NYAPRS Note: While Obamacare remains ‘the law of the land,” HHS Secretary Tom Price can still do a lot to shape how healthcare is delivered in the US over the next 4 years. For example, he can limit the kinds of drugs or services that are covered and also let states forge their own health reforms, which could include imposing work requirements or small premiums on beneficiaries.
“It’s going to be interesting to see how they balance the responsibility for ensuring the government functions with their hatred for the law,” said Spencer Perlman, director of health-care research at Veda Partners. “If they want to completely sabotage it they probably could, and call it a self-fulfilling prophecy. The Centers for Medicare & Medicaid Services’ Innovation Center has “huge authorities” which could be used to make changes to Medicaid, Perlman said. And another ACA creation, the Independent Payment Advisory Board, has “extraordinary powers” that Price can use without “a lot of legal or statutory limitation,” he said.
Pressure On Health Secretary After Ditched Vote On Obamacare Repeal
By Tom Howell Jr. The Washington Times March 26, 2017
With health care stalled on Capitol Hill, the pressure now shifts to President Trump and new Health and Human Services Secretary Thomas Price, who will have to manage a law Republicans say is failing on its own — without giving Democrats more ammunition to say it was the GOP that killed it.
Rather than face a roll call they were going to lose, House GOP leaders called off a vote Friday that was supposed to be phase one of a three-pronged plan to repeal and replace Obamacare’s heavy mandates with free market reforms.
Without the repeal, however, phase two — a series of executive actions designed to chip away at Obamacare’s expansive reach — is much more difficult, House Speaker Paul D. Ryan told reporters just minutes after the GOP bill collapsed Friday.
“This bill would have made what we call phase two much, much better,” Mr. Ryan said. “Nevertheless, I think there are some things that the secretary of HHS can do to try and sort of stabilize things, but really we need this bill to make it better.”
The bill would have been able to eat into some of the bigger parts of the Affordable Care Act, such as requirements that consumers pay for maternity care and mental health coverage, even if they don’t need those services.
Without the bill, Mr. Price can only make smaller changes, such as limiting the kinds of drugs or services that are covered. And even then, he cannot slash them below what’s covered in a typical employer-sponsored plan, according to policy analysts.
Republicans also wanted to set up high-risk pools to help states subsidize high-risk patients, freeing up healthier people to choose the types of plans they want instead of effectively subsidizing more robust coverage for sicker consumers.
“That is not now going to happen, and therefore he won’t be able to deploy that policy tool that we think is better than Obamacare,” Mr. Ryan said.
Some rank-and-file GOP members say Congress shouldn’t give up on legislative efforts, though, casting Friday’s fiasco as a timeout in a much longer contest.
“The responsible thing is to keep working on this, because it’s an important issue for the American people,” said Rep. Justin Amash, Michigan Republican and member of the conservative House Freedom Caucus, which helped doom the bill, arguing it didn’t go far enough in killing Obamacare.
For now, HHS is forced to point to efforts it already had begun to provide patients, insurers and state leaders immediate “relief” from Obamacare.
It is tightening up eligibility for “special enrollment periods,” which allow people to sign up outside of the normal enrollment season. Insurers say they have been subject to abuse by people who, rather than paying premiums over time, wait until they get sick to sign up and submit costly medical claims.
Mr. Price also told governors he is ready to use authority embedded in Obamacare, known as Section 1332 waivers, that lets states forge their own health reforms if they would outperform the current program.
Most recently, Alaska set up a “reinsurance” program so that insurers can contribute funds that protect them from big losses later on so that they don’t raise their rates even higher under Obamacare.
And some states are eyeing conservative reforms to Medicaid, the federal-state insurance program for the poor, which the Obama administration resisted but would find favor under Mr. Trump, such as imposing work requirements or small premiums on beneficiaries.
But the most pressing decision facing the White House is whether to continue cost-sharing payments that reimburse insurers for helping low-income customers.
Millions of Obamacare customers with incomes between 100 percent and 250 percent of the poverty line rely on the payments, and — with repeal off the table — health plans are still required to reduce their out-of-pocket costs whether they’re reimbursed or not.
The House Republicans had won a ruling last year that President Obama was breaking the law by making payments to insurance companies even though Congress had specifically canceled that money.
