By Susan Blumenthal, M.D. and Alexis Boaz
Today, the Senate is scheduled to vote on health care reform legislation but at this moment it is unclear what the bill will contain. Last week, the Senate’s impasse on a procedural vote to move forward with the Better Care Reconciliation Act (BCRA) health reform legislation underscored how much public and policymaker awareness about the Patient Protection and Affordable Care Act (ACA) of 2010 has increased since the 2016 Presidential election. Since its passage seven years ago, the ACA has dramatically transformed the U.S. health care system. Before the ACA, approximately 79 million Americans — more than one in four people — either lacked health insurance or were underinsured, and a study published in the American Journal of Public Health estimated that 45,000 people lost their lives annually as a result. As of January 2017, the ACA’s comprehensive health reform provisions resulted in achieving a historically low uninsured rate of only 8.8 percent.
It’s not clear whether the legislation will seek to replace the Affordable Care Act or solely repeal it. Despite numerous attempts to repeal the ACA over the past 7 years, the legislation has remained intact, though the latest repeal and/or replace attempts with the passage of the U.S. House of Representative’s American Health Care Act (AHCA) on May 4, 2017, the introduction of the U.S. Senate’s Better Care Reconciliation Act of 2017 (BCRA) on June 22, 2017, and the Senate’s Obamacare Repeal and Reconciliation Act (ORRA) released last week on July 18, 2017, threaten the progress that has been made by the ACA to improve the health of people in America. Whether the Republican Congress can pass health reform legislation that will be signed into law is uncertain. What is urgently needed now are bipartisan solutions to strengthen the ACA including addressing rising premium rates, encouraging healthy young people to sign up, ensuring adequate subsidies to purchase insurance in order to stabilize the health exchanges and expanding Medicaid in those states that have not yet done so. This is the path forward to safeguard the accomplishments achieved by this landmark legislation in the pursuit of quality, affordable, accessible, and equitable health care for all Americans.
THE AFFORDABLE CARE ACT OF 2010
Making History with the ACA
The ACA represents the most significant and comprehensive health care legislation since the passage of the Social Security Amendments of 1965 that established Medicare and Medicaid. For more than a hundred years, Presidents have introduced health care reform legislation. Since President Theodore Roosevelt’s endorsement of health insurance under his social platform in 1912, presidential administration after administration has attempted to make its mark on health reform to reshape the American health care system as it grew from private practice doctors and charitable public hospitals into the vast, complex, and patchwork system of today with a mix of government and private sector providers. Even during the broad implementation of Federal social programs under the New Deal between 1933 and 1937, only minimal progress was made in health care reform because President Franklin Roosevelt worried that the controversial inclusion of national health insurance would impede passage of other reforms that he was proposing, including the 1938 Fair Labor Standards Act and the creation of the Social Security Administration in 1935.
While the health care system continued to evolve in America through incremental but influential changes, such as with the inclusion of health benefits in employment packages and passage the of the Hill-Burton Act to increase the number of hospitals in the U.S., the enactment of Medicare and Medicaid in 1965 was the first significant step towards major health reform. These programs addressed the needs of seniors and the disabled who found it more difficult to afford private insurance coverage due to discriminatory high premiums charges for these vulnerable groups. Congress subsequently attempted legislative fixes to contain increasing costs after the passage of Medicare and Medicaid, including the Health Maintenance Organization Act of 1973. However, comprehensive health insurance reform was not attempted again until President Bill Clinton’s introduction of the Health Security Act, a managed competition approach that called for universal coverage, employer and Individual Mandates, and regulated competition between insurers. Although this legislation ultimately could not overcome significant political hurdles placed in its way, President Clinton did pass the Children’s Health Insurance Plan that — combined with Medicaid —provides access to care for one in three children in the U.S. today.
President Obama made history with the passage of the ACA in 2010, transforming the health care system with comprehensive reforms addressing coverage, access, quality, and prevention of disease while fueling innovation. Before the ACA, over 47 million Americans, or 18 percent of the U.S. population, lacked health insurance. A 2009 study estimated that 45,000 deaths annually in America were associated with lack of health insurance. Up to 129 million Americans — or one in two people — could be discriminatorily charged higher premiums or denied coverage for pre-existing conditions. Even insured Americans found that they could still be denied treatment if they were underinsured. Health care costs skyrocketed, nearly doubling between 1998 and 2008, with expenditures reaching 18 percent of the overall GDP at $2.5 trillion or $8,147 per person in 2009. While wages increased by 50 percent between 2001 and 2011, the average worker’s contribution to employer-sponsored insurance premiums increased by 168 percent. In 2009, medical bills were one of the largest causal factors of consumer bankruptcy. Even large corporations like Starbucks — spending more on health insurance than coffee beans in 2005 — were affected by skyrocketing costs. These trends were unsustainable and something had to be done. In 2008 before introduction of the ACA, 82 percent of Americans reportedly wanted an overhaul of the U.S. health care system due to its inefficiencies, inequities and rising costs.
