Even without much active support from the Trump administration, one former healthcare policymaker expected “most” of the ACA marketplaces to continue to function.

July 18—After Senate Majority Leader Mitch McConnell (R-Ky.) pulled a healthcare overhaul from consideration due to insufficient Republican support, healthcare policy watchers highlighted where legislative discussions may move next.

McConnell this week pulled the Better Care Reconciliation Act (BCRA), which would repeal and replace parts of the Affordable Care Act (ACA), after it became clear that the bill did not have the support of at least 50 Senate Republicans. The move left many in Washington and in health care wondering what action would come next.

McConnell said he planned to bring up the bill Congress passed in 2015 to repeal more of the ACA than the BRCA would do, but early indications are that such a measure is also unlikely to garner 50 Republican votes. Some noted that the BCRA may return once Sen. John McCain (R-Ariz.) comes back in a few weeks from surgery.

Jim Capretta, a resident fellow at the American Enterprise Institute, said any partisan healthcare overhaul is a bad idea but acknowledged, “They may still find a way forward.”

Alternatively, some believe congressional Republicans may move on to a stabilization measure to shore up the ACA marketplaces, where enrollments have begun to drop amid steep premium increases and reduced competition.

For instance, Sheila Burke a strategic adviser for the law firm Baker Donelson and a former senior Republican congressional staff member, said McConnell may work with Democrats to fashion a bipartisan stabilization measure for 2018, which could include appropriation of $7 billion to $8 billion in subsidies for low-income enrollees’ out-of-pocket costs (i.e., cost-sharing reduction [CSR] payments).

“Those cost-sharing stabilizations are so critical to the market,” said Ceci Connolly, president and CEO of the Alliance of Community Health Plans.

Jeanne Lambrew, PhD, a senior fellow at The Century Foundation and a former Obama administration architect of the ACA, agreed that stabilization measures are among those “that may be on the table” for congressional action.

“It’s a no-brainer,” Lambrew said about measures to improve the finances of marketplace insurers and enrollees.

Sen. Lamar Alexander (R-Tenn.), chairman of the Senate Health, Education, Labor and Pensions Committee, appeared headed in that direction when he announced plans for that panel to hold market stabilization hearings in the coming weeks, according to media reports.

Such a focus would be in line with suggestions from numerous industry groups, including the American Hospital Association, which wrote a July 12 letter to the Centers for Medicare & Medicaid Services to urge a commitment to funding CSRs and enforcing the individual mandate, among other recommendations.

Administration Actions

Lambrew worried that—beyond CSR payments or risk corridor payments—the Trump administration will not provide operational support for the ACA marketplaces.

“There at some level has to be a decision by this administration that it is going to be, at a minimum, a caretaker, and at a maximum, be an owner that can steer the marketplaces toward its policy direction should it decide to do so,” Lambrew said. “In the absence of that, I do worry about what is going to happen next year.”

Specifically, she worried that the administration would stop enforcing the ACA’s unpopular individual mandate.

“It is the least-worst of the ways to get young and healthy people, people who may think they don’t need health insurance but actually do need it on Day 30, 40, 60, or 90 in the system, and I think we’re going to struggle with that as time goes on as we try to figure out what’s next,” Lambrew said.

Gail Wilensky, the former administrator of the precursor agency to CMS, doubted that the Trump administration would ever become a true caretaker of the ACA marketplaces. But even without much active support from the administration, she expected “most of them” to continue to function.

Medicaid Changes

However, the lack of long-term stability in Medicaid will require Congress to consider changes to the program, Wilensky said.

John Ayanian, director of the Institute for Healthcare Policy and Innovation at University of Michigan, urged Congress to consider marketplace stabilization measures and Medicaid changes separately. The BCRA lumped together initiatives in both areas even though they have widely divergent chances for bipartisan support.

“Those are two major parts of the ACA, both of which could potentially be improved, but by putting them together on a very tight timeline, that’s where the bill runs into great trouble,” Ayanian said.

It’s unclear whether Republicans could garner bipartisan support for an effort to overhaul Medicaid to control its future cost growth, policy watchers said. Specifically, the parties are deeply divided over whether to institute an overall spending cap on the program in the wake of a 30 percent increase—from $299 billion to $389 billion—in federal spending from 2014 to 2017.

Opponents of the BCRA have criticized the cap as blunt and “immoral.” But Capretta noted that the ACA includes two spending caps for Medicare, one of which applies to annual increases in inpatient hospital rates.

“The idea that one cap is morally reprehensible and the other morally fine, you’d have a hard time making that argument,” Capretta said. 

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

Publication Date: Tuesday, July 18, 2017