Medical RAC Audits Reviewed by Statistician Frank Cohen Medical RAC Audits Reviewed by Statistician Frank Cohen

ACA Repeal Revived With Passage Of House Bill

By Grant Huang, CPC, CPMA ,Director of Content at DoctorsManagement.

House Republicans have resurrected their efforts to repeal the Affordable Care Act (ACA), making compromises to earn the votes of their more conservative members to pass the American Healthcare Act (AHCA) May 4.

Republican members of the House of Representatives, under pressure from President Donald J. Trump to make progress on one of his central campaign promises, eventually agreed to change the AHCA by making the bill less like the ACA, stripping away more of its provisions. While its passage is a success for those who favor repeal, the Senate is guaranteed to produce a drastically different bill, and both chambers must agree on a final bill. “Whatever comes out of the Senate, it’s not going to be like the final House bill that passed,” says Bradley Coffey, government affairs manager for the American Association of Orthopaedic Executives (AAOE) in Indianapolis.

The AHCA contains two key changes from its original version that were needed to win over more conservative members in the House: Allowing states to opt out of the pre-existing conditions requirement, and allowing states to reduce the minimum required benefits package for any insurance plan.

Here’s a full list of provisions in the bill that now sits before the Senate:

States’ choice on pre-existing conditions. States can choose to allow insurers to charge much higher premiums for patients with pre-existing conditions. The first version of the AHCA banned higher premiums and did not give states a choice, exactly like the ACA. Even if states opt to keep the pre-existing conditions measure, the AHCA has a crucial caveat that allows higher premiums for pre-existing conditions if a patient has a lapse in insurance coverage over the most recent 18-month period.

States’ choice on mandatory benefits. States can choose to reduce the minimum set of required benefits for any insurance plan, to the point where some plans could offer very few benefits, but be significantly cheaper. The first version of the AHCA established a set of mandatory benefits similar to the ACA, but with fewer benefits (for example, striking items such as maternity care).

Lifetime benefit cap could return. Because of the above bullet on states being able to define mandatory benefits, states could choose not to require a lifetime cap on insurance benefits. Thus some plans could include a lifetime cap on benefits, though the sickest patients who would be hurt most by such a cap would probably be looking to purchase more comprehensive plans anyway.

High-risk pools. The AHCA sets aside approximately $115 billion over nine years for “high-risk pools” in each state. These pools would contain the sickest patients and this money would be earmarked to help states defray the costs of insuring them. However, critics contend that because the AHCA doesn’t mandate that states use all of this money toward high-risk pools (the money could be used in a variety of ways, such as paying for preventive services instead), the $115 billion won’t be enough. Some studies suggest that it would cost more than $115 billion annually to adequately fund high-risk pools.

Individual mandate goes away. The AHCA eliminates the ACA’s individual mandate, which requires individuals to purchase health insurance or pay a tax penalty.

Age-based tax credits. Unlike the ACA’s income-based tax credits, which help offset the cost of insurance premiums, the AHCA relies on age-based tax credits which are phased out for higher-income individuals (above $75,000 for single individuals and above $150,000 for married couples). The result is a more regressive approach to subsidizing the costs of health care that wouldn’t be as generous to the poor, but would reduce the overall costs of the program.

Repeal still has a long way to go

Republicans celebrated the House’s passage of the AHCA, but the legislative path forward is still full of formidable obstacles. First it must pass the Senate, then be reviewed again by the House, and only with both chambers of Congress in agreement would the resulting bill reach President Trump’s desk for his signature.

In the Senate, Republicans have a much narrower majority, and can only pass the AHCA with a simple majority by relying on reconciliation rules. These rules restrict the types of measures that can be passed in legislation to only those that affect revenues and spending. Other measures, such as removing ACA provisions that ban higher premiums charged by insurers for pre-existing conditions, do not directly affect federal revenues and spending, so they could not be passed via reconciliation.

Also, several Republican Senators are seen as political moderates with less conservative constituencies, and they have already expressed hostility toward some of the changes in the AHCA. Sen. Bill Cassidy (R-La.), stated that he could not support a bill that would weaken the ACA’s protections for people with pre-existing conditions. Sen. Susan Collins (R-Maine), criticized the AHCA for significantly reducing coverage, including significant cuts to Medicaid.

Thus the Senate is expected to craft its own bill, with Republicans forming a 13-man working group under the leadership of majority leader Mitch McConnell (R-Ky.), who told reporters May 8 that the AHCA’s legislative path “will not be quick, simple, or easy.”

However, Democrats can’t count on a united front in the Senate against the eventual Senate bill, Coffey says. “Several Democrats face Republican challengers in 2018 and have a motivation to vote for a Senate repeal bill,” he explains. “I think you’re going to see an enormous amount of pressure on these Democrats from conservative states to make some kind of a deal.”

Grant Huang, CPC, CPMA (ghuang@drsmgmt.com). The author is Director of Content at DoctorsManagement.