News Update for March 16, 2017
Speaker Paul Ryan Changes Tune, Says AHCA Must Change In Order to Pass House
In a private meeting on Wednesday, Speaker of the House Paul Ryan told House Republicans the American Health Care Act would have to be modified if Republicans wanted to pass it through the House. The bill had initially been crafted by Republican leadership in the House with little input from rank-and-file Republicans. However, resistance from within Ryan’s own party, coupled with an unfavorable Congressional Budget Office report, made Ryan walk back “from his earlier position that the carefully crafted legislation would fail if substantially altered.” Ryan hasn’t given any details on what changes are currently under consideration. “Now that we have our [CBO] score we can make some necessary improvements and refinements to the bill,” said Ryan.
Republicans Debate Adding and Subtracting Different Provisions from Obamacare Repeal
Some Republican leaders are thinking about getting rid of a provision in the American Health Care Act. As a way of replacing the individual mandate, which requires that eligible Americans sign up for health insurance, the AHCA would institute a provision that would require insurance companies “to charge a 30 percent penalty to customers who go without coverage for at least 63 days.” Like the individual mandate, this 30 percent penalty is also an incentive to encourage young, healthy consumers to buy insurance so that insurance pools will have the finances to cover people with pre-existing conditions. Many conservatives are not onboard with the 30 percent penalty, believing that it is another form of the individual mandate. Senator Ted Cruz (R-TX) called for something that would “scrap the requirement to cover pre-existing conditions along with other [insurance company] regulations.” Cruz believes these regulations to be the “principal driver of skyrocketing premiums.”
Conservative House Republicans are also proposing an amendment to the AHCA that “would institute work or education requirements for Medicaid.” The hope is that this Medicaid work requirement would be enough to persuade conservatives to vote yes on the bill. Some critics believe that work requirements could block Medicaid beneficiaries who aren’t currently working from getting needed medical care. Going without this medical care, say these critics, would in turn prevent the beneficiaries from rejoining the workforce.
American Health Care Act Supporters Stress ‘Three Phases’ Approach, But Critics Are Skeptical
On Wednesday, President Donald Trump told a rally in Tennessee that he was in the midst of negotiations on the American Health Care Act. “We’re going to arbitrate, we’re going to all get together. We’re going to get something done,” said Trump. He reiterated that “the end result … is going to be great” once people consider the fact that the AHCA is only the first phase of the Republican plan to repeal Obamacare. The other two phases include regulatory actions taken by Secretary of Health and Human Services Tom Price and more bills passed by Congress that would undo the core tenets of Obamacare.
However, many GOP leaders and other detractors remain critical. “There is no three-phase process,” said Senator Tom Cotton (R-AK). “There is no three-step plan. That is just political talk, it’s just politicians engaging in spin.” Cotton believes that the third phase of repeal is unrealistic because it would require 60 votes to pass the Senate, meaning 8 Democrats would need to defect. Senator Lindsey Graham (R-SC) also said that passing a second bill was a “fantasy.” Senator Ted Cruz (R-TX) believes that “anything in so-called bucket three will never pass.” Democrats, for their part, are even more critical. Senate Minority Leader Charles Schumer said, “We think this bill is so bad there’s no way to make it better.”
First Decline in Total Obamacare Enrollment Numbers Reported
According to a new report by the Trump administration released on Wednesday, a total of 12.2 million Americans enrolled in the Obamacare marketplaces during the 2017 open enrollment period. This is the first annual period in which enrollment dropped. In 2016, 12.7 million Americans enrolled. The exchanges saw “slow but steady increases in 2015 and 2016.”
News Update for March 15, 2017
New KFF Poll: People Expect Obamacare Repeal to Result in Higher Costs and Less Coverage
A new poll published Wednesday by the Kaiser Family Foundation shows that the public expects that the Obamacare replacement plan to increase costs and decrease coverage. 48 percent of respondents believe that the proposal would decrease the number of people who have health insurance. About 30 percent say that the number would stay the same, and 18 percent believe the number would increase. A plurality of people believe that costs would increase for deductibles and for people who buy their own insurance. Results were mixed based on party-affiliation: “Majorities of Democrats believe the plan will decrease the number of people with insurance and increase costs, [while] Republicans’ views are more mixed.” You can read more about the poll here.
Is Obamacare Repeal Putting Republicans at Risk in 2018?
The contentiousness of the GOP’s Obamacare repeal process has been well-documented, and “Republicans concede they’re growing increasingly concerned about falling into familiar traps.” Some are theorizing that the GOP’s inability to satisfy the American public’s desire for healthcare reform might prove to be the party’s undoing in the 2018 midterm elections. Former Republican House Speaker Newt Gingrich said, “By next spring, they have to have a health solution clear enough — and implemented enough — that people feel comfortable” or else the midterms could go very poorly for them.
Three Strange Effects of the America Health Care Act on the Individual Marketplace
LifeHealthPro just published an article yesterday detailing some strange things that might happen if the American Health Care Act passes.
- The rules that force “individual or small-group major medical” insurance plans to maintain coverage for around 60 percent of the predicted value of essential health benefits would be taken away. However, the AHCA would still keep Obamacare’s cap on how much a plan can expect an enrollee to pay out of pocket each year. The CBO predicts “that the typical consumer in the individual market would get a mid-level silver plan in 2026 if current ACA rules continue.”
- With the AHCA, the removal of the 60 percent rule, combined with the enforcement of the out-of-pocket cap, would result in “the same consumer [ending] up with a plan that was more like a bronze plan than a silver plan,” meaning that average consumers would have less valuable plans.
- Because the AHCA is actually a budget resolution bill, it will only require 50 votes to pass. However, the bill can’t actually repeal core elements of the Obamacare law. Another bill would have to handle that, and that bill would require 60 votes, which means that 8 Democrats would have to defect. This is highly unlikely. As a result, we could live in a world in which an “Obamacare repeal bill” is passed, yet major Obamacare provisions would still be in place.
- The percentage of a plan’s predicted value, or actuarial value, of its essential health benefits coverage dictates its placement on Obamacare’s metal tier system. The system goes from bronze to gold to silver to platinum and represents plans that cover between 60 percent and 90 percent of the cost of essential health benefits coverage. Confusing? That’s partially why the metal tier system was implemented.
- The AHCA would eliminate this system, which is used as a sort of standard to help consumers compare plans. This could make it a bit harder for people to compare health plans.
Drug Prices Are Too High, Say Novo Nordisk CEO & Many Others
A Kaiser Health News study shows that “with new cancer drugs commonly priced at $100,000 a year or more … hundreds of thousands of cancer patients are delaying care, cutting their pills in half or skipping drug treatment entirely.” Dr. Hagop Kantarjian, a leukemia specialist, believes that high drug costs are “causing more death than necessary.” New medications and their “jaw-dropping costs” have led to much criticism of the pharmaceutical industry.
One such critic comes from within the industry itself. In an interview on Tuesday, Novo Nordisk A/S CEO Lars Fruergaard Jorgensen said, “It was never the intention that individual patients should end up paying the list price. I have a big problem with that.”
News Update for March 14, 2017
CBO Says AHCA Would Result in Millions More Uninsured, Reduction of Budget Deficit
The Congressional Budget Office, a non-partisan Congressional agency, released its analysis of the American Health Care Act on Monday. The analysis projects that, compared to the Affordable Care Act, 24 million more Americans would be uninsured in a decade under the AHCA. However, the bill would also lower the deficit by $337 billion thanks to decreased government spending. Representing the Trump administration, Secretary of Health and Human Services Tom Price said, “We disagree strenuously with the report that was put out. It’s just not believable is what we would suggest.” Price said that the CBO’s job was “virtually impossible,” and that the figures should be taken with skepticism. The White House’s own Office of Management and Budget, however, forecasted an even grimmer prediction: 26 million more Americans would lose coverage in the next decade. However, White House Communications Director Michael Dubke stressed that this figure was designed as a prediction of what the CBO’s prediction would be. Dubke stated that the 26 million figure was not to be taken as “an analysis of the bill in any way whatsoever. This is OMB trying to project what CBO’s score will be using CBO’s methodology.”
Senate Republicans Uneasy Over New CBO Figures on AHCA, Obamacare Supporters Emboldened
The 24 million more uninsured figure released by the CBO is not sitting well with many Republicans in the Senate. “Can’t sugarcoat it. Doesn’t look good,” said Republican Senator Bill Cassidy of Louisiana. “The CBO score was, shall we say, an eye-popper.” The CBO numbers don’t bode well for garnering centrist and conservative Republican votes behind the bill. However, some Republicans are taking the White House’s line of discounting the CBO score. Representative Greg Walden (R-OR) said that the CBO hasn’t evaluated the GOP’s “entire proposal to repeal and replace Obamacare, and today’s score reflects only a portion of the actions we will take to roll back red tape, free markets and empower consumers.”
Some of the Senate’s more conservative members will visit the White House on Tuesday. Senator James Lankford (R-OK) said that he and his fellow Republican Steering Committee members “will offer ways to ‘strengthen’ the bill and make it ‘actually viable.’”
Because of the CBO score, which reduces the amount of insured Americans while lowering the deficit, the AHCA is being accused of “throwing 24 million people off their health care to give billionaires a tax break,” according to prominent Democratic Senator Elizabeth Warren of Massachusetts.
Major Insurance Company Comes Out in Support of AHCA
Anthem, the country’s second biggest health insurance company, has endorsed major parts of the American Health Care Act. This is notable not only for Anthem’s stature, but because major insurance company groups had expressed concerns about the American Health Care Act earlier this week. In a letter from Anthem CEO Joseph Swedish to two House committees, Swedish wrote that the bill “addresses the challenges immediately facing the individual market and will ensure more affordable health plan choices for consumers in the short term.” Anthem expressed further support for provisions in the proposal that “would repeal Obamacare’s health insurance tax, temporarily continue the law’s cost-sharing subsidies, and allow customers to receive tax credits off the Obamacare exchanges.” Swedish wrote, “These provisions are essential and must be finalized quickly to have the intended impact on products and prices to benefit customers.” Anthem is still looking for the federal government’s approval to acquire Cigna, another major insurance company. Anthem is currently the largest insurance company participating in the Obamacare exchanges.
Companies That Manage HSAs Could See Big Earnings Under GOP Proposals
Health savings accounts have been a popular Republican talking point for some time now. They were introduced in 2003 and have seen consistent championing by the GOP since that time. The American Health Care Act “reflects the [GOP’s] broad consensus for giving more Americans access to HSAs, which allow people to put aside money tax-free for medical expenses.” If the GOP is successful, it could mean “millions more customers” and earnings from account management fees for companies that manage HSAs. Read more about HSAs and how quickly they’ve grown in the last decade.