ACA: Next Steps

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With a president-elect on the doorstep of the White House and a Republican majority in Congress both intent on repealing ACA, a cloud of uncertainty hangs over the health-care community.

Observers are weighing in on what can and cannot be done to dismantle the legislation, and others are pointing out that the problems ACA intended to solve—health care costs, limited resources, and access to care—are no less urgent now than eight years ago. Kaiser Health News (KHN) suggests that whatever replaces ACA will look a lot like ACA.

While Republicans did not gain the 60 votes in the Senate necessary to pass most major legislation, the budget reconciliation process, which requires a simple majority and bars filibuster, could be used to repeal targeted segments of the law, KHN reports. A budget bill passed by Congress and blocked by President Obama in 2015 would have repealed the expansion of Medicaid subsidies.

Medicaid expansions, however, have ramifications beyond the federal government and will be difficult to undo. A total of 31 states have expanded eligibility for the program, adding 15.7 million people to the program primarily on the federal dime.

States are expected to resist any attempt to halt federal funding of Medicaid at the state level.

The total Medicaid spend in 2015 was $532 billion, according to KHN, 52% of which was funded by the federal government.

Nonetheless, both Donald Trump and Paul Ryan (R-WI) have vowed to replace Medicaid with block grants to provide health care to low-income people. Under such an arrangement, states would have the flexibility to cut benefits and eligibility.

Likely Tactics

One tactic Trump could deploy to chip away at ACA is to drop the government’s appeal on a House lawsuit (decided favorably in June 2016) that challenged funding for individual insurance subsidies enjoyed by an estimated 85% of the people who obtain coverage on the state and federal health insurance exchanges, according to an article in the Wall Street Journal.

For its part, the Republican Congress is expected to go after individual and employer mandates by passing legislation that could repeal those aspects of the program. On the other hand, a hospital analyst at Moody’s Investors Service told KHN that he expected to see an expansion of value-based payment under Republican leadership.

No one expects private insurance companies, employers, or hospitals to cut back on their own payment reform efforts.

Defying initial expectations, the stock market rallied on the two days following the election, with mixed impact on health care stocks: pharmaceutical stocks rose and for-profit hospital stocks dropped. Former Secretary Hillary Clinton had made negotiating drug prices for Medicare and Medicaid a part of her platform, a cause Trump raised during the primaries and then dropped. The market appears to have priced in Medicaid reductions when it devalued for-profit hospital stocks. In total, an additional 20 million people have gained insurance under ACA.

Mark McClellan, Administrator of CMS during the George W. Bush administration, told KHN that Republicans will face the same challenges in crafting a health care reform plan that Obama faced.

“It’ll be a different path, but the urgency of finding ways to transform health care—to give care that’s more personalized in prevention and less costly and more accessible, especially to people of limited means—the pressure to do that is not going to go away,” he said. “It’s going to increase.”

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