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What a Healthcare Year It Has Been!

What A Healthcare Year It Has Been!

The year is just about over and activity was robust for healthcare in 2017. Here is a quick recap about what happened and what we think we might see in 2018. Happy New Year to all!

President Donald Trump was ushered into office with promises that he would create major change in how Washington operated. His picks for key healthcare positions were very different than the rather institutional appointees we saw under both Democratic and Republican administrations.

The Republicans failed on their promise to repeal and replace Obamacare in a series of notable defeats in the House and Senate. But the GOP did get some revenge late in the year by attaching the individual mandate repeal on the tax bill that passed. We think the Congressional Budget Office’s (CBO) estimate of the negative impact is very high. While there will be some impact on enrollment, the year-end numbers show that people who want insurance tend to enroll. The subsidy largely drives enrollment not the tax penalty. Suffice it to say that the Exchanges will remain a volatile place in about half the states. With the now one-vote margin in the Senate, we don’t see a repeal and replace bill passing in 2018. Also, we are dubious that Senate Majority Leader Mitch McConnell’s promise to Sen. Susan Collins, R-ME, to fight for passage of a stabilization measure will happen. The House will not support it. The administration may selectively approve state waivers and pursue other regulatory reform to water down portions of the program.

House Republicans want to set their sights on both Medicaid and Medicare in 2018. The Obamacare repeal bill passed in the House would have reduced future growth in Medicaid considerably by converting the entitlement program to a per capita cap funding mechanism. The House would like to pass something again along those lines for Medicaid and even look to a premium-support model in Medicare. The House could pass the Medicaid measure. They might even be able to pass the Medicare one (although that is less clear). What is in much greater doubt is the Senate endorsing either in 2018. As an aside, remember that MedHOK supports responsible Medicaid and Medicare reform, based on the principle that these programs will be truly in jeopardy unless their forecasted, unfunded liabilities are dealt with now. The administration will seek to reshape Medicaid on their own using 1115 waiver authority. The administration, however, does not like the current reform and experimentation in the Medicare and Medicaid fee-for-service worlds and will continue rolling this back.

Support for Medicare Advantage remains high among both parties and the public at large, as does the rigorous compliance and Star quality regime. It seems we have reached a consensus in the U.S. that reasonable government regulation coupled with efficient private sector delivery is the way to go. This is the way we will change the paradigm from a transaction system to one based on quality and outcomes. The compliance and quality regime will extend to Medicaid as the Trump administration has largely kept the Medicaid “mega-rule” intact. Congress and the administration want to continue reform efforts by focusing on the significantly co-morbid in both Medicaid and Medicare. The Medicare Star program will continue to morph its clinical measures into what we are calling comprehensive management measures. Special Needs Plans (SNPs), Medicare-Medicaid Plans (MMPs), and managed long term care (MLTC) should continue to grow in Medicare and Medicaid. Due to potential healthcare cuts, including those possibly to Medicare, it’s likely that private plans will take up the slack and that Medicare Advantage enrollment continues to soar.

What about drug price controls? This is harder to predict. Price increases have been more moderate the past year or so. But here is one of our long-shot predictions: we see the President potentially galvanizing the public around this hot button issue in 2018. Proposals could span the truly aggressive to simply extending the Medicaid rebate program to Medicare Part D. Waste, fraud, and abuse will continue to garner focus across all lines of business, as will risk adjustment and data validation.

Last, as we noted, we don’t see Medicaid and Medicare entitlement reform passing the Senate next year. However, the GOP’s conservative stance on budget issues as well as the passage of the tax bill (which will add to the deficit based on CBO’s relatively static forecasting) will mean cuts to many healthcare programs. Theoretically, Medicare may be cut by as much as $25 billion each year, about 4 percent of spending. But there is some reason to think that the Senate will seek to obviate that reduction.

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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