Will the GOP’s daring plan to revive healthcare debate give the American Health Care Act another shot?
Mere weeks after Speaker of the House Paul Ryan (R-WI) announced that Obamacare is “the law of the land,” President Donald Trump revealed a bold new tactic to revive healthcare reform. In an interview with the Wall Street Journal last week, the president stated he is considering blocking federal payments provided directly to insurers to fund premiums and other medical costs for low-income Affordable Care Act enrollees.
Withholding the federal payments would force Democrats to negotiate a new healthcare law, President Trump stated. “Obamacare is dead next month if it doesn’t get that money,” President Trump said. “I haven’t made my viewpoint clear yet. I don’t want people to get hurt...What I think should happen and will happen is the Democrats will start calling me and negotiating.”
At stake are the annual $7 billion in federal funds to cover the cost-sharing reduction subsidies. The payments, instituted under the ACA, rankled House Republicans, who sued the Obama administration, arguing that the funds must be appropriated by Congress. Last year, a federal judge ruled in favor of the GOP lawsuit. The Obama administration filed an appeal and the lawsuit now sits before the U.S. Court of Appeals for the District of Columbia Circuit
The court has yet to render a ruling, and following the election, Republicans obtained an initial delay of the case, the Wall Street Journal reported. “It wasn’t authorized by Congress,” President Trump said. “I’m going to have to make a decision.”
Can the Bill be Revived?
Leading Democrats, meanwhile, show no inclination to revisit the healthcare law. Sen. Charles Schumer (D-NY) said the president was “threatening to hold hostage healthcare for millions of Americans…to achieve a political goal of repeal that would take healthcare away from millions more. This cynical strategy will fail.”
In response, major insurers warned withholding the funds would create more havoc in already teetering individual marketplace where Humana and Aetna have threatened to exit the exchanges, according to a Reuters report. Paul Ryan, who led the aborted AHCA vote in the House, said he prefers the administration continue the payments, a move supported by Republican Representatives Tom Cole of Oklahoma and Greg Walden of Oregon.
“I don’t think anybody wants to disrupt the markets more than they already are,” Cole told the New York Times. “It’s a very unstable market.”
But it’s uncertain whether a divided Republican party would back a revived health care plan. AHCA failed to get the support of both moderate Republicans fearful of their constituents losing health coverage and the deeply conservative Freedom Caucus who objected to the proposed refundable tax credits in the bill. Freedom Caucus members also sought an immediate repeal of the taxes used to fund ACA and an end to Medicaid expansion prior to 2020.
A New Plan in the Works?
An April 17 report at TalkingPointsMemo.com, however, detailed a possible plan more to the liking of the Freedom Caucus. Modeled after a law in Maine (PL90), the proposal would establish federally subsidized high risk pools for sicker people (as did the original AHCA proposal), and permit insurance companies to charge older people, small businesses, and rural residents higher premiums.
The amended GOP proposal also mirrors the Maine law in that insurers would be allowed to offer less expensive plans that cover fewer services. Freedom Caucus members contend by eliminating mandated health care services, such as maternity care, premiums would drop.
In a significant departure from PL90, the GOP plan excludes Maine’s $4 fee on all individual, small-group, and employer-sponsored policies. Those dollars, which amounted to nearly $22 million annually to insurance companies, subsidized the state’s high-risk insurance pool. Instead, the previous AHCA bill would provide states with $15 billion to cover the medical costs of people with severe and chronic illnesses.
The amended bill’s lead author, Rep. Walden, termed the Maine law “as a great model…where it has decreased premiums and increased enrollment.” Speaker Ryan also spoke favorably of the proposal. “This amendment alone is real progress and it will help us build momentum on delivering on our pledge to the country,” Ryan said.
Yet the Maine plan has its critics, who say any increased enrollment was due to Obamacare. They also point to a steep rise in premiums for older people and small businesses as a huge negative. A report from Consumers for Affordable Health Care found premiums for people age 60 rose 18% or more a year after the law was enacted, while rates for small businesses climbed more than 40%.
More Questions for Agents
As with earlier GOP proposals to replace Obamacare, this latest iteration faces an uphill battle for passage in the House and Senate. As an agent, your duty is to stay up to date on any proposals so you can answer questions your clients and prospects are sure to have on their healthcare coverage.
Now might be a good time to discuss increased healthcare costs for your older clients who may have chronic medical conditions. Considering most of the proposals center on permitting health insurers to charge older people more, your senior clients must confront the possibility of having to pay more for health coverage. Help them figure out how they might find those extra dollars to cover higher premiums.
And while it may be tempting for your clients to sign a policy that covers fewer services (if the GOP proposals are ultimately enacted), you’ll want to make sure they are covered for all healthcare eventualities. Even your young, healthy clients could be hit with astronomical medical expenses if they decide to forgo essential healthcare coverage. No one knows what the future holds, but a good agent makes sure that clients are prepared for all possibilities.