Posts About The Takeaway

 

I would venture to guess that congressmen Paul Ryan and Joe Kennedy don't agree on too much, but one thing they do appear to agree on is that the ineptly named American Health Care Act (aka Trumpcare) is first and foremost a bill about cutting taxes. Ryan trumpeted the bill as a $1 trillion tax cut and seemed entirely unfazed by the fact that the beneficiaries of the tax break were overwhelmingly the richest households and big drug and insurance corporations. Meanwhile, Rep. Kennedy denounced the bill as "a tax cut wrapped up as health care" and called it "an act of malice rather than mercy" in a statement that went viral on YouTube.

And the Congressional Budget Office (CBO) has made it crystal clear who would pay for that tax cut: working families and especially older adults and people with disabilities. CBO projects that should AHCA become law, 24 million people would lose their health insurance – that's 80 percent of the number projected to lose coverage with a full repeal of the ACA. The financial assistance that makes coverage affordable for people who lack employer-sponsored insurance would be cut almost in half and would be restructured in a way that provides more assistance for the middle class but dramatically scales back help for people with more modest incomes.

Promises Made, Promises Broken

Ironically, the biggest losers under Trumpcare are the voters who provided President Trump with critical support during the election. For example, A 60-year-old person with an income of $30,000 would see her or his assistance shrink by an average of $6,000 per year. Many Trump supporters are now nervous that their coverage will be taken away, but in the face of all evidence to the contrary, some still cling to the hope that their candidate will not abandon them.  (Adding insult to injury for older adults, Trumpcare undermines Medicare's financial stability, despite Trump’s repeated promises not to cut the program. And the President’s budget called for eliminating federal funding for the meals on wheels program, among many other domestic program cuts.)

However, the greatest damage of Trumpcare may not be to the non-group insurance market, but to the Medicaid program. Notwithstanding his campaign promises, the legislation that Trump is backing "1,000 percent" would cut $880 billion in federal support for Medicaid. Cutting Medicaid would apparently fulfill a dream Paul Ryan has had ever since he was attending college keg parties… But the consequences for children and families, people with disabilities and seniors, should his dream become a reality, are serious. Capped funding would put states in a financial straightjacket, making it harder for them to meet the growing need for long-term services and supports or to respond to a disease outbreak like Zika or address the opioid addiction epidemic. Trumpcare would also force most states to abandon the recent expansion of Medicaid to more low-income adults.

Things Will Get Worse Before They Get Better

Not satisfied with inflicting all of these coverage losses, the most conservative members of the House are trying to make the bill even worse, and seem to be succeeding, at least for now. As the bill made its way through the Budget Committee, the committee took non-binding votes in favor of a more rapid phase-out of Medicaid funding for the 31 states that expanded the program under the ACA, making eligibility for non-disabled adults contingent on work and giving states more power to eliminate benefits or services for Medicaid beneficiaries. It is likely that some or all of these ideas will get converted into amendments in the House Rules committee where the bill is heading later this week before it goes to the floor.

While House leaders are trying to project confidence, the fate of the legislation in the House (let alone the Senate) is still unclear. Many of the most far-right members of the Republican House are still not on board. At the same time, changes meant to appease them could force some of the party's more moderate members – especially those in districts carried by Hillary Clinton – to think twice before voting to support a bill that would increase costs and cut coverage for thousands of their constituents. Many are unhappy with being asked to take a tough vote for a bill that could die or get substantially reworked in the Senate, and some have come out in opposition. Speaker Ryan is trying to keep these members on board by providing some additional help to older adults, but whether this will be enough to secure passage for the legislation in the face of opposition from health care providers, governors and concerned constituents remains to be seen.

Reviews are in on the House GOP health care plan, which has been enthusiastically embraced by President Trump, and they are pretty terrible. The plan has been panned by nurses, doctors, hospitals and insurers as well as organizations representing older adults, cancer patients and others. But don't take their word for it, most of the conservative health policy establishment also gives the bill a failing grade. Setting aside the far right ideologues (who also hate the bill, but for different reasons) ACA critics have, among other things, called the plan "worse than Obamacare itself" and say there is "little doubt it will price millions out of the health care market".

