CMA Federal Update:
Health Care Reform and MACRA
By Elizabeth McNeil, VP, Federal Government Relations HEALTH CARE REFORM
With the election of Donald Trump to the U.S. Presidency and Republicans in control of both the U.S. House of Representatives and Senate, Republican leaders are moving swiftly to fulfill a cornerstone campaign promise to repeal the Affordable Care Act (ACA).
ACA REPEAL Senate and House Pass a 2017 Budget Resolution Laying the Groundwork for ACA Repeal On Friday, January 13, the House followed the Senate in passing a non-binding budget resolution (S Con Res 3) that sets 2017 spending targets and provides instructions to the Congressional Policy Committees to: 1. Develop a majority-vote Budget Reconciliation bill that repeals the ACA by late February; 2. Achieve savings from the ACA repeal legislation; and 3. Develop an ACA replacement plan. The budget reconciliation bill would repeal the ACA, but it would not take effect for 2-3 years while Congress works on a replacement plan. Under House and Senate rules, Budget Reconciliation bills can only include budgetary items and be adopted by a simple majority vote (rather than the usual 60 votes required for passage in the Senate), thereby circumventing a Senate Democratic-led filibuster.
ACA REPLACEMENT PLAN Previous bills introduced by House Speaker Paul Ryan, U.S. Department of Health and Human Services (HHS) Secretary nominee Tom Price, MD and Senate Finance Committee Chairman Orrin Hatch provide insight into the potential health care reform legislation that will replace the ACA. As previously written, none of these proposals provide as much coverage as the ACA. Instead, the proposals only repeal the ACA insurance provisions, individual mandate and Medicaid expansion for low-income 14 | THE BULLETIN | JANUARY / FEBRUARY 2017
adults. They replace the ACA with a private, voluntary health insurance marketplace where insurers may sell insurance across state lines. It is unclear how the individual market would successfully operate. Some bills allow states to establish high-risk pools and expand Health Savings Accounts. Most provide tax credits, and some provide subsidies to help low-income families afford coverage. Several bills allow individuals to deduct the cost of health insurance premiums while eliminating such deductions for employer-sponsored coverage. Most bills repeal the ACA insurance reforms, such as the requirements for insurers to dedicate 85 percent of revenues to patient care and to provide coverage to those with pre-existing conditions. All of the bills eliminate the Medicaid expansion and cap federal funding for Medicaid either through block grants or per capita cap funding in exchange for greater state flexibility. Speaker Ryan’s bill replaces the Medicare defined benefit program with Medicare premium support that provides vouchers to seniors to purchase private health insurance coverage. And finally, several proposals include MICRA-like medical liability reform. Regardless of previous health care reform proposals, the Republican leadership recognizes that a more comprehensive approach is warranted, and they plan to take more time to develop a replacement plan. They have also reached out to state governors and insurance commissioners for their input on the ACA, Medicaid Expansion and Exchanges. Sixteen Republican governors and fourteen Democratic governors expanded their Medicaid programs, and the majority of these governors are asking Congress to maintain the Medicaid funding. Finally, the ACA replacement legislation will require 60 votes in the Senate. Therefore, Republican leaders will need to compromise with at least a handful of Democrats to gain final passage.
CMA ADVOCACY CMA is actively involved in shaping the future of health care reform at the national level and has extensive policy on health care reform issues. Based on that policy, CMA’s overriding goal will be to ensure that Californians who have coverage today do not lose coverage or