THE ACA: ACCOMPLISHMENTS
Following its passage in 2010, the ACA established standards for insurance plans to provide comprehensive benefits and a range of consumer protections. The legislation increased access to coverage by (1) expanding Medicaid, (2) requiring large employers to provide health plans for their workers, (3) requiring large businesses with more than 50 employees to offer health insurance while providing tax incentives for smaller business to also provide coverage, and (4) enhancing the individual market by providing subsidies for those who could not afford to purchase insurance. Additionally, the ACA contains proposals for innovation in quality, care delivery, research, and prevention. Key provisions of the legislation included:
1. IMPROVED SCOPE OF COVERAGE & CONSUMER PROTECTIONS: The ACA set insurance coverage standards to establish comprehensive, quality plans while providing consumer protections through a Patient Bill of Rights to help people gain access to these plans.
- Essential Health Benefits and Preventive Services: The ACA standardized minimum Essential Health Benefits to be offered by all individual and small group health plans, Medicaid, and Medicare with no annual or lifetime coverage caps. Ten categories of covered essential benefits included: ambulatory patient services (outpatient care); emergency services; hospitalization (inpatient care); prenatal, maternity, and newborn care; mental health and substance use disorder services; qualifying prescription drugs (including at least one drug in every category of federally-approved drug); rehabilitative services and devices; laboratory services; preventive and wellness services; chronic disease management; and pediatric services. Included was coverage for all FDA-approved contraceptive methods with some exceptions for religiously affiliated organizations. Cost-sharing by consumers for certain preventive services and screenings was prohibited.
- Improved Consumer Protections and a Patient Bill of Rights: Through the community-rating requirement, the ACA prohibited charging consumers higher premiums based on gender and charging older adults more than 3 times the premium rate for a 21 year old. The ACA required that insurers charge everyone the same price for the same coverage regardless of health status after adjusting for age, with the exception of smokers. It also prohibited denying insurance for pre-existing conditions and setting lifetime caps on benefits. The ACA required insurers to spend at least 80 to 85 percent of premium dollars on health costs and to pay 100 percent for in-network Essential Health Benefits once the beneficiary reaches their out-of-pocket maximum.
2. IMPROVED ACCESS TO COVERAGE: The ACA increased access to health care by expanding Medicaid in many states, requiring large employers to provide health plans, and enhancing the individual market to fill coverage gaps.
- State-Based Medicaid Expansion & CHIP Reauthorization: The ACA provided federal funding to cover state's costs of expanding Medicaid to include all non-Medicare eligible individuals under 65 with household incomes up to 138 percent of the Federal Poverty Level (FPL), entitling them to Medicaid’s Essential Health Benefits. The federal government covered 100 percent of the expansion costs in 2014, 2015, and 2016, and will decrease this amount to cover 90 percent of costs in 2020 and beyond. Children living in households earning up to 138 percent of the FPL transitioned to Medicaid while the enrollment process for the Children’s Health Insurance Program was streamlined. As of January 2017, 32 states (including the District of Columbia) have expanded Medicaid under the ACA.
- Employer Shared Responsibility Provision: The ACA required employers with 50 or more full-time workers to cover at least 95 percent of full-time workers and their dependents and provide insurance meeting minimum value and affordability standards to avoid paying a penalty. Small businesses (with under 50 employees) were exempt from the employer mandate, but eligible businesses with fewer than 25 full time employees covering at least 50 percent of the full time employees’ premium costs could become eligible for tax credits to purchase coverage through the Small Business Health Options program (SHOP) Marketplace, a program established to allow small businesses to compare and purchase plans for employees.
- Individual Mandate: An important component of the ACA was the Individual Mandate (Individual Shared Responsibility Payment) requiring all Americans to be insured. Individuals choosing not to purchase health coverage were required to pay a tax penalty. This provision was created to counter adverse selection and motivate participation in the individual market to stabilize the risk pool for individuals otherwise not covered through Medicare, Medicaid, or employee sponsored insurance.
