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March 8, 2017

Why major doctor and hospital groups are opposing the House GOP ACA replacement plan

Daily Briefing

Health care industry stakeholders on Tuesday voiced their concerns about a House GOP bill to repeal and replace the Affordable Care Act (ACA).

While some of the feedback was positive, organizations across the industry expressed broad concerns with provisions that change Medicaid to a per capita allotment model and replace the ACA's income-based subsidies with age-based tax credits.

Here's the House GOP plan to repeal, replace the ACA

House Speaker Paul Ryan (R-Wis.) on Tuesday afternoon signaled the House Energy & Commerce and Ways & Means committees would move forward on Wednesday with plans to mark up the legislation.

Prominent hospital groups object to Medicaid changes, legislative process

Several prominent hospital organizations—including the American Hospital Association (AHA), the Federation of American Hospitals (FAH), and America's Essential Hospitals (AEH)—raised concerns with the bill's proposal to move Medicaid to a per capita allotment model and scale back the ACA's Medicaid expansion.

AEH CEO Bruce Siegel said the proposed Medicaid "changes alone could result in deep funding cuts for essential hospitals, which now operate with little or no margin. Our hospitals could not sustain such reductions without scaling back services or eliminating jobs."

AHA President and CEO Richard Pollack in a letter to House Republicans recommended Congress consider expanding the "use of waivers with appropriate safeguards," which he wrote "can be very effective in allowing state flexibility to foster creative approaches and can improve the program more effectively than through imposing per-capita caps."

FAH in an emailed release said the legislation needs to do more to avoid Medicaid funding cuts, maintain coverage levels, and protect employer-sponsored coverage. FAH President and CEO Chip Kahn said, "Failure to meet these core principles may threaten our ability to ensure that Americans are provided with the health coverage and access to care they need and deserve."

AHA and AEH also urged Congress to hold on the bill until the Congressional Budget Office releases its cost score and coverage estimates. AEH's Siegel said, "A score is crucial, as this legislation could place a heavy burden on the safety net by reducing federal support for Medicaid expansion over time and imposing per-capita caps on the program."

Pollack also raised specific concerns with provisions in the bill that provide relief to other industries by repealing ACA taxes on medical devices, tanning salons, and insurance plans, while leaving in place Medicare payment cuts for hospital services. Pollack wrote, "If coverage is not maintained at the current level, those resources need to be returned to hospitals and health systems in order to provide services to what will likely be an increased number of uninsured Americans."

In a statement, AHA added, "We look forward to continuing to work with the Congress and the Administration on ACA reform, but we cannot support The American Health Care Act in its current form."

Meanwhile, 340BHealth, a not-for-profit organization that represents hospitals and health systems in the federal 340B drug discount program, told MedPage Today that it was "happy" that the bill would not negatively affect the drug discount program.

Physician, nursing groups concerned about potential losses in coverage

The American Medical Association (AMA) in a statement called the House GOP bill "critically flawed." In a letter to congressional leaders AMA President Andrew Gurman outlined several provisions in which the organization feels the bill "falls short," including provisions that:

  • Tie tax credits to individuals' age instead of income;
  • Roll back the ACA's Medicaid expansions and turns Medicaid into a per capita allotment model;
  • Reduce funding for the Prevention and Public Health Fund; and
  • Target funding for Planned Parenthood and affiliated providers.

American College of Physicians President Nitin Damle also took aim at the GOP's proposal to replace the ACA's subsidies with tax credits, saying they "will make coverage far more expensive for poorer, sicker, and older persons and those in high health care spending areas." In addition, he said provisions that would halt the Medicaid expansion in 2020 would "force states to restrict eligibility and curtail benefits."

Wanda Filer, chair of the board at the American Academy of Family Physicians, in a letter to the House Energy & Commerce Committee, said, "The AAFP is uneasy that the focus of the [bill] appears to be on 'taking away' coverage and benefits." However, AAFP did praise lawmakers' decisions to continue some ACA provisions, such as coverage protections for individuals with pre-existing conditions.

The American Osteopathic Association said the group is "concerned the legislation does not include any changes needed to bend the cost curve, which is a more fundamental cause of our current difficulties in ensuring access to affordable, high-quality care to all Americans."

The American Nurses Association (ANA) attacked the process House lawmakers are using to pass the bill, saying committee leaders are "bucking the rules" by not holding public hearings on the bill. In a statement, ANA said, "If Congress truly cares about improving healthcare for all Americans, they need to give this bill fair and open hearings, and they need to hear from nurses before moving forward."

Insurers voice concern about market stability, tax credits

Meanwhile, insurers are split on the effects the bill will have on the individual market.

Are the ACA exchanges really in a death spiral? We asked the experts.

Alissa Fox, senior VP of the Office of Policy and Representation for Blue Cross Blue Shield in a statement said the House GOP bill "envisions providing a smooth transition for consumers in 2018 and 2019, including making coverage more affordable by eliminating the tax on health insurance policies," adding that lawmakers must ensure the tax credits "for 2020 creates a marketplace that enables people to get the coverage they need at a price they can afford."

