Although ACA repeal is considered likely in the spring, a bipartisan coverage initiative could take its place.

Nov. 10—Health insurance companies’ short-term concerns around the unexpected victory of President-elect Donald Trump center largely on the government-run marketplaces he has pledged to eliminate.

The future of the Affordable Care Act (ACA) marketplaces is the leading concern of insurers, said Ceci Connolly, president and CEO at Alliance of Community Health Plans (ACHP).

“And specifically, not disrupting what is working,” Connolly said, referring to components of the marketplaces that have functioned well.

Although the marketplaces have been plagued by spiraling premiums heading into 2017 and by the departure of numerous insurers amid steep losses, the remaining participants have learned much about their enrollees over the last three years.

The incoming administration and Republican-led Congress need to remember “the people who already have coverage, who are already getting medical care, who have doctors, who have prescriptions; we don’t want to upend that,” Connolly said in an interview. “We know from a business perspective that uncertainty is disruptive and very challenging as well.”

Uncertainty Reigns

Trump and the members of the incoming Republican majority have repeatedly pledged to repeal the ACA marketplaces—and much of the rest of the ACA—but have provided relatively little detail about how they will do that and what will replace the 2010 law.

Beyond the Trump campaign’s limited health policy report, many are looking to "A Better Way," the health policy framework issued in June by House Republicans led by Speaker Paul Ryan (R-Wis.).

“Ryan’s replacement model will, I suspect, be the first starting point in starting to discuss this,” former Speaker of the House Newt Gingrich, a Trump advisor, said in a Nov. 10 conference call about the coming healthcare policy changes.

Such efforts by congressional Republicans to alter the ACA may be the best indicator of the likely next steps.

“If they can make the case that this in fact does meet the principles that Donald Trump campaigned on, they are likely to get his signature and they can move rapidly,” said Mike Leavitt, former secretary of Health and Human Services (HHS) under President George W. Bush.

Another indication of how Congress may approach repeal is legislation that cleared Congress for the first time in December and was vetoed by President Barack Obama in January. The legislation used the tactic of reconciliation, which required only a majority vote in the Senate and therefore could not be stopped by Democrats. However the tactic limits repeal to tax- and spending-related provisions, such as the ACA marketplace subsidies and Medicaid expansion funding.

Vincent Ventimiglia, former assistant secretary for legislation at HHS, said the new Congress is likely to again pass such an ACA repeal measure within its first 100 days. So-called sidecar legislation, which would require Democratic support in the Senate, would accompany that repeal bill to provide the replacement plan.

Clay Alspach, a former chief counsel for the House Energy and Commerce Committee, said Medicaid expansion repeal is going to be especially contentious among House Republicans because many GOP governors, including Vice President-elect Mike Pence, approved the expansion in their states and don’t want to lose the coverage.

“Those members will be very resistant to repeal the Medicaid expansion unless there is some other way to cover those folks—there’s got to be a piece in place; there’s got to be a policy that’s put forward to give them a way to say, ‘We may be taking away your Medicaid expansion, but we will cover you this way or that way,” Alspach said in a conference call with industry clients.

Bipartisan Approach

That replacement plan is likely to involve a bipartisan approach “as much as possible,” Alspach said.

“We’re getting very strong indications they will try to make this bipartisan to some degree and that it will be a stepwise approach to reform, not a wholesale replacement,”  Ventimiglia said on the conference call.

Importantly, the previously passed repeal legislation did not eliminate ACA marketplace funding or Medicaid expansion funding immediately and instead provided time before such cuts went into effect.

“There will be a transition period for those folks,” Alspach said.

A transition period would allow the federal bureaucracy time to prepare. For instance, Ventimiglia noted that any replacement system, such as a new system of tax credits to buy coverage, will require at least an 18-month lead-up time for the Internal Revenue Service to create a new regulatory framework.

Insurers and industry experts agreed that the transition period to any new coverage system would be critical.

“The Trump administration will have to run Obamacare for at least two years before they could possibly have a replacement in place,” said Robert Laszewski, a health insurance company advisor. “That means carriers—looking at an even more difficult 2018 open enrollment—will be very reluctant to participate. The Trump administration is going to have to subsidize carriers if they expect them to participate in 2018.”

Connolly agreed about the importance of a transition period. For example, the the Trump administration will have to defend ACA cost-sharing reduction payments, which cover out-of-pocket costs for some enrollees and which the House of Representatives has successfully challenged in federal court.

Not Going Away

Among the healthcare policies enacted under Obama that Alspach expects to largely continue is the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which was enacted with bipartisan support.

With MACRA, “You’re not going to see that level of change or disruption because you had both sides—Republicans and Democrats—coming together saying, ‘Let’s do this together’; they both want it to work, they both want their legacy to be a success,” Alspach said.

Interestingly, MACRA may have saved a key office in the Centers for Medicare & Medicaid Services (CMS), which House Republicans have previously targeted for elimination. That office, the Center for Medicare and Medicaid Innovation (CMMI), is seen by some Republicans as needed because it creates and oversees the advanced alternative payment models that physicians will be striving to join under MACRA.

However, a replacement law is likely to limit CMMI in several ways, such as by prohibiting it from using mandatory payment models and cutting its $10 billion appropriation for each future decade. 

The repeal legislation that passed Congress also left out all of the ACA’s Medicare cuts, which are expected to continue under any Republican replacement. The cuts will be left in to pay for the new law and because the Medicare changes are seen as embedded in the healthcare system.

“I don’t think you’ll see a wholesale ‘Let’s go back to 2010’ because there’s just too much change that’s happened subsequent to 2010,” Alspach said.

Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Thursday, November 10, 2016