- Enhanced Individual Market with Subsidies: The ACA established Qualified Health Plans (QHPs) to standardize coverage in the individual market. QHPs are available on the federally-facilitated Healthcare.gov or state-based health insurance exchanges, where individuals can compare and purchase insurance coverage. Different tiers of QHPs varied by deductible levels, monthly premium levels, and cost-sharing requirements. Federal subsidies were provided as advanced tax credits to help consumers between 100 and 400 percent of the FPL to purchase insurance by covering the difference between the cost of insurance and the maximum amount the consumer would have to pay to purchase insurance. Further “cost-sharing reductions” are available to qualified beneficiaries on specific plans to subsidize deductibles, copayments, and coinsurance to help people purchase health insurance. To address insurers’ concerns about the the ACA’s requirements and to help stabilize the market, the federal government also provides cost-reduction subsidies directly to insurance companies.
- Coverage for Dependents: The ACA allows young adults to remain on their parent’s insurance plan until their 26th birthday, regardless of any life changes.
3. INNOVATIONS IN QUALITY, HEALTH CARE DELIVERY, AND PREVENTION: The ACA contained a series of initiatives to stimulate innovation in healthcare quality, service delivery, research, and prevention.
- Prevention and Public Health Fund: The ACA established the Prevention and Public Health Fund which has provided approximately $1 billion annually to the promotion of national prevention and public health initiatives in communities across the country. Programs that are supported enhance healthcare quality, improve health outcomes, and strengthen community and state preparedness for infectious disease outbreaks.
- Community Health Centers: The ACA increased direct investment in community health centers to significantly improve their capacity to provide care. Community health centers are the largest source of comprehensive primary care for underserved communities and populations, providing services to 24.3 million patients in 2015.
- State Innovation Waivers: The ACA allows “innovation waivers” for states to modify key ACA requirements with innovative alternatives or targeted fixes to the ACA’s private insurance provisions that are consistent with the quality and consumer protection goals of the ACA.
THE ACA’S IMPACT
The ACA’s comprehensive health reforms have resulted in a historically low uninsured rate of 8.8 percent in the U.S. By 2016, 20.4 million people had gained insurance coverage. Approximately 11 million people — including nearly two million people in rural areas — gained insurance coverage as a result of the Medicaid expansion. The cost curve of U.S. health expenditures, the highest among all other industrialized countries, has bent, and is projected to reach $4 trillion in 2020 compared to the $4.6 trillion projected before the ACA, according to the Urban Institute. Despite recent increases in premiums, it should be noted that the costs are lower than pre-ACA projections, and according to recent surveys, the majority of people on ACA plans or who have gained insurance coverage through Medicaid expansion are satisfied with their coverage.
However, the ACA also has issues that need to be addressed. Insurance premiums have increased since major provisions of the ACA were enacted in 2013. While data released in October 2016 projected that premiums would rise an average of 25 percent in 2017, a report released by National Conference of State Legislatures found that due to the ACA’s method of tying tax credit subsidies to premiums largely insulated those in the marketplace and the 25 percent figure did not take into account the premium tax credits. However, Americans who found themselves in the coverage gap, especially in states that did not expand Medicaid, experienced difficulties affording insurance. Additionally, despite being relatively insulated from premium surges, many Americans receiving tax credits found that the amounts were initially set too low relative to premiums and some were unable to maintain their health insurance coverage. The increased enrollment in high-deductible plans to avoid the Individual Mandate tax penalty resulted in some Americans being unable to reap the benefits of insurance before meeting the high deductibles while paying high co-pays. This, combined with the relatively low penalty for those people who did not comply with the Individual Mandate provision, led to instances of adverse selection where young and healthy people opted out of purchasing insurance, resulting in several insurers withdrawing from the health marketplace in several areas of the country. For example, the sole insurer on the exchanges in Knoxville, Tennessee, is planning to drop out of the marketplace in 2018, leaving approximately 40,000 Americans without ACA marketplace options to use their tax credits. Other concerns expressed by some critics of the ACA have included the legislation’s impact on the national debt, the Individual Mandate’s effect on personal choice and efficiency, paying for what appear to be “unnecessary services,” such as maternal benefits if you are over 60 years of age, and the potential of some employers to cut working hours and employees to overcome the ACA’s requirements. However, all of these issues can be fixed with the political will to do so. The ACA should be strengthened, not repealed and replaced.
