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TrumpCare Dead? What’s Next?

TrumpCare Dead? What’s Next?

With the announcement that two more GOP senators are opposed to the latest draft of the Obamacare repeal and replace bill, Senate Majority Leader Mitch McConnell declared defeat. It appears, at least for now, that efforts to repeal Obamacare are extremely unlikely (we don’t see the President’s lunch with Senators today changing enough minds).

Admittedly, the impasse resulted from an inability for McConnell to thread the needle between moderates who felt the bill dismantled too much and conservatives who felt too much stayed in place. But, we truly believe the repeal effort has failed because what both the House and Senate Republicans proposed was too radical and bad for America.

The fact that 50 percent of Americans now support Obamacare over the congressional GOP alternatives is telling. Despite what insular Washington may think, Americans throughout our history have proven themselves very smart. While presidents, senators and congressmen tend to gravitate to the wings of the political spectrum, the populous tends to be more practical and moderate. On healthcare, Americans understand that changes are needed but not at the expense of destroying some of the progress that has been made. In fact, 72 percent of Americans want the GOP to reach out and discuss changes with Democrats

By and large, Democrats in Congress are dominated by an extreme liberal wing of their party and will not engage on even reasonable changes to the current flawed system. They fail to understand that unfettered entitlements not only don’t work, but will cripple U.S. competitiveness in the future. At the same time, a majority of Republicans in Congress with an equally conservative philosophical bent, refuse to embrace a rational approach to healthcare access in America. Their “pull yourself up by your own bootstraps” mantra proves popular until the skinny on actual details becomes known. That leaves a minority of more centrist Democrats and Republicans with little power to effect change.

We have taken the position throughout this great debate that the Obamacare Exchanges are at best ill and at worst destined for collapse. The truth is likely somewhere in the middle. Some studies seem to indicate that health insurers are weathering the storm, with improved medical loss ratios and margins. Despite the view that there is no rate death spiral, evidence suggests that the construct has led to erosion in access to viable plan choices in up to half of states. Across America, major annual premium increases have zapped affordability for many Americans without consistent access to employer coverage. While those who receive premium and cost-sharing subsidies from the federal government are somewhat insulated, the reality is that the price tag for America as a whole will become unaffordable.

We have been very sympathetic to the Medicaid expansion arguing that, with some reasonable long-term reforms, this system promises to be the most stable and cost-effective approach to ensuring access and meeting healthcare challenges in the future. We, too, note the wisdom of America here: a majority of Americans, including those registered as Republicans, oppose cutting Medicaid as proposed by Republicans.

Where do we go from here?

McConnell has now embraced President Trump’s call for a full repeal with a replace (maybe) later. For a variety of reasons, we do not see this as viable.

Politically, the votes in the Senate are not there. Some argue that, if successful, it might bring Democrats scurrying to the table to negotiate. At the same time, it could inextricably link Republicans now to the Obamacare chaos and pass blame to them (you’re “it”!). In the end, though, it would be incredibly irresponsible to repeal without replacing. It would cast an even greater shadow over the Exchange market’s stability, leading to further plan pullouts and rate hikes. And at least six states (e.g., Arkansas, Arizona, Illinois, Indiana, Michigan, New Hampshire, New Mexico, and Washington) have a so-called “trigger law” to immediately shut down their Medicaid expansion if federal legislation to repeal or slash Medicaid expansion reimbursement is passed. The Congressional Budget Office just estimated that 17 million would lose coverage next year and 32 million by 2026 if a clean repeal were passed.

Efforts should be made to stabilize the system as the political and philosophical gridlock hopefully is slowly broken. Stabilization begins with the White House, which must continue funding the cost-sharing reduction subsidies as some sort of consensus is built. Trump, too, could use some regulatory authority to reduce some mandates and inflexibility, all the while without undermining the ability for those with pre-existing conditions to access affordable coverage.

On the legislative front, the following should be looked at temporarily:

  • Fund the cost-sharing subsidies to bring certainty to them.
  • Of the so-called “3 Rs” in the Exchanges – risk adjustment, reinsurance and risk corridors – only risk adjustment remains currently. Bring back re-insurance in some form to help protect insurers from huge claims and perhaps stabilize premiums a bit. We would suggest bringing back the risk corridors, but that could get messy given lawsuits over the previous underfunding when the program began.
  • If a rational approach to reform is not in the making for now, why not try something akin to what Republican Sens. Lindsay Graham and Bill Cassidy have proposed: block grant funding to the states to solve issues at least temporarily. This proposal has its merit as a short-term stop gap reform. Each state could fashion its own approach to affordable healthcare with some of the following:
    • States that like the Exchange mechanism can help sustain it while others could fashion alternatives. Perhaps, too, those states that want to stay in the federal and state Exchanges could elect to keep the federal marketplace and tax subsidy structure in place for their citizens in lieu of state grants.
    • States can provide tax credits for coverage.
    • While we are not fans of high-risk pools, states can provide additional subsidies to ensure premiums are affordable for those with pre-existing conditions.
    • Using the block grants in concert with Medicaid dollars and other state resources to create a stable insurance pool for historically uninsured.

It just might bridge the political divide. Conservative Republicans might still be antsy about the scope of this “new entitlement,” but things done at the state level often appear more palatable to them. If Medicaid funding is preserved for now and they see additional dollars subsidizing access, moderate Republicans might be happy, too. As for Democrats, some more moderate ones might just come around too, especially those in states where Exchanges look vulnerable.

As we look down the road, if no other consensus can be attained, we might like this approach as a permanent solution for a number of reasons.

  • Debate over a new national entitlement goes away.
  • The so-called Obamacare dollars could very well be folded, over time, into a Medicaid remake of sorts and help, in part, to provide the necessary funding for states to build access and respond to our looming healthcare challenges.

The details that often lead to a stalemate would need to be worked out. But Graham and Cassidy may be on to something – politically and policy-wise.

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, Commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel.

Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management, and administration.

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