Cost-sharing reduction subsidies remain a major focus of insurers, even as news reports indicated this week that the administration decided to support their continuation.

April 26—The legislative battle to replace parts of the Affordable Care Act (ACA) likely will be resolved by the fall, healthcare industry leaders said this week.

Republican leaders in the House of Representatives recently restarted discussions around the American Health Care Act (AHCA), which they pulled from a planned floor vote several weeks ago after it appeared unlikely to pass. Since then, Republicans have focused on implementing amendments to bridge gaps between party moderates and conservatives. But it remains unclear how long such negotiations may drag on and whether they will be successful. 

Charles Kahn, president and CEO of the Federation of American Hospitals, said the expectation that the current ACA repeal-and-replacement battle will be resolved by the fall stems from Republicans’ use of the budget reconciliation process to pass a replacement bill. That approach allows for enactment of a replacement with a simple majority in the Senate (Republicans control 52 out of 100 seats in that chamber) but likely requires the process to finish by September, when a new budget reconciliation measure is expected for FY18.

“Using reconciliation requires a decision by September,” Kahn said during a Washington, D.C., meeting of the Network for Excellence in Health Innovation.

Because 2018 is an election year, members of Congress will be significantly less likely to act on a healthcare overhaul in that year, industry leaders said.

“They’re going to have trouble coming back next year and getting this done,” Kahn said.

Steve Ubl, president and CEO of PhRMA, agreed that a resolution to the battle over the ACA is likely by the fall. If a replacement is not enacted by then, Ubl expects the Trump administration to issue an ongoing series of administrative changes to the ACA. The administration recently issued a final rule with a range of ACA marketplace changes that were requested by health plans.

Scott Whitaker, president and CEO of AdvaMed, said the healthcare reform outlook will become increasingly clear over the summer before being resolved by the fall.

Kahn said the timeline could extend beyond the fall if Republicans shift to crafting a broadly bipartisan healthcare overhaul. But the partisan attitudes that dominate Washington, D.C., today indicate little chance that a bipartisan deal is possible.

Matt Eyles, executive vice president for America’s Health Insurance Plans, said his organization remains focused on reactions in the Senate and among state governors because both groups are expected to weigh in with concerns that insurance coverage may significantly shrink under the legislation. Governors remain especially focused on whether changes to the ACA’s Medicaid expansion will adversely their state’s population and hospitals.

The fall time frame was challenged by Frederick Isasi, executive director of left-leaning Families USA. Isasi expects the ACA to face a “a death by a thousand cuts” from various must-pass legislative vehicles between now and the early spring of 2018, with those bills implementing a range of changes to the law.

Latest Developments

Among the recent developments that have drawn concern among health plans were reports that as soon as next month, the Trump administration may end the cost-sharing reduction payments for qualifying ACA marketplace enrollees. Such a cutoff would be “hugely concerning,” Eyles said.

Discontinuation of the subsidies, which will amount to an estimated $7 billion this year, would cause insurers selling ACA marketplace policies to “reevaluate” their participation, Eyles said.

“It remains to be seen whether they will continue,” Eyles said about the subsidies, the legality of which Republicans in Congress have successfully challenged in court. The Trump administration plans to support continuation of the subsidies, according to news reports this week.

Meanwhile the AHCA’s proposed financial cuts to Medicaid continue to draw the most concern among hospitals.

“Medicaid is definitely in the crosshairs with the current bill,” Kahn said.

Medicaid funding concerns also were underscored in Isasi’s comments about proposed changes to the revived bill. Those changes included proposals to give states more flexibility in their coverage options.

 “There’s not one flexibility proposal that’s been put forward that doesn’t involve massive funding cuts,” Isasi said. “You can’t pull this money out of the system and expect a good outcome.”

Coalition Continuing?

Industry leaders said the coalition that helped craft the ACA continues to function. Advocacy organizations representing hospitals, drug makers, device manufacturers, and physicians were key to ensuring the ACA passed in 2010, according to supporters. Insurers were generally neutral on the law. But some have questioned whether that coalition has evaporated amid efforts to repeal and replace the law.

Members cited the cross-industry push for the Trump administration to maintain CSR payments as an example of the coalition’s sustained presence. However, the coalition’s drive to bolster the ACA was undermined by the 2016 election results.

“The context changed, not the people,” Kahn said.

Some participants also raised concerns about the results of the coalition’s efforts regarding the ACA. AdvaMed’s Whitaker said the medical technology industry has not seen the financial “windfall others have.”

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

Publication Date: Wednesday, April 26, 2017