THE STRUGGLE TO “REPEAL AND REPLACE” THE ACA
Despite the tremendous progress made by the ACA, repealing the legislation was a key element of the Republican Presidential, Senate and House candidates’ platforms, so when the 2016 Presidential election resulted in a Republican-controlled Congress and Executive Branch, health reform was at the top of the policy agenda. However, ACA de-stabilizing actions from the Administration, division within the Republican party, and the shift to a positive public perception of the ACA has left the fate of the “repeal and replace” agenda unresolved.
The Administration and the ACA
After his inauguration on January 20, 2017, President Trump immediately signed an Executive Order to “minimize the economic burden” of the ACA. Though the order was vague, its effects began to manifest. On February 15, 2017, the Internal Revenue Service (IRS) stated it would not reject tax forms in which the filer declined to state whether they had purchased health insurance, a policy that was supposed to be implemented pursuant to the Individual Mandate provision of the ACA. The Trump Administration further issued a 71-page proposed regulation making enrollment in marketplace insurance plans more difficult by requiring more documentation for people signing up during “special enrollment periods,” shortening the open enrollment window, changing “actuarial value” regulations to reduce ACA subsidies, and decreasing the amount of coverage required by silver Qualified Health Plans. On May 15, 2017, the Administration announced it would begin dismantling the Small Business Health Options Program, and on May 19, 2017, the President expressed interest in ending subsidies paid to insurers, a move that could unravel the insurance marketplace even in areas where the market is currently stable. The White House’s failure to commit to continuing cost-reduction subsidies to insurers and enforcement of the Individual Mandate serves as a catalyst to destabilize the ACA marketplaces as insurers threaten to raise premiums or leave the ACA markets due to the uncertainty surrounding the Administration’s upholding of these two provisions that are critical to the ACA’s stabilization and success.
Congress’ Attempts to Legislate “Repeal and Replace” of the Affordable Care Act
Despite attaining a Republican Administration as well as a majority in both chambers of Congress, the opportunity to “repeal and replace” the ACA in January 2017 revealed deep divisions in approaches to health reform within the Republican-controlled Congress. The ACA had passed on March 21, 2010, without any Republican votes in either the House or Senate, with the Republicans initiating their repeal efforts the following day. The Republican party consistently opposed the ACA, voting 54 times to repeal or alter the legislation between 2011 and 2014. When Congress began the ACA repeal process in January 2017, ideological clashes between moderate Republicans and conservative Republicans were exposed as many called for fixing the ACA while other called for fully repealing the bill. These party divisions have characterized repeal and replace efforts at every step of the legislative process. It might be helpful to acknowledge the history of the law moving forward. The individual mandate contained in the ACA was a policy first proposed by the conservative Heritage Foundation in 1989 under the principle of “individual responsibility” and was modeled after the health care reform legislation passed in Massachusetts and signed into law by its Republican governor, Mitt Romney in 2006. In this bill, everyone would have to buy in health insurance (with subsidies if needed) or pay a penalty. Today, 96% of people living in the Commonwealth of Massachusetts have health insurance.
Today, another key factor fueling the health reform debate in Congress is a dramatically improved public opinion about the ACA as more Americans gained a greater awareness and understanding of the impact of the law’s consumer protections — such as guaranteed insurance availability for people with pre-existing conditions. The ACA reached 51 percent favorability as of July 2017 compared to public opinion between 2010 and 2016 when more Americans opposed than supported the legislation as a result of the constant criticism of the legislation, a rocky initial implementation of the law, failure to gain traction with young and healthy Americans, and a general lack of knowledge about many of its significant provisions. Even as late as February 2017, 17 percent of Americans thought that the “Affordable Care Act” and “Obamacare” were different laws. However, greater understanding of the legislation and the post-Inauguration shift in public opinion — demonstrated by the over 100 pro-ACA rallies held across the country and the town hall meetings where lawmakers heard from concerned, angry constituents demanding that the ACA be kept in place and strengthened — made a growing number of Republicans in Congress reluctant to repeal the ACA without a clear alternative proposal.
CONGRESSIONAL ALTERNATIVE HEALTH REFORM PROPOSALS TO THE ACA
The American Health Care Act (AHCA)
On March 6, 2017, House Republicans unveiled a replacement bill, the American Health Care Act (AHCA). Key provisions included:
- Replacing the ACA’s Individual Mandate with a year-long 30 percent surcharge for people with lapsed insurance for more than 63 days;
- The creation of state-based high-risk pools for people with pre-existing conditions;
- Stopping further Medicaid expansion and restructuring Medicaid funding to state block-grants or per-capita caps;
- Allowing insurers to charge older Americans up to five times more than younger adults;
- Re-engineering tax credits to be based only on age (not income);
- Significantly decreasing the amount for low-income individuals currently receiving tax credits under the ACA;
- Eliminating ACA-implemented taxes that would have raised $592 billion in revenue;
- Halting Planned Parenthood funding for one year; and
- Eliminating the $18 billion Prevention and Public Health Fund that provided funding to communities and states for prevention programs and pandemic preparedness initiatives.
