HRI regulatory center

Regulatory and legislative updates and analysis


President Donald Trump: The latest healthcare developments

Comprehensive report: Health reform 2.0: A guide to developing resilience amid an uncertain future for the Affordable Care Act

President Donald Trump and Republican congressional leadership have promised to repeal and replace the Affordable Care Act (ACA). Just how that will happen remains unclear. For the nation’s healthcare providers, payers, pharmaceutical and life sciences companies, new entrants and employers, this uncertainty makes planning for the future a complicated matter. In this report, PwC’s Health Research Institute and the firm’s strategy practice, Strategy&, present a comprehensive analysis of scenarios for repealing and replacing the ACA, along with practical steps health organizations can take in this time of uncertainty. 

Read HRI and Strategy&'s report, Health reform: 2.0: A guide to developing resilience amid an uncertain future for the Affordable Care Act

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Guide to the American Health Care Act

On May 4, House Republicans voted to pass the American Health Care Act (AHCA), legislation aimed at repealing and replacing provisions of the Affordable Care Act (ACA). The AHCA repeals most of the ACA’s taxes and fees, phases out the ACA’s expansion of the Medicaid program, caps federal funding of Medicaid, replaces the ACA’s income-based premium tax credits with age-based ones meant to help Americans buy coverage, and gives states flexibility to determine which benefits must be offered under insurance coverage.

Read HRI’s spotlight, House passes American Health Care Act

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Trump administration weekly highlights

Highlights – May 15, 2017

Trump administration: Maine and Wisconsin propose innovation waivers that bring cost-sharing, work requirements, drug testing and other measures to Medicaid
Maine and Wisconsin expect Medicaid enrollments to decrease by up to 3 percent by 2022 if the innovation waivers they are seeking are approved and implemented. Both states are seeking Section 1115 waivers, which give states flexibility to test new ways of operating their Medicaid programs. Wisconsin and Maine want to require cost-sharing for some beneficiaries, including charging premiums based on income and requiring copayments for ER visits. Both states also want to establish benefit time limits on some Medicaid beneficiaries. Maine also would like to require some beneficiaries to work, and Wisconsin is seeking drug testing. The states expect these measures would eventually reduce Medicaid expenditures. Both states are seeking state-level public comment on their proposed waiver applications before the end of the month. Wisconsin announced the state will submit its application to CMS by May 26. As of Thursday, Maine had not announced an application submission date.

HRI impact analysis: The states’ proposals come two months after HHS Secretary Tom Price and CMS Administrator Seema Verma sent a letter to state governors encouraging them to apply for Section 1115 Medicaid waivers. Under the Obama administration, CMS had approved Section 1115 waivers in seven states that expanded Medicaid under the ACA, including Arkansas and Michigan. Maine and Wisconsin would be the first non-expansion states to apply. The Maine and Wisconsin proposals include provisions such as increased premiums similar to those proposed in the Healthy Ohio Program waiver, which was denied under the Obama administration. As states look to challenge Medicaid norms, they might find guidance in the details of Indiana’s waiver—approved during the Obama administration—of which Verma was chief architect. If the Maine and Wisconsin waivers are approved under Verma, the industry could see Medicaid waiver activity accelerate among non-expansion states, along with a proliferation of novel changes to their Medicaid programs.

Highlights – May 8, 2017

Trump administration: Uncertainty clouds ACA exchanges
With a June 21 deadline for participation in the Affordable Care Act (ACA) exchanges looming, insurers still don’t know whether they will receive billions of dollars in disputed payments from the federal government. The legality of ACA cost-sharing reduction (CSR) payments—money paid to insurers to offset low-income ACA silver plan members’ cost-sharing measures—is being challenged in a lawsuit filed by House Republicans during the Obama administration. The Trump administration and House Republicans are scheduled to provide a status update on the lawsuit May 22. The federal government’s legal obligation to make an estimated $8.3 billion in payments to insurers under the ACA risk corridors program also is being challenged in court. The federal government filed an appeal May 4 of a Feb. 9 decision by a Court of Federal Claims judge directing the government to pay $214 million in unpaid risk corridor funds to insurer Moda Health Plan. Of nearly two dozen ongoing risk corridors cases, Moda Health Plan v. U.S. is the only one to win in court, according to Health Affairs.

HRI impact analysis: Ongoing legal uncertainty about risk corridors program funding and CSR payments could influence health insurers’ decision to participate in the ACA exchanges during the next enrollment season, which opens Nov. 1. The uncertainty has already led to casualties: Most of the nonprofit co-ops created to provide ACA coverage have closed, with some citing the federal government’s failure to make risk corridors payments as one reason. Other insurers have announced they will exit certain ACA markets in 2018. In at least one state—Iowa—several counties may be left without any plan options in 2018, according to media accounts. Some regional insurers may capitalize on national insurers’ exit from ACA markets. For those who do participate, uncertainty could affect their 2018 premiums. Maryland’s five remaining exchange market insurers, for example, submitted proposed average rate increases of 18 to 58 percent. The state said it will allow insurers to refile if CSR payments are discontinued.

