Last week’s election of Donald Trump to the office of the President has led to more than a fair amount of uncertainty and speculation regarding all areas of U.S. policy. And the health and human services field is certainly no exception to the speculation. Top of mind for those in and out of the field is President-Elect Trump’s avowal to repeal “Obamacare,” or the Patient Protection and Affordable Care Act (PPACA) (see Here Is What Donald Trump Wants To Do In His First 100 Days).
What exactly does this mean in terms of the law’s varied provisions? It’s hard to tell. On last Sunday’s edition of 60 Minutes, President-Elect Trump said he’s interested in preserving at least two parts of the law: allowing young adults to remain on their parent’s insurance until age 26 and requiring coverage for individuals with pre-existing conditions (see 60 Minutes interview: President-elect Donald Trump and What Will Trump Do To Obamacare?). At this time these are just statements, and we do not have a true proposal or plan for what health care will look like the future.
But, I think it is instructive to look to past bills that attempted to repeal the PPACA. In October 2015, a bill repealing the PPACA — sponsored by Congressman Tom Price (R-GA) who is rumored to be an option for HHS secretary — actually made its way to President Obama’s desk. However, President Obama vetoed the legislation in January 2016 (see H.R.3762 – To provide for reconciliation pursuant to section 2002 of the concurrent resolution on the budget for fiscal year 2016).
Here are some of the main points of that repeal bill:
- End Medicaid expansion and remove the enhanced federal medical assistance percentage (FMAP).
- End of the enhanced FMAP for home- and community-based attendant services.
- Medicaid benchmark plans are no longer required to provide minimum essential health benefits after 2017.
- Increase funding for community health centers, grants to states to address substance abuse or respond to urgent mental health needs, and increase disproportionate share hospital (DSH) allotments.
- Hospitals may no longer elect to provide Medicaid services to individuals during a presumptive eligibility period.
- Remove taxes on medical devices, indoor tanning tax, high-cost employer sponsored health coverage (the Cadillac tax), and Medicare tax on income above a certain threshold is eliminated.
- Elimination of the annual fee on health insurers, as well as manufacturers and importers of brand name prescription drugs.
- Elimination of the premium tax credit for individuals and employers.
- Elimination of the individual mandate.
The proposed bill did not include a replacement plan. So the immediate impact of this type of bill would be that the 5.9 million people covered under the Medicaid expansion would likely rejoin the ranks of the uninsured and the U.S. uninsured rate would return to 14% (see The Effects Of Medicaid Expansion On The Uninsured Rate & Medicaid Costs). This population would once again be served solely by cash payments and a safety net system composed of community health centers, hospital charity care, and state-funded behavioral health treatment. It would put the definition of minimum essential health benefits under the purview of the states.
At this point though, it’s hard to make a concrete prediction of what will happen. The repeal of the PPACA might be complete, or perhaps only the unpopular provisions will be repealed. And while replacement plans have been presented, none have stood out as the preferred path for going forward (see I read 7 Republican Obamacare replacement plans. Here’s what I learned.) With that in mind, here are the four PPACA provisions the OPEN MINDS team identified as the most important for health and human service executives to keep an eye on:
- Guarantee issue provision on whether insurers will be required to cover consumers with pre-existing conditions, which would require some sort of “universal” coverage from an actuarial perspective)
- A roll-back of Medicaid expansion, which would move these consumers to the private market
- Removal of minimum loss ratio (MLR) requirements for health plans, which would require health plans to continue to provide a minimum amount of service for their premium dollars
- Elimination of parity for mental health and substance abuse services, which would increase demand for behavioral health services from safety net providers
As we get closer to January 20, 2017, and the Trump presidency, we’ll continue to cover these issues and discuss the strategies need to be successful. For more on planning in a time of uncertainty, don’t miss “From Strategy To Action: The Keys To Strategy Implementation & Organizational Change,” at The 2016 OPEN MINDS Strategy and Innovation Institute, in New Orleans on June 6, 2017.