicaid being hit the hardest.”

Medicaid coverage is likely to be an issue in a Senate healthcare bill. The AHCA gets rid of the ACA’s Medicaid expansion, and President Trump’s budget released Tuesday cuts more than $600 billion from Medicaid. The budget changes Medicaid from an entitlement to a capped benefit, based on the number of beneficiaries in a state.

AHIP President and CEO Marilyn Tavenner reacted to this challenge in a May 23 letter sent to Senate Finance Committee Chairman Orrin Hatch, in response to a request for comments on issues of health reform legislation.

The Medicaid program provides coverage to almost 70 million Americans, and more than 50 million receive coverage through private Medicaid health plans, Tavenner said. The individual market delivers private coverage to approximately 20 million people – about half of whom buy coverage through state and/or federal exchanges.

The individual market and Medicaid are closely related given the populations they serve, Tavenner said. Many people with Medicaid are employed but do not have employer-sponsored coverage. As they move up the economic ladder, they may lose eligibility for Medicaid and thus need affordable coverage in the individual market, she said.

AHIP again asked for market stability through the continuation of cost-sharing reduction payments.

The AHCA also affects employer-sponsored insurance plans, said Kim Buckey, vice president of client services at DirectPath.

For larger employers, the emphasis is on the essential benefit issue, she said. If states pick and choose what’s going to be an essential health benefit, employers can choose which states package they base their plans on.

“Those decisions affect out-of-pocket limits and annual limits and lifetime limits,” Buckey said. “We might see an uptick in voluntary benefits, people might want to purchase an additional level of protection. It certainty puts a burden on the insurance company to be more creative in plan design.”

Buckey said she does not expect to see many changes going into 2018 for employer-based insurance, as employers on a January 1 cycle are now setting their plan design for the coming year. First, states would have to elect to waive the essential health benefit and then employers would have to decide whether to base their plans on a pared back definition, she said.

“Even if the bill as it stands now were to become law, it would be years before we saw real impact on the employer market,” she said. “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.”

Democratic Representative Bill Pascrell, Jr. of New Jersey, member of the House Budget and Ways and Means Committee, said the CBO reports that the average monthly premium paid by a 64-year-old would increase by as much as $14,400 under this bill.

Rep. Sander Levin of Michigan, Ranking Member of the Ways and Means Subcommittee on Health, said the bill “… also highlights that if you have a pre-existing condition, or if you are older, or if you have limited means, your premiums will be higher, and in some cases you may not be able to purchase insurance at all.”

Small Business Majority Founder and CEO John Arensmeyer the AHCA would be a disaster for small businesses because it would destabilize the health insurance market, cause premiums to skyrocket and leave millions of people with pre-existing conditions unable to afford coverage.

“Since the amended version of the AHCA allows states to opt out of many ACA requirements, those opt-outs would result in people with pre-existing conditions being priced out of the market for non-group plans,” he said. “The CBO notes that community-rated premiums would gradually increase, and those who are already sick would not be able to purchase non-group health insurance at affordable premiums — if at all.  As a result, many solo entrepreneurs would likely be forced out of the insurance market entirely. This means many small firms would close up shop while others would never get off the ground.”

Read the article here.

(Susan Morse is the Associate Editor at Healthcare Finance News.)

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