Trump administration: AHCA could impact employer-based health insurance
The American Health Care Act (AHCA)—the House Republicans’ bill to partially repeal and replace the Affordable Care Act (ACA)—contains provisions that could affect employer coverage. By reducing employer mandate penalties to $0, the AHCA neuters the ACA’s requirement that companies with more than 50 employees offer insurance to those working more than 30 hours per week. The bill also further delays the 40 percent excise tax on high-cost employer-sponsored health plans, known as the “Cadillac tax,” until 2026. Under the AHCA, states also can opt to waive certain ACA consumer protections, allowing them to create their own lists of essential health benefits, charge some consumers nongroup premiums based on health status, and let insurers charge older consumers in the nongroup and small group markets more than five times the premiums they charge younger ones.

HRI impact analysis: Employers would welcome the effective elimination of the penalty associated with the ACA’s employer mandate. Such a change could reduce reporting requirements and remove the threat of financial penalties for noncompliance. Some companies, particularly small employers with slightly more than 50 employees and companies with many low-wage employees, may reduce or drop coverage. Most large employers likely would keep coverage, however. If states win waivers to widen the age-band ratings and charge premiums based on health status, employers could see younger employees drop employer-sponsored coverage for less expensive nongroup health plans, making employers’ risk pools more adverse. With the state waivers, self-insured employers and large group insured plans also would be able to choose which states’ definitions of essential health benefits they would abide by, giving them more flexibility in plan design. Some employers could choose to offer employees lower-cost, “slimmed down” plans. Senate Republicans have announced they will make substantial changes to the bill. But employers can start considering what changes they would make to eligibility requirements and health plan design under different scenarios.

Trump administration: Dr. Scott Gottlieb confirmed as FDA commissioner
The Senate voted 57 to 42 on Tuesday to confirm Dr. Scott Gottlieb as FDA Commissioner. Gottlieb, a physician, comes to the role from the American Enterprise Institute, a conservative-leaning think tank, and New Enterprise Associates, a venture capital firm specializing in technology and healthcare, where he served as a venture partner. Gottlieb previously served as FDA deputy commissioner of medical and scientific affairs under President George W. Bush. He also served on the board of Tolero Pharmaceuticals and as a consultant for Vertex Pharmaceuticals and Bristol-Myers Squibb.

HRI impact analysis: Gottlieb has long been a critic of regulatory barriers that he believes inhibit innovation. He and President Donald Trump have advocated for a more streamlined FDA regulatory approval process. Gottlieb’s views could affect how the agency implements the 21st Century Cures Act of 2016, a key priority in the coming years. He also has commented on other regulatory issues associated with the agency, including those involving lower drug pricesgeneric drug labelingstem cell regulationcomplex generic drug regulation and drug shortages.

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Payers: Trump administration briefs

As the debate over repealing and replacing the Affordable Care Act (ACA) moves to the US Senate, generating considerable uncertainty about the law’s future, health insurers face looming deadlines to participate in the ACA exchanges this fall. Several insurers already have announced they will drop or reduce participation, raising questions about the ACA nongroup market’s health as open enrollment begins Nov. 1.

Read HRI’s spotlight, Trump policy agenda – Exchange participation

 

After President Donald Trump and Republican leaders canceled a vote on the American Health Care Act (AHCA), the world became more complicated for health industry leaders and their consumers. Amid the multiple unknowns, health leaders may be tempted to wait for clarity. But in this atmosphere, it is even more important for organizations to lean into the unknowns and build resiliency. Healthcare companies can make some “no regrets” moves to build resilience amid periods of change and uncertainty.

Read HRI’s spotlight, What’s next for health reform?

 

As they mull the ACA’s fate, Republican lawmakers are weighing four options to replace the individual mandate. Any replacement to the mandate would need to accomplish two goals: encourage sign-ups by healthy enrollees, and discourage voluntary coverage gaps.

Read HRI’s spotlight, Replacing the individual mandate

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Providers: Trump administration briefs

After President Donald Trump and Republican leaders canceled a vote on the American Health Care Act (AHCA), the world became more complicated for health industry leaders and their consumers. Amid the multiple unknowns, health leaders may be tempted to wait for clarity. But in this atmosphere, it is even more important for organizations to lean into the unknowns and build resiliency. Healthcare companies can make some “no regrets” moves to build resilience amid periods of change and uncertainty.

Read HRI’s spotlight, What’s next for health reform?

