Yesterday, two Republican senators who have been most vocal about the dangers of repealing the ACA without replacement, Bill Cassidy of Louisiana and Susan Collins of Maine, introduced a "replacement" bill that looks something like the compromise envisioned by many healthcare wonks, giving states the freedom to accept or redesign the core ACA benefit structure. Senators Shelley Moore Capito, R-WV, and Johnny Isakson, R-GA, are co-sponsors. Vitally, it does not repeal the taxes that fund ACA benefits. Full text is here; a one page summary, here
The plan is offspring of a bill Cassidy introduced in 2015*, when the possibility loomed that the Supreme Court would rule for the plaintiffs in King v. Burwell and ban the federal exchange HealthCare.gov, from granting premium subsidies. It allows states to either keep their ACA marketplace as is, or opt for a conservative alternative based on subsidized Health Savings Accounts (HSAs) and catastrophic plans offered in a deregulated market. It also leaves intact the ACA's "innovation waivers" allowing states to cook up their own coverage schemes to deploy comparable dollars to cover comparable numbers of people. A Republican HHS would presumably be disposed to wave through such alternative schemes if they have a conservative cast.
The bill's HSA-based alternative is convoluted and leaves a lot of question marks, particularly whether and the extent to which (some?) people in employer-sponsored plans get HSA contributions. One worry: since the initial grant amounts for states opting for the HSA option are based on what they would have received under the ACA, how will the grant amounts evolve/grow over time? Loren Adler of Brookings, whose storified tweets give an excellent overview of the bill and its lacuna, worries (in subsequent tweets) that the funding provisions may constitute a kind of poison pill:
In fact, the law's preferred alternative plan is an incoherent mess of probably unworkable provisions: auto-enrolling people who lose coverage in plans in which HSA grants based on age, income, and region match their premiums; stretching a subsidi pot originally designed for people in the 139-400% FPL range (topping out at $47,520 solo for this year) to $150k individual/$250k couple, possibly including some or all of those in employer-sponsored plans; basing state funding, apparently forever, on alt-universe ACA funding. Timothy Jost, who summarizes all such initiatives for Health Affairs,will doubtless documents these flaws and ambiguities.
No matter. In my view, Democrats in the Senate in particular should make polite noises about how this proposal opens a basis for discussion. If nothing else, it gives cover to the dozen-plus Republican senators who have expressed qualms about passing a repeal-and-delay via budget reconciliation (including sponsors Cassidy, Collins and Capito, if not Isakson) to hold out against such insta-repeal. In addition, it has these relative virtues, which no other Republican proposal is likely to share:
If not, here's perhaps an optimal scenario from a Democratic/progressive standpoint. Senate Democrats cautiously welcome this obviously rough draft. It becomes the basis for a mammoth negotiation, like the 2013 immigration reform bill. Like that bill, it passes the Senate many months from now; meanwhile, Congress and the administration take steps to shore up, or at least not destroy, the ACA marketplace for 2018. Then the House rejects the bill, as leadership refuses to allow a floor vote, and everyone retreats to their corners to arm themselves for the 2018 midterms. The ACA marketplace chugs along for another three years at least while everyone awaits results of the midterm elections and starts over in 2019. And the Medicaid expansion continues undisturbed.
I can't pretend that this scenario is likely; for one thing, patience is not Trump's virtue, and Price doubtless considers this plan ridiculously anodyne. But it is at least possible that insta-repeal will stall in the Senate, and that this relatively moderate bill will contribute to that outcome.
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* Cassidy sponsored a second replacement bill last year, from which the new release borrows some features.
For a sympathetic read of Cassidy's 2015 bill from progressive healthcare policy analyst David Anderson of Duke (f.k.a. Richard Mayhew of unnamed health insurer), see here.
The plan is offspring of a bill Cassidy introduced in 2015*, when the possibility loomed that the Supreme Court would rule for the plaintiffs in King v. Burwell and ban the federal exchange HealthCare.gov, from granting premium subsidies. It allows states to either keep their ACA marketplace as is, or opt for a conservative alternative based on subsidized Health Savings Accounts (HSAs) and catastrophic plans offered in a deregulated market. It also leaves intact the ACA's "innovation waivers" allowing states to cook up their own coverage schemes to deploy comparable dollars to cover comparable numbers of people. A Republican HHS would presumably be disposed to wave through such alternative schemes if they have a conservative cast.
