Repealing and Replacing the ACA: A Whole New Ball Game. Same Problems Though.

I’ll dive right in, with the stipulation that this blog is initial reaction in a very fluid, unprecedented and soon-to-be even-more-intense political environment.  Fasten your seat belts!      

The ACA.   Replace is the critical word in “repeal and replace.”  Consensus is already emerging that Trump and the Republicans will indeed repeal the ACA in early 2017, via the reconciliation process Congress used earlier this year.  That resulted in the Senate’s first an only full ACA repeal vote.  Obama vetoed the bill, of course.   But Republicans demonstrated the do-ability of the reconciliation process.   Lacking 60 votes in the Senate, they’ll very likely try repeal again that way.

But, consensus is also emerging that what they’ll replace the ACA with will retain a sizable portion of what’s in the ACA now.   It’s too early to predict how that will flow, and what will end up on the chopping block, be amended, be adapted, be replaced with probably only slightly different mechanisms. 

You can safely bet that the Medicare Independent Payment Advisory Board will not survive.  Nor the Cadillac tax.  But I wouldn’t bet against the individual mandate quite yet.    

So, in effect, this will be part optics and part substance.  Remember, Republican opposition to the ACA is 80% based on the fact that Obama and the Dems passed it with NO Republican support.   So the optics issue is that Republicans MUST make good on the repeal pledge after all these years and the loud rhetoric.  And so now, for the same reason, must Trump seek repeal, though I think we would all agree he knew nothing of the substance of the law.   

BUT, when you drill down with Republican lawmakers – or survey the public – there is broad support for most of the major core elements of the law.  You all know what those are—and they include a push to value-based purchasing and quality/safety improvement as well as expanded access to health insurance which does not permit medical underwriting.  They even include the principle of universal coverage.

The substance part is that Republicans want to accomplish the aims of expanded coverage, better quality and lower cost primarily through marketplace forces, and not government regulation. 

The balance between marketplace forces and regulation is a perennial struggle in almost all aspects of public policy, not just health care. So, now we enter a new phase of that struggle.   At the end of the day, both are necessary.  And smart Republicans know that.  The challenge and debate takes place in creating law that uses both in a way that’s maximally complementary and does the most good with no harm. 

The ACA is an experiment using both.  Emphatically, it is not “government-controlled health care.” Republicans, now it’s your turn to achieve a balance.  No regulation is not an option.  Good luck.  Call the law whatever you want—anyone for Trumpcare?   

The House health policy plan – “A Better Way” – put forward by Paul Ryan in June is the most detailed document to date spelling out where Republicans might go in replacing the ACA.  It’s now required reading.  THCBers, have at it, pro and con.   

(2) MACRA.   MACRA was passed last year with overwhelming bipartisan support in both chambers, and the AMA and other major medical groups support the final rules released last month.  It’s highly unlikely to be opened up for fundamental change. 

That said, a new HHS Secretary and CMS chief will take a close look.  It’s impossible to predict the outcome of that. 

Bear in mind that changing final rules and disrupting a complex payment process for physicians that will get underway in 2017 would not be easy.  But Andy Slavitt and his team intentionally crafted rules that state changes may well be needed as the law is implemented.  Moreover, he set up a process at CMS to track the law’s impact.   

I’m inclined to believe that Trump appointees will support MACRA and let the implementation process begin without changes.   

(3) FDA reform, biomedical research, cancer moonshot, and drug prices.   The House 21st Century Cures bill (passed in July 2015) and companion Senate legislation (approved by the HELP committee this past spring but not yet the full Senate) make substantive changes to FDA’s drug and device approval process.   They seek to accelerate approvals.  The House bill contains additional funding for medical research via NIH; it also increases FDA funding.   

Republicans have led the charge to pass this legislation, with support from the pharmaceutical and medical device industries and hundreds of patient support groups.  Democrats support additional NIH and FDA funding but have been skeptical of some provisions in both bills.  Even so, they have indicated a willingness to negotiate.   As has the White House, which has tacitly acceded to having its cancer moonshot and precision medicine initiatives be part of those negotiations.   

Mitch McConnell (R-KY) said Nov. 9 that the FDA reform legislation is a priority for passage in the lame duck session of Congress.   But it’s unclear if Democrats will go along.  Three separate consumer coalitions sent letters to Democratic leadership in recent days proposing that consideration of the legislation be pushed to 2017 and a new Congress.   

The groups say the legislation needs substantial changes lest drugs and devices be approved without full evaluation of their effectiveness and safety.   In addition, two of the groups argue that the legislation should only be considered if Congress at the same time takes up the issue of excessively high and rising drug prices.   

The political calculus on this one is unclear at this point.   The Obama administration could agree to support lame duck passage of the legislation, with changes, and if it includes cancer moonshot and precision medicine funding (in total more than $2 billion).   