The Trump administration could easily drop the appeal, but the White House and Republicans now realize they may have to keep the payments flowing until they figure out how to get rid of Obamacare.
Timothy Jost, a law professor at Washington and Lee University who closely tracks the debate, said a decision to retain those payments should be coupled with a clear statement that they intend to enforce the individual mandate designed to keep premiums down.
“Everything else is less important,” he said.
Yet Obamacare supporters aren’t expecting Mr. Trump to shore up the program, since it would undermine his push to let the program unravel and force Democrats to the negotiating table later on.
Mr. Trump yanked up to $5 million in ads touting the main Obamacare website, HealthCare.gov, ahead of the critical Jan. 31 deadline to get covered for 2017, prompting Democrats to cry “sabotage” and request an independent probe by the HHS inspector general.
Mr. Trump also issued an executive order targeting the law within hours of taking office. As a result, the IRS said it would still process returns even if they don’t address their health coverage status.
“I anticipate we will see rate increases and health insurer departures from health markets because of President Trump’s actions undermining the ACA,” California Insurance Commission Dave Jones said Friday.
“President Trump likes to shift blame to others, but it’s his actions which are undermining the ACA.”
Now What? Options For Next Year As Health Law Drama Fades
Associated Press · Mar 25, 2017
As the political drama over health care legislation in Washington fades, the rest of the country faces a more immediate concern: Getting insurance for next year.
The Republican health plan designed to replace the Obama-era health law known as the Affordable Care Act would not have taken full effect for a few years anyway -- and now it's dead.
"We're going to be living with Obamacare for the foreseeable future," House Speaker Paul Ryan said Friday.
That means millions of Americans will have to navigate a current federal health care system that, while not "imploding" as President Donald J. Trump has said, is at least in flux.
Mary Vavrik, a 57-year-old freelance deposition court reporter from Anchorage, Alaska said she was relieved that the current health law will remain because she's happy with the coverage she gets through her exchange -- even as she acknowledged that reforms are needed.
"It's not a perfect plan but I'm really grateful to have what I do have," she said.
Prices for insurance plans offered on the public insurance exchanges set up by the health care law have soared in many markets, and choices for customers have dwindled. That's because insurers have faced sizable financial losses on the exchanges in recent years, and have responded by either hiking prices or pulling out of certain markets altogether.
Now, attention will turn to administrative changes underway in Washington designed to stabilize the exchanges by preventing more insurer defections.
The open enrollment period to sign up for insurance for 2018 is slated to start this fall, but insurers are making decisions now about whether to participate. What kinds of plans will be available and how much they will cost will depend on a few key decisions by insurers and regulators in the coming weeks.
Will I have plans to choose from?
It depends on where you live. Choices are dwindling, but chances are at least one insurer will sell in your market. That company may offer several plans.
Generally, big cities will have more choices than rural areas where there may not be enough customers to attract insurers. As of now, there are 16 counties in a region of Tennessee around Knoxville that have no insurers committed to sell coverage on the exchange next year. About a third of the nation's 3,100 counties are down to just one insurer.
Insurers have been pulling back, and more are expected to leave, but health care researchers are not predicting mass defections. "For most consumers, (2018) will look a lot like '17," said Dan Mendelson, president of the consulting firm Avalere.
Customers can try to find coverage outside their exchange, but then they won't be able to use tax credits to help pay the bills, which may be particularly painful since many markets have seen prices soar.
Are there fixes in store?
Last month, the Health and Human Services Department, which runs exchanges in many states, proposed some adjustments to try to stabilize these marketplaces.
For example, insurers want greater scrutiny of people who sign up for coverage outside of the open enrollment period. Customers are supposed to be allowed to do so only if they have a life-changing event like the birth of a child, a marriage, or the loss of a job that provided coverage, but insurers have found that people are just waiting to sign up when they need care.
Another proposed adjustment would let insurers design cheaper plans tailored to younger people who may not need lots of health care but want to be protected in the event of a big injury or sickness. That could be very helpful, because insurers say they have struggled to attract younger and healthier customers to the marketplaces to balance out the claims they pay from those who use their coverage.
Those changes are expected to be finalized in the next month or so.
When will insurers make their decisions on 2018?
