The withdrawal of the American Health Care Act (AHCA) in March provided plenty of insight into how difficult it’s going to be to pass significant health care reform. Several key issues led to a lack of support from both Republicans and Democrats, and any future attempts at reform will inevitably have to address these issues. So although the AHCA didn’t result in changes to the health care system, understanding the reasons why it failed are critical to understanding what comes next.
- Exchanges are still key: The exchanges – the marketplaces where people without employer or government coverage buy health insurance – only cover about 12 million Americans, but they continue to dominate the debate. For comparison, about 160 million Americans get health insurance through their jobs. Any successful reform will have to address the complex issue of how to make sure people on the exchanges can get quality, affordable health coverage while still making sure insurance companies have enough incentives to offer that coverage.
- Potential cuts to Medicaid funding: The ACA expanded Medicaid coverage for low-income adults across the U.S., which 31 states and the District of Columbia adopted. Through block grants and per capita caps (see our April article, “Understanding Health Care Terminology,” for more details), the AHCA would have reduced federal funding for Medicaid. This put Republicans from states that expanded Medicaid in a difficult position – should they vote along party lines or vote to reduce health coverage for people in their state? Ultimately, this issue caused many Republicans to withhold their support for the AHCA.
- What benefits are “essential”: The ACA names 10 essential health benefits that every marketplace plan must cover. These include emergency services, prescription drugs, pregnancy, mental health and addiction services and wellness services, among others. Conservative Republicans wanted the AHCA to remove or change these mandatory benefits, while moderates were in favor of keeping them intact. Whether these benefits stay or go could become a big part of getting enough support to pass the next attempt at reform.
Efforts to Undermine the ACA Continue
Even though the ACA continues to be federal law, it’s being weakened in a number of ways that could lead to problems for the health care system.
- Lawsuit over cost-sharing reductions. There’s an ongoing lawsuit over the legality of the ACA’s cost-sharing reductions that dates back to 2014. These subsidies help insurance companies keep costs low for consumers, and the uncertainty over whether they’ll be funded is part of the reason insurers are leaving the exchanges. Funding them would make the marketplaces more stable and keep premiums lower for customers. The question is whether that’s something the Republicans want to do; they have until May 22 to decide whether to continue with the lawsuit or drop it.
- Delays by executive order. President Trump’s February executive order allowed agencies to ignore or delay implementing parts of the ACA and caused two significant developments:
- The IRS said they won’t reject tax returns without ACA coverage information. The ACA’s individual mandate ensures that healthy people get health coverage too, which helps lower risk for insurance companies. Taking the teeth out of the individual mandate could cause fewer people to sign up and lead insurance companies to raise premiums for those who remain.
- Health and Human Services (HHS) Secretary Tom Price stalled the rollout of Medicare reform payment programs that are mandatory under the ACA. This is just one example of how the administration can choose to interpret the ACA and determine which programs to emphasize and fund.
- Issuing rules to amend ACA policies. The April final rule on market stabilization issued by the Department of HHS is another example of how it’s possible to affect the health care system without enacting laws. This rule shortens the ACA’s enrollment periods, changes requirements for allowing special enrollment and allows insurance companies to adjust the actuarial value (the percent of costs covered by the plan versus enrollees) of certain plans.
The HHS web page “Providing Relief Right Now for Patients” is a good resource to track other administrative and funding decisions being made about the ACA.
Key Dates to Know and What to Watch For
After the May 22 lawsuit deadline mentioned above, the next big date to watch is June 21. This is the first deadline for insurance companies to decide whether to offer coverage through the exchanges in 2018. Some companies have already announced they’ll be leaving the exchanges or raising premiums. Fewer choices and higher rates could leave consumers unable to afford quality coverage.
Another issue to watch is the continued rise of prescription drug prices. For example, the prices for some brand-name diabetes medications have gone up more than 150 percent in the last six years. With bipartisan support in Congress for lowering drug prices, this is one of the more likely areas for reform. This would be welcome news for LIUNA health and welfare funds and people with all types of health coverage, including current and retired LIUNA members.
Health care reform is a complex issue affecting millions of Americans, and any successful reform is going to take time. The LHSFNA will continue to cover health care news in future issues of Lifelines and in our bi-weekly Health Care and Insurance News Bulletin. Email lifelines@lhsfna.org to sign up for this bulletin or visit our Health Care Reform page for more information.
[Nick Fox]
