HRI regulatory center

On May 4, House Republicans passed the American Health Care Act (AHCA), which aims to partially repeal and replace the Affordable Care Act (ACA). As passed by the House, the AHCA would repeal $663 billion in ACA taxes and fees over 10 years, phase out the ACA’s expansion of the Medicaid program, cap federal Medicaid funding and cut it by $834 billion over 10 years, replace the ACA’s income-based premium tax credits and other subsidies with age-based ones, and give states flexibility to opt out of key ACA provisions (see Figure 1), according to analyses by the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT). All told, 23 million fewer people likely would have insurance by 2026 compared with current law, according to the analyses. 

Read HRI’s spotlight, Trump administration health policy agenda: House passes the American Health Care Act

Highlights – July 10, 2017

Senate Republicans today released an updated draft of the Better Care Reconciliation Act of 2017 (BCRA)—their legislation to repeal major components of the Affordable Care Act (ACA) and replace them with reforms meant to cut taxes, slow Medicaid growth and reduce insurance premiums for some. The legislative text is substantially similar to the lawmakers’ first version of the BCRA, released in late June, and the American Health Care Act, which passed the House of Representatives in May.

Like the Senate’s previous version, the new draft rolls back federal funding of the ACA Medicaid expansion starting in 2021; switches Medicaid to a per capita or block grant system, also starting in 2021; and allows greater flexibility in insurance plans. The bill incorporates a version of an amendment proposed by Sens. Ted Cruz, R-Texas, and Mike Lee, R-Utah, that would allow insurers to sell low-cost, low-benefit plans as long as they sell gold- and silver-level plans on the ACA exchanges. It also includes $115 billion in additional spending for opioid abuse treatment and other state-based insurance reforms. The bill retains several key ACA taxes, including the net investment income tax, the medical health insurance tax and the tax on executive compensation for health insurance executives. The bill reduces the individual and employer mandate penalties to $0 but requires individuals with a break in insurance coverage to wait six months before getting new coverage.

Just before the updated bill’s release, Sens. Bill Cassidy, R-La., and Lindsey Graham, R-S.C., announced on CNN that they would release their own healthcare proposal. They said their legislation would redirect funds raised by ACA taxes directly to states, with flexibility to spend the money as they wish. As of Thursday evening, the fate of the Senate health reform effort remained unclear.

HRI impact analysis: The Congressional Budget Office (CBO) expects to release a score for the updated bill Monday. The Senate may vote on the BCRA as early as next week, however the bill must clear several potentially significant hurdles first, including a decision from the Senate Parliamentarian on whether key provisions can be considered under reconciliation. It is unclear whether the bill has enough votes to pass; Republicans can lose no more than two votes with Vice President Mike Pence casting a tie-breaking vote. If the bill passes the Senate, it must either pass the House unedited or go to a conference committee in which House and Senate members reconcile the two bills’ differences and come up with a compromise that can pass both the House and Senate. The CBO previously indicated that the earlier Senate version would result in 22 million fewer Americans with health insurance over the next decade, slightly better than the 23 million under the House-passed version. It also found that the previous Senate bill would decrease federal Medicaid spending by $772 billion, or 26 percent, over 10 years. The report also estimated that insurance premiums could increase as fewer healthy people buy insurance, resulting in sicker—and costlier—insurance risk pools. HRI’s analysis of scenarios for repealing and replacing the ACA found that healthcare providers in particular, and consumers, would bear the brunt of legislation similar to the BCRA. Many providers, payers, consumer advocates and others have come out against the earlier version of the Senate bill in recent weeks.

Trump administration: 38 US counties at risk of having no insurers participating in ACA exchanges in the fall

A Kaiser Family Foundation analysis found that 25,000 people in 38 US counties in Indiana, Nevada and Ohio likely will have no choices of plans on the state ACA exchanges for the next open enrollment season. While some medium-sized cities such as Marion, Ind., and Carson City, Nev., may be affected, the majority of counties are largely rural, particularly in the eastern and southern parts of Ohio. In Nevada, all but three counties—Clark County, home of Las Vegas; Washoe County, home of Reno; and Nye County—could be at risk. Many of the at-risk counties had only one insurer for the previous open enrollment period. While Kaiser’s analysis found that all at-risk counties are in nonmetropolitan areas, an HRI analysis this year found that consumers in 16 metropolitan markets could find themselves in similar circumstances if an additional national insurer declines participation. 

Highlights – June 26, 2017

Trump administration: CBO says Senate health reform bill would lead to 22 million more uninsured
The Congressional Budget Office (CBO) analysis this week of the Senate’s Better Care Reconciliation Act (BCRA) showed that the new healthcare bill would lead to 22 million fewer Americans with health insurance over the next decade compared with current projections under the ACA. It also found that the bill would decrease federal Medicaid spending by $772 billion, or 26 percent, over the next decade and reduce the number of Medicaid enrollees by 15 million more than current projections. The report also estimates that insurance premiums could increase as fewer healthy people purchase insurance, resulting in sicker—and costlier—insurance risk pools. Premiums would decrease in the long term, but only if insurance plans cut benefits, the CBO found. Senate Majority Leader Mitch McConnell (R-KY) has postponed a vote on the bill until after July 9.

HRI impact analysis: The CBO’s score of the BCRA is similar to its scoring of the American Health Care Act, the bill that the House of Representatives approved in May, which was expected to result in 23 million fewer insured Americans over the next decade. As healthcare companies prepare for the potential passage of either bill, they should consider, among other things, how reform could affect different customer segments. For example, the CBO found that certain groups—namely the elderly and the poor—would fare negatively under the bills, and that state efforts to reform insurance could disrupt some existing protections, such as lifetime financial limits on care or certain essential health benefits.

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

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

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

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

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