However, J. Mario Molina—CEO of Molina Healthcare, which offers ACA plans in nine statessaid the House GOP's proposed penalty to encourage individuals to enroll in coverage was not enough to support a robust risk pool. He added that eliminating the ACA's individual mandate could cause individual plan premiums to 30 percent or more next year, which he estimated could result in fewer consumers enrolling in plans. "You're going to see big rate increases, and you're going to see insurers exit markets. … [T]his is going to destabilize the marketplace."

Tom Policelli—chief executive of Minuteman Health, which offers exchange plans in Massachusetts and New Hampshiresaid the bill does not go far enough far enough to stabilize the individual insurance market, which he described as being "on fire."

Ceci Connolly, CEO of the Alliance of Community Health Plans, in a statement said, "Having a draft replacement to review is a positive step for market stabilization by outlining effective dates." However, Connolly expressed reservations about the way tax credits would be calculated and the effects of the proposed Medicaid changes. She said, "Those are some of the areas that are critical to ACHP members and more information is needed."

Patient advocacy groups raise questions about access

Several patient advocacy groups—including the American Thoracic Society, the American Heart Association, and AARP—raised concerns about the potential for the House GOP's proposed Medicaid changes to reduce access to care for their patient populations.

In addition to those concerns, AARP criticized a provision that would allow insurers to charge older customers up to five times more than younger individuals. AARP EVP Nancy LeaMond said, "Before people even reach retirement age, big insurance companies could be allowed to charge them an age tax that adds up to thousands of dollars more per year."

Meanwhile, Chris Hansen, president of the American Cancer Society's Cancer Action Network, said converting an income-based subsidy to a flat tax credit, "combined with reducing the standards for quality insurance, could return cancer patients to a world where many are unable to afford meaningful insurance or are left to buy coverage that doesn't meet their health needs."

Sean Tipton, chief advocacy and policy officer for the American Society for Reproductive Medicine, said his organization is most concerned with what he called the "malicious and counterproductive attempt to deny Planned Parenthood payment for services." He added, "There is already a ban on federal funding for abortion, this denies payment for things like Pap smears and contraception."

Trust for America's Health CEO John Auerbach raised concerns about provisions that would reduce public health and prevention funding. "Losing this funding would wreak havoc on our efforts to reduce chronic disease rates, immunize our children, stop the prescription drug and opioid epidemic and prepare the public health system to prevent infectious disease outbreaks," he said in a statement.

Chamber of Commerce voices support

In a show of support for the bill, the Chamber of Commerce praised the bill for repealing many tax increases levied under the ACA and for delaying implementation the law's Cadillac tax until 2024. In a letter to lawmakers, Neil Bradley, the Chamber's SVP and chief policy officer, said the legislation and "the successful mark-up of the provisions in the Ways and Means and Energy and Commerce Committees tomorrow are absolutely critical in taking steps to restore choice, flexibility and innovation to the nation's health care markets."

Governors split on House GOP's Medicaid expansion proposal

Governors also have voiced mixed reactions on the proposal's eventual phase-out of the ACA's Medicaid expansion, the AP/Sacramento Bee reports.

For instance, Ohio Gov. John Kasich (R) on Tuesday tweeted that he opposes the proposal because "phasing out Medicaid coverage without a viable alternative is counterproductive and unnecessarily puts at risk [states'] ability to treat the drug addicted, mentally ill, and working poor who now have access to a stable source of care."

However, Arkansas Gov. Asa Hutchinson (R) expressed optimism that the proposal could allow states more flexibility in the their Medicaid programs. He told NPR's "All Things Considered" that the legislation is "a good start ... but it's not perfect yet," adding, "[G]overnors are going to be continuing to submit our ideas and evaluate the proposal and be a part of the debate. And it's not going to be a quick resolution, even though this is a good start."

(Wilson [1], The Hill, 3/7; Firth, MedPage Today, 3/7; Wilson [2], The Hill, 3/7; Fiore, MedPage Today, 3/7; American Medical Association statement, 3/8; Diamond, "Pulse," Politico Pro, 3/8; O'Donnell, USA Today, 3/7; Tracer/Edney, Bloomberg, 3/8); Morse, Healthcare Finance, 3/7; Mathews et al., Wall Street Journal, 3/7; Beaumont/Noon, AP/Sacramento Bee, 3/7; Thompson, Cincinnati Enquirer, 3/7; "All Things Considered," NPR, 3/7).

What to know about the House GOP's repeal and replace plan

House Republicans just released their proposal to repeal and replace portions of the Affordable Care Act. This session will provide participants with an overview of key aspects of the proposal, including a look at possible changes to the individual insurance market and Medicaid program.

In addition, we will provide our early analysis on the impact of the proposal on providers and thoughts on how providers should be preparing for changes to the ACA.

Register now

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