June 20, 2017

Editorial

By: Elizabeth Wood
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Efforts to repeal and replace the Affordable Care Act (ACA) are ongoing, with continued uncertainty about what may happen and when. To keep things in perspective, here’s a snapshot of recent developments.

On May 4, the US House of Representatives approved the American Health Care Act (AHCA) by a vote of 217 to 213. The major provisions of the bill, H.R. 1628, are as follows:

• refundable tax credits for buying healthcare coverage based on age rather than income

• increased limits on health spending accounts for high-deductible health plans

• a 30% insurance surcharge for people who don’t maintain continuous coverage

• elimination, after 2020, of the current federal funding rate for states’ coverage of new Medicaid enrollees

• conversion of Medicaid into a per capita block grant program

• establishment of a $100 billion Patient and State Stability fund.

These provisions are projected to save $783 billion over a 10-year period, thus reducing the national deficit by $119 billion. However, the Congressional Budget Office (CBO) said signing this bill into law would rob 14 million Americans of health insurance by 2018 and 23 million by 2026—largely because of changes to Medicaid.

A recent Kaiser Family Foundation poll of 1,205 adults found that fewer than 10% of respondents favored passing the House bill, and about 45% of respondents said they expect healthcare costs to rise. Thus far, some insurers in Connecticut, Maryland, Oregon, Vermont, Virginia, and the District of Columbia have asked for double-digit rate hikes, according to Modern Healthcare.

There’s also growing concern about insurers opting out of the insurance exchanges established under the ACA. Aetna announced in May that it will stop participating in all exchanges in 2018, and in early June Anthem said it will exit the Ohio exchange next year.

Proposed Medicaid cuts of $610 billion in core services, and an additional $250 million in reductions to Medicaid expansion programs created under the ACA, would reduce Medicaid spending by $834 million through 2026, the CBO analysis indicates.

Hospitals, especially those with a lot of Medicaid patients, could expect to see reimbursement cuts and more cases of uncompensated care caused by loss of Medicaid coverage gained under the ACA, says a HealthLeaders Media article citing a new report from Moody’s Investors Service.

“Although the budget would give states limited new flexibility to adjust their Medicaid programs, the measure overall reflects a significant cost shift away from federal funding to states,” Moody’s says.

Currently the Senate is tackling revisions to the bill. “Some observers expect a drawn-out Senate process that could last into 2018 or beyond,” says John E. McDonough, DrPH, MPA, in a New England Journal of Medicine Perspective. “Yet after the May 4 House passage of the AHCA, Republican senators began working quickly on alternatives, seeking less aggressive but still far-reaching changes to the ACA and Medicaid.”

Senate approval will likely depend on moving the legislation forward through budget reconciliation, which means blocking the filibusters requiring 60 votes and allowing it to pass with 51 votes. “That strategy may require the Senate to drop certain provisions included in the House passed bill…But there is no guarantee that the Senate will remedy the AHCA’s flaws, much less reject it outright,” according to Matthew Fiedler, PhD, et al, in another Perspective.

As for what else healthcare providers can expect, Perspective author Gail R. Wilensky, PhD, believes Medicare changes to reimbursement will continue, but at a slower pace—a trend already suggested by Medicare’s May 19 interim final rule, which delays the start of three new episode payment models (acute myocardial infarction, coronary artery bypass graft, and surgical hip/femur fracture treatment) until January 1, 2018. ✥

 

References

Cummins J. Trump budget, revised AHCA credit negatives for NFP hospitals. HealthLeaders Media. May 31, 2017.

Fiedler M, Aaron H J, Adler L, et al. Moving in the wrong direction—health care under the AHCA. Perspective. N Engl J Med. Published online May 31, 2017.

Kodjak A. Poll: Americans increasingly think their health care will get worse. NPR. Morning Edition. May 31, 2017.

Livingston S. Healthcare CEOs have zipped their lips on AHCA politics. Modern Healthcare. May 23, 2017. http://www.modernhealthcare.com/article/20170523/NEWS/170529970/healthcare-ceos-have-zipped-their-lips-on-ahca-politics.

McDonough J E. Prospects for health care reform in the US Senate. Perspective. N Engl J Med. Published online May 31, 2017.

Wilensky G R. The first hundred days for health care. Perspective. N Engl J Med. Published online May 31, 2017.

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