 

The American Health Care Act (AHCA) aims to partially repeal and replace the ACA, by phasing out the ACA’s Medicaid expansion and capping federal funding for the program, among other things. Under the AHCA’s Medicaid plans, healthcare providers could experience a gradual increase in uncompensated care, cuts in Medicaid reimbursement rates, or both.

Read HRI’s spotlight, Implications of phasing out Medicaid expansion


Republican lawmakers are promoting Medicaid block grants as a way to control federal healthcare spending. Providers can expect a shift from an entitlement to a free market Medicaid approach, along with a possible rise in the uninsured population or decrease in reimbursement.

Read HRI’s spotlight, Medicaid block grants and per capita funding

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Pharma and life sciences companies: Trump administration briefs

As the US tax and trade reform debate continues, pharmaceutical and life sciences companies should waste no time in evaluating how different provisions would affect their business operations. Companies should model how these proposed changes could affect manufacturing and supply chains, locations of intellectual property (IP) holdings, unremitted earnings held overseas and planned capital expenditures.

Read HRI’s spotlight, Creating a pharmaceutical supply chain and business strategy amid tax and trade reform uncertainties


After President Donald Trump and Republican leaders canceled a vote on the American Health Care Act (AHCA), the world became more complicated for health industry leaders and their consumers. Amid the multiple unknowns, health leaders may be tempted to wait for clarity. But in this atmosphere, it is even more important for organizations to lean into the unknowns and build resiliency. Healthcare companies can make some “no regrets” moves to build resilience amid periods of change and uncertainty.

Read HRI’s spotlight, What’s next for health reform?

 

President Trump has consistently argued for lower prescription drug prices, but no specific plan has emerged from the White House. Pharmaceutical and life sciences companies are beginning to take steps to increase drug price transparency, limit price increases and explore novel approaches to demonstrate the pharmacoeconomic value of medicine, in light of pressure from all sides to justify pricing decisions.

Read HRI’s spotlight, Preparing for new drug-pricing risks


Tax proposals from the Trump administration could result in pharmaceutical, medical device and medical equipment companies restructuring their supply chains, repatriating overseas capital, and moving manufacturing back to the US. Such reforms, though, pose a sharp deviation from current global operational structures and thus could take years to be fully realized.

Read HRI’s spotlight, Tax reform proposals could impact pharma, medical device and equipment supply chains

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Health industry strategy: Trump administration briefs

Healthcare reform efforts by Congress will create challenges and opportunities that may require changes in operating models across the US healthcare industry. As the legislation undergoes debate and negotiation in Congress, healthcare organizations face considerable uncertainty. Organizations that have developed enterprise resilience—the ability to adapt the business model to change, anticipate disruption and recognize opportunities to generate a competitive advantage—may be best positioned to survive and thrive in these conditions.

Read HRI’s spotlight, Developing enterprise resilience in the face of health reform

 

The inaugural festivities are over, the revelers have gone home, and President Donald Trump has moved into the White House. With so much change in the air, what actions can health organizations take today?

Read HRI's spotlight, (Some) change is coming to healthcare

 

As the American Health Care Act (AHCA) bill makes its way through the legislative process, the nation’s healthcare industry is left to contend with considerable uncertainty. However, there are concrete steps healthcare stakeholders can take in the whirl of uncertainty to help build resilience no matter what specific policy provisions are enacted.

Read Strategy&’s article, Why Healthcare Companies Need to Focus on Enterprise Resilience

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2016 election insights and analysis

Like a chief executive hired to turn a failing company into a profitable one, president-elect Trump has said he will take an unflinching corporate approach to overhauling the US healthcare system. For an industry that prefers stability to surprises--and one that has worked to adapt to the Affordable Care Act—Trump’s “repeal and replace” agenda may create new uncertainty and opportunity for healthcare leaders.

Read HRI's report, President-elect Donald Trump: Turnaround time

 

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About the center

As the US healthcare system continues to undergo transformation, health industries are confronted with an evolving and complicated regulatory environment. With an eye towards how public policy impacts the business of healthcare, the HRI regulatory center serves as a vital resource for executive decision makers who must navigate the changes that lie ahead.

HRI's regulatory center is a group of seasoned professionals that analyze legislative and regulatory policy in Washington and in key states. The group, which focuses on all health sectors, publishes a weekly newsletter and more focused reports that detail the interconnection between Washington and healthcare. The HRI regulatory center calls upon key contacts in government and industry to develop a point of view that is both informative and actionable for health industry leaders.
 

Contact us

Benjamin Isgur
Health Research Institute leader
Tel: +1 (214) 754 5091
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Trine K. Tsouderos
HRI Regulatory Center Leader
Tel: +1 (312) 241 3824
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Alexander Gaffney
Senior Manager, PwC Health Research Institute, Washington
Tel: +1 (202) 414 4309
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