Upon its release, the AHCA immediately received criticism from both sides of the aisle, signaling the uphill battle faced by House Republicans to pass the legislation. Conservative Republicans in the House of Representatives argued that the legislation did not go far enough in repealing the ACA, with some calling the plan “Obamacare Lite.” While conservatives criticized the slow repeal of the ACA’s Medicaid expansions, more moderate Republicans expressed concern that the proposal would not provide “stability and certainty” in states that had expanded Medicaid. Adding further fuel to the fire were industry groups, doctors’ and nurses’ groups, and conservative and progressive organizations that voiced their strong opposition to the legislation. This initial opposition was further exacerbated by the release of a Congressional Budget Office (CBO) cost-assessment on March 13, 2017, which estimated that 24 million Americans would be uninsured by 2026 under the AHCA. When it became evident that the AHCA did not have enough support to pass through the House, the bill was pulled on March 24, 2017, the 7th anniversary of the passage of the ACA, before a vote on the legislation could take place.
Under renewed pressure from the White House in late April 2017, Republicans made several changes to the original AHCA legislation in order to gain more support. On May 4, 2017, without an updated CBO assessment reflecting the impact of these changes on the number of uninsured and costs as well as with only minimal debate, the AHCA was passed by the House by a vote of 217-213. The new version of the AHCA allowed states to seek waivers to opt out of requiring insurers to use the community rating system, thereby effectively permitting insurers to charge higher premiums to people with pre-existing conditions while allowing older Americans to be charged more than 5 times that of younger Americans, and allowing states to seek waivers allowing insurers to opt out of offering comprehensive Essential Health Benefits coverage.
The CBO score, released on May 24, 2017, found that by 2026, 23 million more people would be uninsured under the updated AHCA compared to the ACA. CBO estimated that the AHCA would reduce Medicaid spending by $880 billion by 2026. While average premiums were projected to decrease, the report found that insurance plans would also pay for a “smaller proportion of health care costs.” Additionally, the CBO report found that while many areas of the insurance market might remain stable as they would under the ACA, one-sixth of the population “resides in areas in which the non-group market would become unstable” by 2020, which — even with use of the state waivers — might lead to higher premiums over time resulting in the sick, seniors, and those with pre-existing conditions being priced out of the marketplace under the AHCA. While the CBO report also stated that the ACHA would result in a net reduction of $119 billion in the federal deficit by 2026, a subsequent economic impact analysis released by The Commonwealth Fund found that the AHCA would ultimately lead to lower economic activity in the long-run resulting in the loss of 924,000 jobs, a $93 billion decrease in gross state products, and a $148 billion reduction in business output in the U.S. by 2026. Even before CBO released its analysis, response to the updated bill was similar to that of the previous version of the AHCA with a broad range of stakeholders from insurers to public health advocacy groups, physicians, hospitals, and other health care providers, emphatically criticizing the plan as Members of Congress faced a backlash from constituents. As of May 11, 2017, public opinion surveys found that only 21 percent of Americans approved of the updated AHCA while 56 percent of Americans disapproved of the legislation.
THE SENATE’S BETTER CARE RECONCILIATION ACT OF 2017 (BCRA)
Following passage of the AHCA, the debate about health care reform shifted to the Senate. As was the case in the House, legislative challenges became immediately apparent when the Senate began working on their version of health reform legislation. Ideological differences similarly emerged when moderate Republicans emphasized the goals of ensuring that pre-existing condition coverage was maintained, while conservatives hoped to reduce the role of government in health care even more than was proposed in the AHCA. Concern over public opinion was also prominent since sixty-two senators — including some Republicans — represented states that had expanded Medicaid through the ACA. A May 2017 Kaiser Health Tracking poll found that only 8 percent of the public thought the Senate should pass the AHCA without changes and found that "more Americans [had] an unfavorable view of the AHCA than a favorable one (55 percent vs. 31 percent, respectively)." A significant hurdle for Senate Republicans was gaining enough votes to pass any health reform bill, particularly given Republican’s narrow 52 Member majority in the Chamber.. Under these constraints, a loss of two Republican Senators would require a tie-breaker vote from the Vice President while three or more Republicans not voting for the bill would prevent passage of the legislation.
After weeks of closed-door health reform negotiations, the Senate released the Better Care Reconciliation Act (BCRA) on June 22, 2017. The bill was largely similar to the AHCA, but contained some significant differences. The BCRA would begin rolling back Medicaid expansion in 2021 and, like the House bill, reduce federal fund matching and allocate fixed amounts to states. However, the Senate bill further chipped away at Medicaid by tying funding to general inflation rather than healthcare-specific inflation, which would ultimately lead to severe cuts to state Medicaid programs as a result of the funding growth level being disproportionate to rising health care costs. The BCRA also allows states to require work as a condition of eligibility for non-elderly Medicaid adults who are not disabled or pregnant. While the BCRA does not allow states to opt out of coverage for pre-existing conditions, it still allows states to redefine Essential Health Benefits. Additionally, caps on annual and lifetime spending would no longer apply for benefits deemed non-essential. Like the AHCA, the BCRA would also stop Planned Parenthood funding for one year, eliminate the ACA-implemented revenue-creating taxes, and remove the employer mandate and cost-sharing subsidies. However, the BCRA would allow young adults under the age of 26 to stay on their parent’s insurance, maintain the ACA’s use of a modified community rating, and calculate tax credits based on income rather than the AHCA’s method of using age. While the original BCRA did not include the AHCA’s 30 percent surcharge for a coverage lapse, a June 26th change added a provision imposing a six-month waiting period for new insurance for lapses in coverage over 63 days in order to compel people to maintain continuous coverage.
On June 26, 2017, the CBO released its score for the BCRA, finding that 22 million more Americans would be uninsured by 2026 compared to under the ACA and older lower-income Americans would disproportionately be affected and would likely be charged five times more than younger people on the health exchanges. Included in the number of uninsured are the young and healthy that would drop out of the individual market due to the repeal of the Individual Mandate. Significantly, 15 million fewer people would be enrolled in Medicaid by 2026 compared to the ACA due to the severe funding reductions in the program as a result of the legislation. Though the BCRA would reduce the federal deficit by $321 billion over ten years and would lower premiums by 26 percent by 2026, plans would likely price the sickest and oldest out of the market while offering less coverage with higher deductibles. Additionally, the wealthy would receive a significant tax cut. A study by The Commonwealth Fund found that even compared to the AHCA, the BCRA “would lead to significantly larger job losses and deeper reductions in states’ economies,” resulting in 1.45 million fewer jobs and a decrease in $162 gross state products by 2026 compared to the ACA, hitting Medicaid expansion states the hardest.
Like the AHCA, the BCRA received widespread criticism and opposition upon its release, including from several Republican Senators who opposed voting for the BCRA without additional amendments. There were broad of concerns expressed about the steep cuts to Medicaid by some to the BCRA being too similar to the ACA for other Senators. To address some of these issues after consideration of proposed amendments, Republicans revised and reintroduced an updated BCRA on July 13, 2017. The new version of the BCRA — seeking to appease both sides of the Republican spectrum — included allowing health savings accounts to be used to pay for insurance premiums, $45 billion in funding to address the opioid epidemic, increasing market stabilization funding, and maintaining certain ACA taxes, such as the net investment income tax and payroll tax. Additionally, insurers would be able to offer bare-bones coverage without the use of the community rating or coverage of Essential Health Benefits. CBO released an updated score on July 20, 2017, maintaining that even with these updates, 22 million more Americans would be uninsured by 2026 under this amended version of the BCRA. Furthermore, the Medicaid funding added to this version of the BCRA would be inadequate to address the opioid epidemic in America as the program currently provides $90 billion in opioid treatment in addition to needed services for co-occurring conditions including mental illness, respiratory infections, hepatitis C and other illnesses. In her review of the BCRA, the Senate Parliamentarian flagged three major provisions of the bill that did not meet budget reconciliation rules and therefore would require a 60 vote majority to pass the legislation.
One of the most devastating impacts of the BCRA is its significant cuts to Medicaid, a program that provides health care for 74 million people, among them 60 percent of nursing home residents and millions of people with disabilities. The CBO has estimated that under the BCRA, enrollment in Medicaid would fall by about 16 percent. While under both the AHCA and the BCRA, Medicaid expansion would ultimately be phased out and traditional funds could be block granted or capped by enrollee in states – resulting in a potential 40 percent federal funding decrease affecting 11 million of the 16 million people that gained coverage through Medicaid expansion – the impact would likely be even more severe under the BCRA, due to the attachment of funding levels to general inflation. Restructuring and reducing Medicaid funding as presented under either bill would shift financial risk from the Federal government to the states increasing the likelihood that they would have to impose limits per Medicaid enrollee, resulting in significantly less access to services for vulnerable population groups. Moreover, restructuring Medicaid with the intention that current non-disabled Medicaid beneficiaries can find a job with health benefits overlooks that 8 in 10 adults that benefitted from the ACA Medicaid expansion were from working families with jobs that often did not provide health insurance, a problem that would be further exacerbated by the removal of the employer mandate.
NEXT STEPS IN HEALTH REFORM: REPEAL WITHOUT REPLACE?
Despite the addition of amendments, on July 18, 2017, the number of Republican senators opposing the BCRA rose to four, effectively blocking the bill. Hours later, facing backlash from the White House for yet another failed legislative attempt to pass some health reform legislation, Republican Senate leadership changed course, bringing back a repeal bill that was passed but then vetoed by President Obama in 2015. The bill, known as the Obamacare Repeal and Reconciliation Act (ORRA), would repeal various elements of the ACA, including repealing and phasing out ACA taxes, mandates, and Medicaid expansion over two years, while giving Congress a two year deadline to develop replacement legislation. However, the ACA’s private insurance regulations, such as coverage of people with pre-existing conditions, would remain since this provision would require 60 votes to repeal as it was originally passed using the budget reconciliation process.
Shortly after the ORRA’s release, three Republican senators announced they would not support the partial repeal bill. CBO also released a score on July 19, 2017, finding that this repeal bill would result in 32 million more people uninsured by 2026. Additionally, the CBO found that average premiums in the non-group market would increase relative to the ACA by 25 percent by 2018, 50 percent by 2020, and then doubling by 2026. Furthermore, the CBO report also found that by 2026, as a result of the ORRA, 75 percent of Americans would be living in an area with no insurers left in the marketplace.
Despite the release of increasingly dire CBO projections, the Senate Parliamentarian advising that some provisions in the ORRA do not comply with the reconciliation process, and not yet having enough votes to pass the Obamacare Repeal and Reconciliation Act, Republican leadership announced it would continue to push the legislation forward, setting a procedural vote for this week. Leadership has remarked
that no matter the outcome of this vote, Republican Senators will continue working to pass health legislation having promised voters to do so. Even if the Senate is able to pass legislation, procedural barriers could still unhinge the health reform process. The Senate would be required to conference with the House, and the two chambers would then need to reconcile what has been a highly criticized and controversial legislative approach to health reform. As an alternative, the House could pass a bill identical to the legislation that the Senate passes to avoid conferencing in a similar process that was used to pass the ACA seven years ago.
In previous assessments, the CBO found that the overall individual insurance market would likely remain stable under the ACA (absent Executive Branch action to impede implementation of the ACA), somewhat debunking the myth of a death-spiral for the legislation. However, with insurers continuing to drop out of health marketplaces in some areas of the country and with Members of Congress becoming increasingly concerned for their constituents facing few options in the marketplace, the time is opportune to build on the ACA’s significant progress in expanding access to coverage by strengthening the law.
The ACA should be viewed as a significant step forward, and as recent town halls and public opinion polls demonstrate — the legislation has raised American’s expectations of their health care system to include certain protections, such as coverage of pre-existing conditions and preventive services. Repealing the ACA in its entirety or significantly reducing access to coverage would not only harm those who cannot access health care, but would damage the long-term health status of many Americans and the viability of our health infrastructure including hospitals and clinics. Investing in health is an investment in our people, our economy, and America’s national security.
What ten actions can be taken to strengthen the Affordable Care Act?
The ACA should be repaired instead of repealed and replaced. What are some of the strategies to accomplish this goal? Strategies include 1) Medicaid should be expanded in states that have not yet done so and the income level for qualifying should be raised so that more people are eligible to enroll; 2) lowering the age for enrollment into Medicare to age 50; 3) the Federal government could also provide more funds to lower the cost of health insurance that individuals and families face. This could be accomplished in part by increasing the level of subsidies available for insurance plans purchased on the exchanges, or raising the income thresholds at which the subsidies phase out — or both; 4) National and state-wide marketing campaigns are needed to get a greater number of young, healthy people to purchase insurance; 5) Insurance companies could potentially offer a 50% discount on the first year of coverage as an incentive; 6) automatic insurance enrollment should also be considered to help stabilize the risk pool and reduce premiums. Private insurance markets only work well when there is a large and diversified risk pool; 7) if universal or near-universal coverage is to be achieved, the Individual Mandate will have to be enforced which may mean raising the penalties for non-compliance and enforcing them more effectively 8) A public option, “A Healthy USA Plan,” could be offered on the exchanges to provide more options and greater competition to lower premium prices; 9) Additionally, there is $8 billion in reinsurance payments that have been promised to insurance companies under provisions of the ACA that could help bring premiums down but have been blocked.; and 10) Health reform efforts should also address regulating prescription drug prices including allowing Medicare to negotiate costs. The astronomical $323 billion spending on prescription drugs in 2015 will soar to a projected $610 billion by 2021. Currently, America is the only country in the developed world that does not negotiate pharmaceutical costs: drug prices are 40-60% lower in these countries as compared to the U.S.
Sadly, the administration’s proposed FY2018 budget (A New Foundation for American Greatness) does the opposite of strengthening the ACA. While it proposes to eliminate the country’s budget deficit, it instead provides major tax cuts to the wealthy at the expense of the sick and the poor. The Tax Policy Center estimates that the top 1% of wage earners would receive a $37,500 tax cut annually while the middle class would get about a $300 tax cut. The Administration’s budget proposes significant cuts to Medicaid and the Children’s Health Insurance Program over the next ten years and prohibits any federal funding for Planned Parenthood. The FY2018 budget also includes a $192 billion cut from the Supplemental Nutritional Assistance Program (SNAP) which would negatively affect 42 million low income Americans, 50 percent of whom are children. The budget also reduces the Centers for Disease Control and Prevention budget by 17 percent, significantly impeding efforts to build a culture of health in America while jeopardizing public health preparedness initiatives to help prevent and respond to infectious disease outbreaks in the U.S. Additionally, the budget includes a $6 billion cut for the National Institutes of Health which would significantly impede efforts to innovate and discover cures and prevention strategies for the diseases that affect people in our country today.
Devising a short-term, partisan solution for repealing and replacing the ACA for political gain fails to recognize the significant role that health care plays in our lives as Americans. In a country that spends 18 percent of its GDP on health care – twice as much as any other nation - quality health care should not be a luxury, but rather a reality for every citizen. The ACA has also been an engine of job creation in communities across the country. As the philosopher Ralph Waldo Emerson once wrote, “the first wealth is health.” To secure a healthier future for all Americans, we must work together to safeguard the Affordable Care Act today and strengthen it in the months and years ahead.
Rear Admiral Susan J. Blumenthal, M.D., M.P.A. (ret.) is the Public Health Editor of the Huffington Post. She is a Senior Fellow in Health Policy at New America, a Clinical Professor at Tufts and Georgetown University Schools of Medicine, and Senior Policy and Medical Advisor at amfAR, The Foundation for AIDS Research. Dr. Blumenthal served for more than 20 years in senior health leadership positions in the Federal government in the Administrations of four U.S. Presidents including as the first Deputy Assistant Secretary of Women’s Health, Assistant Surgeon General of the United States, and as Senior Global Health Advisor in the U.S. Department of Health and Human Services. She also was a White House Advisor on health. Prior to these positions, Dr. Blumenthal served as Chief of the Behavioral Medicine and Basic Prevention Research Branch and Chair of the Health and Behavior Coordinating Committee at the National Institutes of Health (NIH). She has chaired numerous national and global commissions and conferences and is the author of many scientific publications. Admiral Blumenthal has received awards including honorary doctorates and has been decorated with the highest medals of the U.S. Public Health Service for her pioneering leadership and landmark contributions to advancing health in the United States and worldwide. Named by the New York Times, the National Library of Medicine and the Medical Herald as one of the most influential women in medicine, Dr. Blumenthal was named the 2009 Health Leader of the Year by the Commissioned Officers Association and as a Rock Star of Science by the Geoffrey Beene Foundation. She is the recipient of the Rosalind Franklin Centennial Life in Discovery Award.
Alexis Boaz is a third year Juris Doctor and Master of Public Health candidate at The George Washington University Law School and The George Washington University Milken Institute of Public Health. Alexis is a former White House Intern for the Obama Administration, a Health Policy Fellow with the U.S. House of Representatives, and a Health Policy Intern with the U.S. Senate. Alexis has held several health policy internship positions in D.C., including interning in three different offices within the U.S. Department of Health and Human Services. Alexis Boaz was a Graduate Health Policy Intern at New America in Washington D.C. during the Spring of 2017. Alexis graduated with a Bachelors of Science in Health Care Management and Policy from Georgetown University’s School of Nursing and Health Studies in 2015.