Some have said they want to see the final version of the proposed federal adjustments before deciding where and what kinds of coverage they will offer.
But insurers generally have to decide by this spring whether they will participate in order to leave enough time for regulatory approvals and marketing before enrollment starts next fall.
Aetna, the nation's third largest insurer, has set an April 1 deadline for deciding on 2018. The company has already pared its marketplace participation down to 4 states this year from 15 because of heavy financial losses.
Customers won't know for certain who is selling on their exchanges until early next fall. While insurers have to apply to sell coverage on their exchanges generally by late spring or early summer, they can drop out later.
Is the Affordable Care Act "imploding" as President Trump has said on Twitter?
No. The marketplaces are not expected to dissolve next year, even though choices have dwindled.
While there's debate over the law's tax burdens and its impact on government budgets, the federal plan has covered more than 20 million people.
About 11 million are covered through an expansion of Medicaid, the health program designed to help poor Americans. Another 12 million buy private insurance through the law's marketplaces, most with help from subsidies based on income.
Here’s How Trump Could Make Obamacare Better – Or Worse
With Repeal Off The Table, The President Needs To Choose Whether To Help Or Hurt People.
By Jeffrey Young Huffington Post March 26, 2017
It’s President Donald Trump’s health care system now. The question is: What’s he going to do with it?
After the collapse of the GOP effort to repeal the Barack Obama administrations’s Affordable Care Act and enact a different set of reforms to the health care system Friday, Trump inherited programs that aren’t going anywhere and that serve tens of millions of Americans.
Trump reacted to his defeat by practically threatening to stand aside and do nothing to address the shortcomings of the law, like rising premiums and declining choices of insurers in some states. “The best thing we can do politically speaking is let Obamacare explode,” he said at the White House Friday. He made a similar statement on Twitter the next day.
Despite claims by Trump and House Speaker Paul Ryan (R-Wis.) that the Affordable Care Act is unfixable, the Trump administration has tools at its disposal it could use to make the Affordable Care Act’s health insurance exchanges more attractive to health insurers and potentially less costly for consumers. Or Trump could go in the other direction and undermine the law to bolster their case for “replacing” it later.
“I’m quite confident that unless the administration decides to not steward the exchanges because they have some draconian negotiating strategy that the exchanges will be fine next year,” said Andy Slavitt, who oversaw the exchanges as acting administrator of the federal Centers for Medicare and Medicaid Services under President Barack Obama.
“If they choose to screw with them, they control all the branches of government and I think they’ll be judged very harshly,” Slavitt said.
The White House and Department of Health and Human Services so far have sent mixed messages to the industry and consumers about what to expect.
Trump issued an executive order on his inauguration day directing federal agencies to relax Affordable Care Act rules, and the IRS responded by announcing it wouldn’t reject tax returns that failed to include information about health coverage under the law’s individual mandate, for example.
But the administration also has taken some steps to quiet anxiety among health insurers that the exchanges next year won’t function properly and that losses some have suffered ― and that drove some insurance companies out of the market entirely ― will continue. Insurers have until late June to decide whether to sell policies on the exchanges next year.
And the key to shoring up the health insurance exchanges right now is catering to the carriers, even if those same changes make the law less consumer-friendly.
“The program doesn’t work for consumers if there are no insurers participating,” said Larry Levitt, senior vice president of the Henry J. Kaiser Family Foundation.
There are limits to how much improvement, or damage, Trump could make to the health insurance exchanges, but there are several key actions that will go a long way to determining whether his administration wants to make the markets work better or worse.
How To Make It Better
Pay the subsidies
In addition to the tax credits the Affordable Care Act offers to low- and middle-income households to reduce their monthly health insurance premiums, the law provides extra subsidies to the poorest enrollees that cut their out-of-pocket costs like deductibles and copayments.
These subsidies are paid to health insurance companies directly, and the law requires them to reduce eligible customers’ cost-sharing whether the federal government makes the payments or not. And nonpayment isn’t a theoretical problem; it’s a real one.
House Republicans sued the Obama administration in 2014 to halt these payments, arguing the funding needs congressional approval it didn’t receive. A federal judge sided with House Republicans last year, prompting an appeal from Obama’s Justice Department. When Trump took office, his administration became the defendant, so he and congressional leaders got the court’s permission to delay the proceedings.
