Now What, Mr. President? Here’s What.

Now What, Mr. President? Here’s What.

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By STEVEN FINDLAY

In the wake of the AHCA’s demise, most lawmakers and policy experts agree that Congress will put repeal and replace aside for the rest of 2017.

As House Speaker Paul Ryan acknowledged on Friday that means the ACA/Obamacare remains the law for the “foreseeable future.”

Thus, as was widely reported over the weekend, that begs the question: how will the Trump administration administer the law and when might be the right time to return to the issue of fixing and improving it (however you want to label that.)

This is unknowable at the moment. The President, although inconsistent in his remarks, threatened to let the ACA “explode” this year and in 2018, thus forcing Democrats, in his mind, to beg him to fix it. At the same time, he said maybe the legislation’s demise was the “best thing” that could have happened since it would allow him to work with Democrats to craft an ACA replace or fix bill that would win their votes, bypassing the hard-right Freedom Caucus block in the House.

There are very tricky political waters here. For example, if Trump follows through on the work-with-Democrats strategy anytime soon and thereby alienates the 40-member strong Freedom Caucus, he could lose their votes on other priorities. There’s also no guarantee that, emboldened by AHCA’s defeat, Democrats would go along with him on anything but the fixes they to Obamacare they want.

Bear in mind that the mid-term elections are on Nov. 6, 2018. All 435 seats in the House and 34 of the 100 seats in the Senate will be contested. (That election is, of course, one reason Ryan told Trump they had to pull AHCA given that they didn’t have the votes in the House and Senate passage was in serious doubt.)

Will ACA repeal and replace, by Nov. 2018, be an issue Republicans want as a campaign issue, or not? Would it inure to their benefit to return to it in 2018 and do a smaller bore fix, with Democrats, they could then call a win? Or would it be better for them politically to continue to bash Obamacare, especially if premium hikes and insurer pull-outs continue?

Democrats almost certainly will be looking to batter Republicans with their repeal and replace failure, and on the merits of what they proposed in AHCA. So, again, they may have no motivation to do anything.

All that said and acknowledging the many uncertainties, I think Trump’s smartest play is to pivot back to the philosophical approach he campaigned on—access to coverage for all; lower premiums, deductibles, and copays; lower costs overall (drugs and other high-cost care); and improved care.

When the time is right—possibly this fall or early 2018—he should take this step, explicitly denouncing the AHCA framework including any major pull-back on Medicaid.

This approach would lay the foundation for working with Democrats—again, when the political timing is right—to make ACA repairs. At the same time, he should up the ante on health care prices and costs, proposing specific legislative steps to address unnecessary, wasteful care through payment and delivery system reform. (He might consider reading a couple of health care books over the next 6 months.)

In the meantime, Trump should take steps to stabilize and improve the exchange marketplaces while at the same time extending flexibility on health care to the states. Combined, this approach would curry favor with Democrats and mollify most Republicans. Specifically, he should:

(1) Direct White House lawyers to continue the Obama Administration’s legal fight to preserve the subsidies that help low-income exchange enrollees pay their deductibles and co-payments. House Republicans filed suit in 2014 alleging that these subsidies were not authorized in the ACA. The case is in the courts. Without the subsidies, used by some 70 percent of enrollees, insurers stand to lose money and, of course, millions of consumers will be financially stressed.

The Republicans won a preliminary victory on the issue in May 2016 when a federal judge agreed that the ACA had failed to properly set up funding for the program. The Obama Administration filed an appeal. Then in December, after Trump’s victory, the Republicans asked the 3-judge appeals court panel to hold off on the case, pending repeal and replace legislation. The panel agreed.

In January, the panel denied a request by two exchange enrollees to rule on the subsidies before the Trump administration weighed in. Trump’s lawyers now must decide what to do. If he declines to fight to preserve the subsidies, he will piss the Democrats off big time, not to mention millions of people.

(2) Direct HHS Sec. Tom Price and CMS administrator Seema Verma to reconsider several of the exchange market rules for 2018 that the administration proposed on Feb. 15, based on comments received. The deadline for comments was March 7.

