Today’s Perspective from DMSG’s Washington Analyst, Mara Baer
May 2, 2017
NOTE: This discussion was originally conducted in an interview with Mara by Imagine Health at www.imaginehealth.com and published on their web site today. Imagine Health’s mission is to help employers forge relationships with health systems. In the interview below, Mara shares her latest perspectives on the current climate in DC.
1. So, it’s been a quiet start to the year on the healthcare reform front, right? What’s your take on all the recent activity, or lack thereof?
Oh yes, it’s been so quiet that I’ve been taking a nap since January. No but really, after having spent fourteen years in D.C. one thing I can say for certain is the District is anything but quiet. The health debate since the election came fast and furious. It started with the President signing an Executive Order directing federal agencies to take action to minimize the economic burden of the Affordable Care Act (ACA). Then Congressional leaders tried to advance a repeal bill (the American health Care Act or AHCA), but politics within the Republican party prevented a vote from ever reaching the House floor. Moderate and conservative Republicans are far apart in their thinking about health care. This is where progress on the bill broke down.
The House did advance a few health-related measures since the repeal bill died including passage of the Small Business Health Fairness Act (H.R. 1101), allowing small employers to band together to buy health coverage through certified associations. A stop-loss bill has also passed the House and workplace wellness-incentive legislation is moving through that body. These bills still have big hurdles to overcome in the Senate so don’t expect them to become law any time soon.
2. With uncertainty at the state level around Medicaid and the ACA’s exchanges, what should multi-state employers be monitoring at both the state and federal level as it relates to their benefit strategies?
It is definitely challenging for employers trying to plan for the future while there is little certainty on the health policy front. I think it is important to remember that states have traditionally been the primary regulators of insurance and despite a new federal oversight role Republican leaders would like to shift greater authority back to the states. So it is important for employers to monitor, evaluate, and advocate for their health care priorities at the state level. The employer voice often gets lost among the strong health care stakeholder voices in the states and it is important to change this dynamic so purchasers are driving the conversation in state legislatures.
Beyond state activity, many national associations representing large employers are laser-focused on ACA’s taxes, the employer mandate, and preserving the ERISA pre-emption. Some believe that expanded state waiver flexibility would not be good for ERISA plans. Also, while the AHCA did not touch the employer tax exclusion for health benefits it is important to keep an eye on this as the health reform debate continues and tax reform unfolds. We’ll cover more of what to watch for federally in Question 4 below.
3. Are ACOs going to make it?
I don’t have a crystal ball (wouldn’t that be nice) but I would have to say some form of the ACO model will likely make it, although perhaps not exactly as what we are experiencing today. We know public and private purchasers want to buy health care in new ways and that demand is increasing. The ACA made significant investments in new models like ACOs and there are about 850 of them in place today. Almost half of these ACOs are in Medicare and it remains to be seen how the current Administration and Congress will act on these initiatives. There is broad bipartisan support for new models of care but there is also a trade off Republicans will be looking to make that may lead us to strict cost-cutting measures. Again, that crystal ball would be helpful.
While I do think ACOs will make it in some form, shifting from the entrenched and fragmented fee-for-service system is slow and not producing results as quickly as purchasers would hope. I think the future lies in primary care physicians driving ACO models rather than hospital-driven approaches which is really the tail wagging the dog. We need better investments in models that have primary care at the forefront. We also need technology to advance more quickly so ACOs and others can innovate in a truly interoperable environment. These are all big challenges.
4. What should employers, both small and large, be on the lookout for from a legislative perspective in the coming months and years?
What to expect in the coming years, now that is a tough question. Given politics drive the agenda in Washington what happens down the road will be dependent on the make up of the House and Senate. Once the 2018 mid-term elections happen we’ll have a better sense of what is possible on the legislative front. If Democrats win back one of the two chambers it is a whole different ball game. At that point there would be more potential for consensus-driven policy but this last election cycle was so divisive Democrats may not want to give the President any wins. If health care market trends are very bad, Congress will feel pressure to address the problems or lose their seats and go home.
In the short term, House members will attempt to push through an updated version of the AHCA including an amendment which is meant to address some of the concerns conservatives had with the last version of the bill. The new version allows states to decide if they want to waive some of the ACA’s rules. This is meant to help reduce coverage costs but there are concerns that sicker individuals will essentially be priced out of coverage and lose consumer protections. The AHCA repeals a host of ACA provisions but even if it passes the House it has an uphill battle in the Senate where procedural rules will create roadblocks. Other items on the horizon include a package of “extender” bills for Medicare, the Children’s Health Insurance Program (CHIP), plus prescription drug and medical device user fee reauthorizations.
5. What’s next, and who is driving it?
State deadlines for insurers to file their rates are around the corner and what insurance commissioners do will be important. This is where the rubber hits the road and where we will really see how all this uncertainty plays out across the country. Some have already pushed back their deadlines to June, while others are keeping them in May. A big question is, for those insurers that remain in their markets, what rate increases will states approve? If the majority of markets wind up with no insurers, there will be immense pressure on the Administration and Congress to step in and resolve it.
On the Congressional front, now that a spending bill to fund the government is approved eyes turn to a possible ACA repeal bill vote in the House. Leaders are counting votes now and it is very close. If the House gets the bill passed, the Senate will modify that version to appease moderates and address the procedural rules I mentioned earlier. If they pass it the two Chambers go to conference committee for closed-door negotiations. If they get this far the deal is likely done and the President will be signing a repeal bill.
And finally don’t count out what the Trump Administration may do if Congress can’t get a health care deal. It is important to keep in mind that the Administration can make a lot of changes to the ACA through regulation and guidance without Congress. The Obama Administration used its authority broadly and we should expect the same from the Trump team.
Like I said earlier, it is generally not quiet in Washington and if it is, watch out because it is likely just the calm before the storm.
For more information about Mara’s interview with Imagine Health, go to: