The bulk of the Affordable Care Act (ACA) has survived the latest Republican efforts to repeal it, as Senate leaders were forced to admit Tuesday their best chance to fulfill years of campaign promises to gut the law has floundered.
The Senate plan to replace the ACA sank Tuesday night when the total number of Republicans opposing the bill rose to four. Republican Senate Leader Mitch McConnell immediately pivoted to an effort to repeal the ACA without a replacement plan. Only hours later, however, that plan also became unrealistic, as moderate Republicans said such a move would be too risky and they would not vote for it.
Industry groups were happy with the news. Scores of policy experts and healthcare professionals had railed against both the Senate and House bills to replace the ACA. Congressional Budget Office estimates found they would take away health insurance coverage for more than 20 million people. Both proposals also drastically cut Medicaid and eliminated protections for people with pre-existing conditions.
Millions more uninsured would have caused a hefty increase in uncompensated care costs for hospitals. The Commonwealth Fund estimated both replacement bills would have meant nearly a million healthcare jobs lost by 2026.
The industry may have dodged a bullet, but this week’s legislative stumbles for the GOP don’t mean healthcare will be off the table in Congress. Here's what to watch.
Stabilizing the individual market
The most immediate concern for payers with ACA repeal out of the picture is cost-sharing reduction (CSR) payments and the stabilization of the individual market. McConnell has said legislation to help shore up the market would be needed if the Senate's Better Care and Reconciliation Act (BCRA) failed. But at least one lawmaker — Senate Majority Whip John Cornyn — said Tuesday he would "not be part of any bailout of insurance companies.”
President Donald Trump said Tuesday that Republicans should "let Obamacare fail" and pin the blame on Democrats. This would likely mean withholding CSRs, a position Trump has repeatedly advocated.
CSRs are meant to help insurers pay for beneficiaries with more care needs and therefore higher costs. They help payers keep a balanced risk pool. Congress and the White House have so far refused to commit to the payments for next year, and insurance companies pulling out of the ACA exchange markets have cited that inaction as a major reason for withdrawal.
The Trump administration still has to decide whether to continue defending a lawsuit against the White House from House Republicans claiming the Obama administration was paying the CSRs without proper appropriation. Payers are hoping Republicans agree to commit to future CSRs with a clearly above-board fund.
Republicans who balk at the CSRs may try to push their own ideas for how to stabilize the market. They have previously proposed changing the age band to allow insurers to charge older people more and tightening requirements for special enrollment periods. The BCRA included $112 billion to help payers stabilize the market, but that funding lasted only two years and assumed the other numerous changes the BCRA called for would go into effect.
Payers would much prefer a commitment to funding CSRs with a clearly above-board fund. That would certainly help steady the ACA marketplaces, but Republican rhetoric about the markets’ “death spiral” is overblown. The CBO has said the individual market would remain stable in most areas under current law, and a Kaiser Family Foundation report showed that payers are regaining profitability in the market while stability is increasing.
The White House will likely be making its own plans in case efforts in Congress fall through.
Trump has said very little about healthcare policy during his time in office. Other than a few tweets, Trump didn't participate in vote-wrangling for the ACA replacement bills and didn't make much use of his bully pulpit.
He held a celebratory press conference in the Rose Garden when the House passed its ACA replacement bill and also supported the BCRA. When the Senate bill failed, he immediately called for a repeal without replacement, but the administration didn't elaborate on when a replacement might come or what it would look like.
Trump has already issued one major executive order on healthcare. Immediately after taking office, he told federal agencies to “exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay any provision or requirement that of the Act that would impose a fiscal burden on any state or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, purchasers of health insurance, or makers of medical devices, products, or medication.”
The IRS under Trump is still technically enforcing the individual mandate, although it also accepted tax returns that don’t indicate whether the filer has health insurance. With the failure to replace the ACA in Congress, Trump could push for complete abandonment of the requirement. Without the mandate, healthy people who don’t need much care would be less likely to get coverage and risk pools would become more unstable.
HHS has already indicated it will allow more state waivers under the ACA, letting states dictate what benefits are required and how people qualify for Medicaid. Conservative states have started planning waiver applications with aspects like a requirement that Medicaid beneficiaries have a job.
The administration could also weaken the ACA by refusing to publicize it. Immediately after Trump took office, the government scaled back advertising for the ACA open enrollment period. This led to fewer signups in the typically busy final days of enrollment. Without a push for young and healthy people to enroll, risk pools could again get off balance.
It hasn't meant much yet, but with repeal off the table for now, the administration could push for more use of the order. Executive action could be tricky, however, as HHS remains understaffed.
Although Republicans and Democrats are far apart on nearly every aspect of healthcare reform, they could find that working together is their only chance of getting anything passed.
One jumping off point could be the bill put forward earlier this year by two of the more moderate Senate Republicans. It would repeal the individual and federal mandates as well as essential health benefits, but keep some aspects of the ACA, like a ban on coverage caps. It would also allow states to implement their own alternative plans, possibly with federal assistance.
Giving more control to state governments — a tactic embraced by HHS Secretary Tom Price — appeals to the left in some ways, but Democrats and patient advocates will oppose any weakening of protections for people with pre-existing and chronic conditions. Republican plans that throw out coverage mandates cannot guarantee such protections because they can easily create unbalanced risk pools.
One initiative that has nearly universal support is MACRA, as well as the movement toward value-based care in general. As providers deal with implementing MACRA payment model changes, Congress may be asked to make some tweaks or delays.
It’s unlikely any major healthcare changes in the near future will be bipartisan, but lawmakers willing to reach across the aisle could try to tackle some smaller issues.
Another chance to pass healthcare legislation will come at the end of September when the Children’s Health Insurance Program (CHIP) is set to expire. Lawmakers want to ensure the program continues, but may also see it as a possible vehicle for other bills. Republicans have already delayed hearings on renewing CHIP as they’ve debated how to move forward on healthcare changes.
This could be the route for a bill to stabilize the individual market. Republicans and Democrats may try to use this opportunity to push through other changes, but any delay that threatens the continuation of CHIP will be heavily criticized.