Column | Payment, Reimbursement, and Managed Care

Forecast: ACA tug-of-war to continue through 2020

Column | Payment, Reimbursement, and Managed Care

Forecast: ACA tug-of-war to continue through 2020

Given the political realities of a divided government, the forecast through 2020 calls for a continuation of the tug-of- war over the Affordable Care Act (ACA) in Washington.

With the ongoing expansion of the field of Democratic Party contenders for the presidency in 2020, not to mention the continuing battle over the ACA between the Trump administration and congressional Democrats, many different viewpoints on how the U.S. healthcare system should be organized and paid for have emerged.

The sincerity of each of the proposals is without doubt, but in light of political realities, the various plans have widely differing prospects for actually being enacted. Some could be described as largely just provocative vision casting, while others seem to be efforts to bridge the partisan divide and practice the art of the possible. The proposals on the table generally fall into three categories: single-payer options, public-plan options and, given the current state of divided government, realistic near-term options. 

Single-payer options

Vermont independent Sen. Bernie Sanders  has famously championed the concept of a government-run national health insurance system for many years. In December 2013, he introduced the American Health Security Act of 2013, which garnered no co-sponsors and never made it out of the U.S. Senate Committee on Finance. 

Sanders campaigned for president in 2016 with a single-payer system, dubbed “Medicare for All,” as his best-known policy prescription. In September 2017, Sanders introduced the Medicare for All Act of 2017. Strikingly, he collected 16 cosponsors, a third of the Democratic senators, including four fellow 2020 presidential candidates: Cory Booker (D-N.J.), Kirsten Gillibrand (D-N.Y.), Kamala Harris (D-Calif.)  and Elizabeth Warren (D-Mass.). To date, Sanders’ 2017 bill has been the most-analyzed Medicare for All bill, with its broad span of care, no cost sharing, phased-in implementation and several detailed tax increases, as well as many third-party estimates of its cost and economic implications.

However, on Feb. 27, Rep. Pramila Jayapal (D-Wash.) introduced H.R.1384, the Medicare  for All Act of 2019, which was positioned as an “improved” version of the Sanders 2017 plan.  It attracted 106 co-sponsors, all Democrats. Notably, not among its co-sponsors were the House Democratic leadership, including Speaker of the House Nancy Pelosi (D-Calif.), House Energy and Commerce Committee Chair Frank Pallone, Jr. (D-N.J.) and House Ways and Means Committee Chair Richard Neal (D-Mass.).

The Jayapal plan features a more aggressive implementation schedule, a broader span of care, no cost sharing and elimination of all the ACA’s value-based care programs. Remarkably, despite its obvious significant expansion of the federal government, the Jayapal plan taps only the funding of existing federal health programs, and it makes no provision for other financing sources. 

Perhaps somewhat in response to the Jayapal plan, on April 10, Sanders introduced S.1129, also called the Medicare for All Act of 2019, with more comprehensive benefits than were provided for in his 2017 plan; no cost sharing, except for prescription drugs and biologics (capped at $200 per year); and continuation of the ACA’s payment and healthcare delivery reforms. 

Public plan options

In February, Sen. Debbie Stabenow (D-Mich.) and Rep. Brian Higgins (D-N.Y.) reintroduced bills that would allow Americans to buy into Medicare at age 50. Enrollees would cover the premiums, and those with lower or moderate incomes would qualify for ACA subsidies. The Medicare buy-in option was supported by 77% of respondents in a January Kaiser Family Foundation poll, as well as by several 2020 Democratic hopefuls — many of whom have also expressed support for Medicare for All.a 

Introduced in the House on April 1 by Rep. Antonio Delgado (D-N.Y.) and in the Senate the following day by Sen. Michael Bennet (D-Colo.), Medicare-X Choice makes Medicare an option for nonelderly individuals through the ACA health insurance marketplace. The plan features a staggered rollout, and it increases Medicare payment by 25% in rural areas. Similar to Medicare-X Choice is the Keeping Health Insurance Affordable Act of 2019, introduced in the Senate by Sen. Benjamin Cardin (D-Md.) on Jan. 3.

Realistic near-term options

Clearly, with the Democratic majority in the House, repeal and replacement of the ACA is no longer a possibility. Nevertheless, the Trump administration has continued to “revise” the ACA. For example, it has promoted alternatives to the health insurance marketplace health plans (e.g., association health plans, short-term, limited duration health insurance), has allowed states to impose Medicaid work requirements and has modified the largest federal accountable care organization (ACO) program, requiring participating ACOs to take on downside risk sooner. 

However, in March, the Trump administration shifted course, taking a more aggressive stance vis-à-vis the ACA. On March 25, the Department of Justice said it supported a federal judge’s ruling that the entire ACA should be invalidated. The following day, the President declared, “The Republican Party will soon be known as the party of health care.”b He then asked some Republican senators to develop an ACA replacement plan. However, after an aggressive lobbying effort by Senate Republicans, who stressed the impossibility of getting a bill passed with a Democratic majority in the House and warned of the risks of emphasizing healthcare in the 2020 election, the President backtracked, announcing on April 1 that Republicans won’t vote on an ACA replacement plan until after 2020. 

As for the Democrats’ stance, at the AHIP National Health Policy Conference in March, Rep. Pallone said bluntly that the Democratic House leadership’s goal for the next two years is to preserve the ACA and block the Trump administration’s efforts to dismantle it. 

Current outlook

Varied visions for how the U.S. healthcare system should be organized and funded are being presented to the American people. There is no question that Medicare for All and the public plan options have captured the imagination of much of the public and will continue to receive considerable media coverage as the race for the presidency progresses. Hopefully, more light will be shed on the details of the various plans, with serious discussion about their costs and benefits, as well as potential unintended consequences.

In the final analysis, given the political realities of a divided government, the forecast through 2020 calls for a continuation of the tug-of-war over the ACA in Washington, with no major health policy changes. 

footnotes

a. Kirzinger, A., Munana, C. and Brodie, M., “KFF Health Tracking Poll – January 2019: The public on next steps for the ACA and prospects to expand coverage,” Jan. 23, 2019.

b. Vazquez, M., “Trump says GOP will be the party of health care but provides no plan,” CNN, March 26, 2019.

About the Authors

Ken Perez

is vice president of healthcare policy, Omnicell, Inc., Mountain View, Calif., and a member of HFMA’s Northern California Chapter.

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