For their part, Republicans could be wary of waiting until 2017 because they have no idea where Trump will fall on FDA reform, NIH and FDA funding, cancer moonshot, or precision medicine.   

At the same time, the consumer coalitions may now have common cause with Trump on this issue, since Trump was quite outspoken during the campaign about tackling drug prices.   

(4) The opioid epidemic.  Obama signed the Comprehensive Addiction and Recovery Act, or CARA, into law in July.  The law aims to address the vast under-treatment of opioid addiction, a problem everyone agrees is tearing lives, families and communities apart across the country (nearly 80 deaths per day).  An estimated 10% of addicts get proper care today.   

(On the same day that Congress passed CARA, 46 state governors signed the Compact to Fight Opioid Addiction, pledging to reinforce their efforts to fight the opioid epidemic and supplement federal funds.) 

Congress passed CARA with a 92–2 bipartisan vote in the Senate.  But it has yet to provide funding to implement the core measures of the law.   That bogged down in partisan budget debates when contentious Zika virus funding took priority over the summer.

To date, Congress has authorized $181 million for CARA and expanded opioid treatment.  The administration asked for $1.1 billion and CARA was written with that allotment in mind.  (The money goes to states and communities to expand treatment.)   

The Obama Administration wants to obtain the additional funding in the lame duck session when Congress must pass budget bills.  Above all else going on, this should absolutely be a priority. 

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

6 replies »

  1. Interesting that the narrative now being shaped by the MSM is ‘walkback in progress’. Only a wlkback to those not listening.. preexisting conditions, universal health care -> all mentioned on campaign trail. A walk back would be if he suddenly supported the individual mandate.. also mentioned in addition to repeal and replace -> transitioning slowly to make sure millions won’t suddenly lose their health insurance. Sounds like a responsible discussion so far, right Steve? It’s still early but can we at least say the rhetoric from many analyst class corners that trump would mean millions suddenly without insurance was irresponsible fear mongering?

  2. Sorry, Dr. Palmer but I don’t really know what you’re talking about in these 2 comments. To my knowledge, no one is discussing anything along these lines. You are either way ahead of me (and others) here – pondering really innovative payment schemes – or you are proposing things that have no chance of ever happening no matter who is in the White House or which party controls Congress. I just don’t know. I invite you to explain the concept in simpler terms and address whether this is just pie-in-the-sky web chatter or something that is being suggested or tried somewhere. Thanks.

  3. The money to the providers has to come through the patients. Having indemnity insurers send claims cash to the patients is not a terrible idea, but I don’t think it would be accepted because the cash would often be mis-handled by the patients and it would be a clerical hassle for them. But a voucher credit card might work easily and would allow the patient to pay fully or partially depending upon his/her satisfaction with the service.

    We have to be able to be altruistic and to subsidize care for the needy but one cannot just give cash to the poor–as it is too fungible–and you cannot just bypass the patient and send money to the provider, because he then charges a fortune, thinking that god or santa is paying for health care. This is the present canonical problem in health care the world around.

    We have to make the provider think that he is getting his dough from the patient and that he will not be paid fully if his service was not excellent. We also have to make him want to lower his charges to get more market share and compete. A voucher or MediBuck system that restricts the subsidy for use for health care only–like food stamps but with some refundability if you don’t use them or if you die–would be equivalent to cash…I think.

    We must put some machinery into our health care system that adds a vector to keep costs down. Only competition or monopsonic purchasing will do this and the latter has lethal problems akin to monopolies.

    The whole problem I think can be solved with ingenious financing.

  4. One thing to think about:

    I’m sure that docs would be willing to compete on a procedure basis (no one else is willing to compete at this time): exams, evaluations, small surgeries, prescriptive activities. It’s too bad that many docs can’t do this now because they are part of the hospitals’ corporate practice.

    I think the key to bringing down prices is the use of vouchers or MediBucks. This allows us to use shopping to bring prices down and also combines our ability to be altruistic to the poor. If unused vouchers are refundable in some way the patients will treat them as cash. Even if patients are not actually smart shoppers, the providers will believe they are being shopped and will feel the competition.

  5. If preexisting conditions remain, they need to be phased in over a 3-5 year period to address adverse selection

  6. Addendum Nov 11. In an interview with the WSJ Trump reportedly said he would probably keep certain ACA provisions. So the walk-back begins…. In this case, he mentioned pre-existing condition underwriting and ability of parents to keep kids on their plans until age 26. “A Better Way” also keeps those provisions. My early prediction: 50% to 75% of what’s in the law survives, in terms of numbers of provisions. But if he guts the subsidies, that will of course be mortal wound to heart of the law.