Most notably, a proposed rule that imposes barriers to “special enrollment” (outside the annual fall open enrollment period) due to changes in life status such as divorce would very likely do more harm than good as drafted. Some restrictions are needed, but they need to be more targeted.
Other proposed rule changes threaten to reduce the value of the premium tax credits. Trump should ask CMS to weigh the comments carefully.

A proposed rule that allows insurers to collect premiums for prior unpaid coverage, before an enrollee can enroll in the next year’s plan with the same issuer, is likely to be finalized unchanged. The rule fairly incentivizes consumers to avoid coverage lapses.

(3) Direct Price and Verma to contact (a) insurers operating in the exchanges and major insurer groups, (b) leading physician and hospital interest groups, and (c) leading consumer groups to solicit their advice on further steps that could/should be taken in 2017 and 2018 to enhance enrollment of young, healthy people.

Related, direct Price, Verma and OMB director Mick Mulvaney to appeal to insurers to stay in the exchanges in 2018 while the administration promulgates new rules and sorts through its options. (Tell Steve Bannon to avoid all contact with any health care group.)

(4) Direct Price and Verma to evaluate current payment and delivery system reform initiatives being conducted at the CMS’s Center for Medicare and Medicaid Innovation (created by the ACA), with an eye towards terminating those programs that are not bearing fruit and enhancing those that are.

The ACA requires CMS to give priority to 20 models, including medical homes, all-payer payment reform, and initiatives that transition payment from fee-for-service reimbursement to global fees and salary-based payment. But the ACA permits CMS pretty broad leeway in gauging program priorities without the need for Congressional approval. That’s a change from the past that the Trump folks should embrace if they want to get their hands dirty in on-the-ground health reform.

(5) Direct Price and Verma to immediately assess their approach to section 1332 of the ACA. Section 1332 permits states to apply for “State Innovation Waivers to pursue innovative strategies for providing….affordable health insurance while retaining the basic protections of the ACA.”

Any programs under the waiver, per the law, have to meet certain specs, however. They must “provide access to quality health care that is at least as comprehensive and affordable as would be provided absent the waiver, provides coverage to a comparable number of residents of the state as would be provided coverage absent a waiver, and does not increase the federal deficit.”

The 1332 waiver program became operative on January 1, 2017. The Obama administration in 2016 signaled strict interpretation of 1332, which discouraged most states from applying. Many decided to wait for the election, too.

But 1332 permits flexibility and experimentation. Most notably, 1332 does not require major, large-scope proposals. They can be narrow bore. Alaska, California and Hawaii sought 1332 waivers in the months before the 2016 election. With the collapse of Republican repeal and replace, 1332 could become a much more important vehicle for reform in both red and blue states.

Related, Verma is widely expected to expand the long-existing waiver program that allows states to experiment with their Medicaid programs.

See this May 2016 Health Affairs post on the 1332 waiver program. http://healthaffairs.org/blog/2016/05/26/the-acas-section-1332-escape-hatch-or-straightjacket-for-reform/ And this one from Nov 2016. http://healthaffairs.org/blog/2016/11/02/state-interest-in-1332-waivers-gaining-steam/

One of the most consistent findings of public opinion polls over the past five years is that a substantial majority of the American people want: (a) the two parties to work together more on the nation’s major problems and be less overtly partisan and (b) something done about soaring health care prices and costs. It would seem a propitious time to honor that opinion.

Steven Findlay is an independent journalist, policy analyst, researcher and consumer advocate.

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7 Comments on "Now What, Mr. President? Here’s What."


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Steven Findlay
Mar 27, 2017

We’ll see. You may be right. I don’t think he has any choice on health care; has to now work with Dems to get something passed. Unless something big changes, which regains him lost political capital on this issue and others….amid continued probes on Russia ties etc. All up in the air. Hopefully a few months rest from the recent craziness will return everyone to some sanity. If he and Rs go into mid terms with no achievements, they’ll be in big bad spot.