Race is on to pass Senate healthcare bill despite industry opposition
Healthcare providers and insurers had differing reactions to the Senate Republican bill unveiled last week to repeal and replace the Affordable Care Act. The “discussion draft” bombed with healthcare providers, while some insurers reveled at the offering of cost-sharing reduction payments and tens of billions in temporary reinsurance funding.
But it may not matter what industry stakeholders think. They say GOP lawmakers didn’t ask for their input. “I’ve never seen anything so rushed or secretive,” said Dr. Bruce Siegel, CEO of America’s Essential Hospitals, which represents 300 safety-net systems.
Providers warn the Better Care Reconciliation Act of 2017 would devastate their finances and prevent them from providing quality healthcare. And they almost immediately took action.
Tenet Healthcare Corp. emailed its 130,000 employees, urging them to call their senators to oppose the bill.
Ascension CEO Anthony Tersigni noted that in 2016 his not-for-profit health system provided $1.8 billion in charity care and community benefit. “I suspect that number will go up because you’re going to have millions of people who lose their insurance, and they’re going to show up in the ER. It’ll impact us negatively by hundreds of millions of dollars.”
The American Hospital Association and Federation of American Hospitals are urging Senate Republicans to start over. But Senate Majority Leader Mitch McConnell wants to bring the bill to a vote this week, shortly after the Congressional Budget Office issues its estimate of the bill’s cost and coverage impact. McConnell needs the votes of 50 of his 52 caucus members to pass it. Some moderate and conservative Republicans are hedging.
Ohio GOP Sen. Rob Portman, for one, worries that Medicaid cuts would slash drug addiction treatment during an opioid epidemic. Nevada’s Dean Heller said he can’t support the current bill.
If the Senate passes it, the bill goes back to the House, where its prospects are uncertain.
Most healthcare industry leaders expressed fear and anger over the bill.
“The BCRA moves in a dangerous and harmful direction for poor, aged and disabled Americans and the health plans and providers that serve them,” said Margaret Murray, CEO of the Association for Community Affiliated Plans. She complained that the bill would repeal the ACA’s tax penalty for not buying insurance without an alternative mechanism for prodding younger, healthier people to buy coverage. That could cause a “death spiral” in the individual insurance market, she warned. America’s Health Insurance Plans and the Blue Cross and Blue Shield Association were silent last week.
The bill—which McConnell is expected to revise this week to meet concerns raised by GOP senators— would cap federal payments to the states for most beneficiaries at the medical component of the Consumer Price Index starting in 2020. Those payments would grow even more slowly after 2025.
Tax credits for people to buy individual insurance would be limited to those with incomes up to 350% of the poverty level, below the ACA’s 400% cut-off. The credits would be pegged to age, income and local premiums.
The credits would be based on the price of plans covering just 58% of medical costs, compared with 70% under the ACA. The bill would end the ACA’s cost-sharing subsidies for lower-income enrollees. Plans could also charge older people five times as much as younger enrollees, compared to a 3-to-1 limit under the ACA. That means consumers, particularly people ages 50 to 64, would pay much more out of pocket.
The ACA’s enhanced federal payments for Medicaid expansion would be phased out from 2021 to 2023. That would likely cause 31 states that expanded Medicaid to end that coverage. Phasing out expansion funding would come on top of caps in federal Medicaid payments to the states that the
CBO said would hold spending growth below actual per capita costs.
The bill also would encourage states to opt out of ACA essential benefit requirements, such as maternity care, cancer screening, mental health and addiction treatment, and prescription drugs.
“The BCRA creates a backdoor way for insurers to offer less generous coverage to fewer people and to make coverage unaffordable for patients with pre-existing conditions,” said Dr. Jack Ende, president of the American College of Physicians.
Insurers celebrated the bill’s provision of $112 billion for reinsurance and market stabilization measures, which would end after 10 years. They also cheered the elimination of the ACA’s requirement that plans spend at least 80% of premium revenue on medical care.
Insurers especially liked that cost-sharing reduction payments to help low-income enrollees afford deductibles and copayments would continue for two years.
Ceci Connolly, CEO of the Alliance of Community Health Plans, which rep- resents not-for-profit insurers, said that move offered some market certainty.
But Bernard Tyson, CEO of Kaiser Permanente, a member of Connolly’s group, panned the Senate bill.
“We are now at risk of losing ground in building the American healthcare system we deserve,” he wrote. “Racing to reform healthcare without offering a workable alternative with broad national support is not the way to go.”