The bill's HSA-based alternative is convoluted and leaves a lot of question marks, particularly whether and the extent to which (some?) people in employer-sponsored plans get HSA contributions. One worry: since the initial grant amounts for states opting for the HSA option are based on what they would have received under the ACA, how will the grant amounts evolve/grow over time? Loren Adler of Brookings, whose storified tweets give an excellent overview of the bill and its lacuna, worries (in subsequent tweets) that the funding provisions may constitute a kind of poison pill:
The bill also gives HHS Secretary tremendous power to set a state's funding level, especially over time, which could go in either direction
Not only can state funding can be ↑ or ↓ by Secretary, but there appears room to do it selectively to reward or punish a specific state
In fact, the law's preferred alternative plan is an incoherent mess of probably unworkable provisions: auto-enrolling people who lose coverage in plans in which HSA grants based on age, income, and region match their premiums; stretching a subsidi pot originally designed for people in the 139-400% FPL range (topping out at $47,520 solo for this year) to $150k individual/$250k couple, possibly including some or all of those in employer-sponsored plans; basing state funding, apparently forever, on alt-universe ACA funding. Timothy Jost, who summarizes all such initiatives for Health Affairs,
No matter. In my view, Democrats in the Senate in particular should make polite noises about how this proposal opens a basis for discussion. If nothing else, it gives cover to the dozen-plus Republican senators who have expressed qualms about passing a repeal-and-delay via budget reconciliation (including sponsors Cassidy, Collins and Capito, if not Isakson) to hold out against such insta-repeal. In addition, it has these relative virtues, which no other Republican proposal is likely to share:
- It does not repeal the ACA in toto, or anywhere near as sweepingly as the repeal-and-delay legislation currently in progress. States that like their current marketplace can keep it more or less as is, with a 5% funding haircut.
- It leaves the Medicaid expansion intact, though states can use Medicaid money differently, e.g., to fund HSAs for those who would qualify.
- It does not repeal the taxes that largely fund ACA benefits, except for revenue from the individual and employer mandates in states that opt for its new alternative to the marketplace.
- It does not repeal the ACA's payment cuts to providers and insurers in Medicare, which also fund ACA benefits (and slow growth in Medicare spending).
- While it puts forward a rather bizarre template for states that want to test Republican shibboleths centered on HSAs, it also preservers the ACA's innovation waivers for states. In other words, it basically broadcasts and models state options already inherent in the law, while privileging one direction to take those options (and easing the path to killing the bulk of the ACA's coverage rules).
If not, here's perhaps an optimal scenario from a Democratic/progressive standpoint. Senate Democrats cautiously welcome this obviously rough draft. It becomes the basis for a mammoth negotiation, like the 2013 immigration reform bill. Like that bill, it passes the Senate many months from now; meanwhile, Congress and the administration take steps to shore up, or at least not destroy, the ACA marketplace for 2018. Then the House rejects the bill, as leadership refuses to allow a floor vote, and everyone retreats to their corners to arm themselves for the 2018 midterms. The ACA marketplace chugs along for another three years at least while everyone awaits results of the midterm elections and starts over in 2019. And the Medicaid expansion continues undisturbed.
I can't pretend that this scenario is likely; for one thing, patience is not Trump's virtue, and Price doubtless considers this plan ridiculously anodyne. But it is at least possible that insta-repeal will stall in the Senate, and that this relatively moderate bill will contribute to that outcome.
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* Cassidy sponsored a second replacement bill last year, from which the new release borrows some features.
For a sympathetic read of Cassidy's 2015 bill from progressive healthcare policy analyst David Anderson of Duke (f.k.a. Richard Mayhew of unnamed health insurer), see here.
It seems like maybe the funding would actually be higher than states are currently receiving... The summary page says "Each State will receive the same level of funding it would have received under the ACA *if 95% of those eligible for subsidies enrolled*" But most states currently have a lot less than 95 percent of their subsidy-eligible residents enrolled.
ReplyDeleteThe text of the bill says "95 percent of the Secretary’s estimate of the total payments that would have been made (assuming the existence of a State established Exchange in the State) under section 36B of the Internal Revenue Code of 1986 and under section 1402 of PPACA with respect to all qualified residents in the State in the year." The part about "all qualified residents in the state" seems to confirm what's in the summary.
Am I missing something here?
I noticed that too, Louise. But the "all qualified residents" language in the actual text seemed an echo of ACA provisions disputed in King v. Burwell, and I assumed that it didn't mean "if all qualified residents enrolled," probably just because that seemed improbable. "With respect to" is a weak link. But intriguing!
DeleteI have been following the Cassidy plans for some time. They are endorsed by Dr John Goodman who is in my view the best of the conservatives. (Not a tough competition perhaps)
ReplyDeleteAnyways my point is that Cassidy's plans have been VERY vague about the total costs of what he is proposing.
I read through one of them thinking oh, this might work, and then read that to pay for it every dollar of employer paid premiums would have to be taxed. Whoops!