What comes af­ter Oba­macare?

Baltimore Sun - - COMMENTARY - By Robert A. Free­man Robert A. Free­man is a pro­fes­sor and vice chair of re­search at the Univer­sity of Mary­land East­ern Shore School of Phar­macy & Health Pro­fes­sions; his email is rafree­man@umes.edu.

Over the next few months Re­pub­li­cans are ex­pected to re­peal Pres­i­dent Barack Obama’s sig­na­ture leg­is­la­tion, the Af­ford­able Care Act (ACA). How this plays out is un­known be­cause there are two path­ways by which the law can be re­pealed. First, the law can be re­pealed or sig­nif­i­cantly changed by the pas­sage of a bill that the new pres­i­dent can sign into law. Sec­ond, it can be sig­nif­i­cantly changed through the bud­get rec­on­cil­i­a­tion process, which re­quires a sim­ple ma­jor­ity vote in the Se­nate and pro­hibits a fil­i­buster. Fur­ther com­pli­cat­ing mat­ters is that we don’t know what ex­actly the Re­pub­li­cans will pro­pose as a re­place­ment, so the tim­ing of the re­peal may be tied to the in­tro­duc­tion of a new re­form bill.

Re­gard­ing the first op­tion, Se­nate Democrats will fil­i­buster any bill that would re­peal the ACA. The Re­pub­li­cans will have to find enough votes from Demo­cratic sen­a­tors to break the fil­i­buster, and that is un­likely. The sec­ond op­tion is more ar­cane to the gen­eral public and re­quires only a sim­ple ma­jor­ity vote in both houses. This ac­tion would re­peal those parts of the ACA that are linked to the fed­eral bud­get. The House Re­pub­li­cans have tried to re­peal the ACA more than 60 times, and the Se­nate only once — and that was un­der the bud­get rec­on­cil­i­a­tion process. If the Se­nate’s ver­sion of the bill that passed last year is the model go­ing for­ward, one can ex­pect pre­mium sub­si­dies to end as well as halt­ing ex­pan­sion of Med­i­caid pro­grams to cover the pre­vi­ously unin­sured.

Com­pli­cat­ing the is­sue still fur­ther is the fact that the ACA changed Medi­care by re­duc­ing re­im­burse­ments to health care providers and hos­pi­tals over time, clos­ing and even­tu­ally elim­i­nat­ing the cov­er­age gap un­der the Medi­care Part D pre­scrip­tion drug pro­gram and ini­ti­at­ing pro­grams to elim­i­nate Medi­care fraud and abuse. In ef­fect, the ACA’s mod­i­fi­ca­tion of Medi­care added years of fis­cal sta­bil­ity to the law. It is im­por­tant to re­mem­ber that the ACA is fun­da­men­tally a tax- and deficit-re­duc­tion law, and any sig­nif­i­cant tin­ker­ing of the law via the bud­get rec­on­cil­i­a­tion process has po­ten­tially pro­found un­to­ward ex­ter­nal­i­ties in cor­po­rate and per­sonal tax li­a­bil­ity.

It would be help­ful to know more ex­actly what Pres­i­dent-elect Don­ald Trump’s ac­tual po­si­tions are on what would re­place the ACA. From what lit­tle is known, he would em­brace a mar­ket-based so­lu­tion in­clud­ing re­mov­ing bar­ri­ers to in­ter­state mar­ket­ing of health plans, in­creas­ing reliance on health sav­ings ac­counts that would ac­crue from one year to the next, and re­mov­ing fed­eral over­sight of the Med­i­caid pro­gram by award­ing block grants to the states to run what­ever pro­grams they elect to of­fer. His ini­tial com­ments post-elec­tion might sig­nal a will­ing­ness to keep sem­i­nal pro­vi­sions of the act such as pro­hibit­ing dis­crim­i­na­tion on the ba­sis of pre-ex­ist­ing med­i­cal con­di­tions and al­low­ing the con­tin­u­a­tion of cov­er­age of adult chil­dren un­der their parents’ health plans to age 26. It is less clear what his po­si­tions to­ward Medi­care are — it would ap­pear that he wants to pro­tect en­ti­tle­ments, and that po­si­tion puts him into di­rect con­flict with House Speaker Paul Ryan, who fa­vors cut­backs to Medi­care and So­cial Se­cu­rity that in­clude even pri­va­ti­za­tion.

The bot­tom line is the ACA ex­tended cov­er­age to about 20 mil­lion peo­ple who were pre­vi­ously unin­sured. Elim­i­nat­ing their cov­er­age will re­quire a tran­si­tion pe­riod, and the ef­fect will be felt hard­est by those re­ceiv­ing pre­mium sub­si­dies. It will also have a ma­jor im­pact on health care in­sti­tu­tions and med­i­cal providers that have changed their busi­ness mod­els to ac­count for the ACA. For states like Mary­land that ex­panded Med­i­caid to re­duce the numbers of unin­sured ci­ti­zens, the im­pact on the state bud­get may be se­vere de­pend­ing on how the gover­nor and leg­is­la­ture re­act to de­creased fed­eral fund­ing and its neg­a­tive fi­nan­cial im­pact on hos­pi­tals, clin­ics and other med­i­cal care providers.

As of last year, the De­part­ment of Health and Hu­man Ser­vices re­ported that the per­cent­age of Mary­land res­i­dents who are unin­sured dropped from 12.9 per­cent to 7.8 per­cent and that the state has re­ceived al­most $200 mil­lion in funds re­lated to the ACA’s im­ple­men­ta­tion. These fig­ures alone show the fi­nan­cial im­pact of chang­ing or re­peal­ing and re­plac­ing the cur­rent law. It is time for cam­paign slo­gans to be re­tired and se­ri­ous dis­cus­sions to be­gin on the fu­ture of health re­form in the U.S.

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