What they do next is crucial. If House Republicans drop the lawsuit or appropriate the money to keep the subsidies flowing, it not only would make sure low-income families keep their benefits, but it would quell a major source of worry for insurance companies.
Enforce the mandate
The individual mandate (and the fines taxpayers owe if they aren’t covered and don’t qualify for an exemption) is the least popular part of the Affordable Care Act, especially among Republicans. But it’s also vital for keeping the exchanges operating, because it pushes people with less medical need into the insurance pool, where their premiums offset the costs of treating sicker people.
The IRS announcement earlier this year made insurers nervous, but a strong signal now from the administration that it will make people comply with the law could alleviate that. “It’s insurer perceptions that matter here. If they’re not confident that this market is going to work, then they’re going to run for the exits or raise premiums,” Levitt said.
Work with the states
Alaska and Minnesota already are taking matters into their own hands to improve the health insurance markets in their states. Health and Human Services Secretary Tom Price has invited states to apply for “waivers” the Affordable Care Act created that could give them flexibility to redesign the exchanges themselves.
“That gets states more engaged,” Slavitt said. “It creates different solutions and, as far as I’m concerned, so long as you’re meeting the core requirement of covering more people with high-quality benefits, let the states experiment.”
One form that could take, Levitt explained, is helping states set up “reinsurance” funds like the one in Alaska. These compensate insurers that experience higher-than-expected costs, which allows them to charge lower premiums. And lower premiums mean less federal spending on tax credits, so these programs can actually save the federal government money, Levitt said.
Sign up more people
Enrollment on the health insurance exchanges dipped this year, partly because the Trump administration halted some outreach and advertising the Obama administration planned for the end of the 2017 sign-up period.
They could choose a different path for the coming enrollment campaign and work to sign up more customers, especially younger, healthier ones, which would strengthen the market for everybody, Levitt said.
“It’s potentially the most stabilizing thing the Trump administration could do,” Levitt said.
Be flexible with insurers
Not all consumers would like this, but Price has some leeway to allow health insurance companies to offer policies with fewer benefits, which would lower premiums in exchange for less coverage.
The Affordable Care Act requires health plans to cover 10 “essential health benefits,” like hospitalizations and prescription drugs, but gives the Department of Health and Human Services the authority to specify how that works.
Price would, for example, allow insurers to sell policies that only cover generic prescription drugs or that set limits on how many rehabilitation service visits a patient could have in a year, Levitt said.
“There are tradeoffs and consequences in all these changes,” Levitt said. “There’s a big difference between taking administrative steps to sabotage the law and moving it in a more conservative direction,” he said.
How To Make It Worse
Cut off the subsidies
If Trump gives in on the House Republican lawsuit or if Congress refuses to fund the cost-sharing reductions, it could blow up the insurance exchanges quickly. Health insurance companies might be able to leave the markets right away, tossing millions off their plans to prevent facing billions of dollars in losses. And they wouldn’t come back.
“If they wanted to destroy the insurance market immediately, then the easiest thing they could do would be to stop paying,” said Timothy Jost, a professor at Washington and Lee University Law School.
Ignore the mandate
Trump could continue along the path the IRS started by making clear to the public that his administration won’t penalize people who don’t get health coverage.
“Weakening the individual mandate could very well sabotage the individual insurance market,” Levitt said.
“Insurers would perceive weakening the individual mandate as a sign that the administration is trying to sabotage the law,” he said. Fear that healthier consumers would opt out without the threat of a fine would spook insurers into avoiding the exchanges, he said.
Let enrollment stagnate
The next sign-up period for the health insurance exchanges begins Nov. 1. The administration could choose to pick up where Obama’s team left off and engage in a nationwide campaign to publicize health insurance enrollment and help people apply for coverage.
Or they could scale back this work, as they did early this year, and leave enrollees to their own devices, which would result in lower enrollment overall and likely make the insurance pool sicker, because those with the greatest health care needs would be the most prone to sign up without help or reminders.
“It will be Secretary Price’s legacy forever if he acts in ways that are destructive to the American people. And he knows that people will die if they lose their coverage,” Slavitt said.