Our dystopian health care future under ACHA

Thanks to the ACA, the percentage of uninsured people in the U.S. has dropped to an all-time low. But that progress would be reversed under the GOP’s proposed plan. The Brookings Institute estimates that 15 million people would lose coverage. The combination of reduced tax credits, increased out-of-pocket costs and weak incentives to enroll would touch off an adverse selection spiral that would push premiums higher and cause even more people to drop coverage.

These changes are only the tip of the iceberg. Cuts to the Medicaid program would also force millions more to lose coverage. Cuts to Planned Parenthood would result in an increase in unplanned pregnancies and a significant decrease in health care access for millions of women and LGBTQ people. As the dominoes continue to fall, providers would begin to see revenue go down as uncompensated care costs rise, leading to service cutbacks, layoffs and in some cases, especially in rural communities, hospitals would be at a heightened risk of closure. Resources to combat the opioid crisis would be lost and states' capacity to finance long term care for older adults and people with disabilities would be undermined just as the need increases due to the aging of the baby-boom generation.

It would only get worse as it moves through the House (if it does). The bulk of the discussion in the House has been with the far-right Republican Study Committee and even farther right Freedom Caucus who are demanding more cuts to the Medicaid program. With only 22 votes to spare, it is likely that Speaker Ryan will accommodate their demands and Pres. Trump has already signaled that he is on board.

Why is the bill so bad?

Why have the Republicans produced such a bill so bad that even their own policy experts think it is a disaster? The answer is that the repeal and replace debate has always been a political exercise driven more than anything else by the needs of far-right House members in deep red districts. Their biggest fear is that what happened to Eric Cantor (a successful primary challenge from the right in case you forgot) will happen to them. Their goal is to vote on a bill that hews as closely as possible to the Heritage Action orthodoxy. Whether that bill actually offers a framework for workable health policy or even whether it ever becomes law are secondary concerns.

And while House districts are becoming less ideologically diverse, the bill that is emerging is very bad for a number of states with key Republican Senators.

Consider West Virginia; the state has seen one of the biggest drops in the percentage of uninsured in the country thanks to both Medicaid expansion and ACA tax credits. Additionally, there has been a huge expansion in access to treatment for substance use disorders. As a relatively rural state, both West Virginia’s hospitals and rural consumers would be big losers as coverage declines.

Or consider Alaska; no state in the country would feel a bigger impact from the rollback of health insurance tax credits. On average people in Alaska would receive $10,000 less than they do now.

Or take Arizona, a state with a lot of early retirees and a rapidly growing elderly population. Proposals to increase insurance costs for older adults and cut funding for Medicare could prove very unpopular. And a squeeze on Medicaid funding would undermine the state's successful Medicaid expansion as well as its ability to finance long term services and supports for its aging population.

Maine is in a similar situation even though it did not take up the Medicaid expansion. With the oldest median age population in the country as well as being a relatively low-income state, increases in insurance costs for older adults and decreased Medicaid funding would hit the state hard.

It's no wonder that senators from these states have expressed reservations about the emerging legislation. And it is still unclear that, given differing political dynamics between the House and the Senate, there is enough common ground between the two branches to get a bill through.

Sen. McConnell is a skillful and determined party leader, but success of a bill with consequences as disastrous as this one be might actually be worse for Republicans than failure. Pres. Trump has already put Plan B on the table -- let it (cause it) to fail and blame the Democrats. While they would never admit it openly, some Republican Party leaders may secretly prefer continuing to have a weakened ACA to kick around for a couple more years. If they succeed in passing a law, then they would own the consequences of Trumpcare and it ain't going to be pretty.

All this suggests that the debate over the direction of health policy is far from over regardless of the outcome of ACA repeal efforts over the next few weeks. If a bill passes, Republicans will feel a need to put lipstick on the pig (an effort that will probably be much better financed than defense of the ACA ever was). However, as coverage declines and the effects ripple through providers, state budgets and communities across the country, it will be hard for them to escape the blame. If the legislation fails, expect ongoing efforts to undermine the ACA through administrative action (and inaction) along with efforts to pin the blame for the resulting problems on the law itself. Either way expect the fight to carry right into the 2018 election.

Although it will undoubtedly undergo further revisions, we now have a pretty clear idea of what the House Republican health plan entails. At the same time, House and Senate leadership's political strategy has also come into focus.

With new information about both the policy and the politics, we can now answer the questions I posed last week: How will the Republican leadership plans solve the interlocking problems of getting their budget numbers to work and securing a majority in both houses of Congress without running into a firestorm of public opposition.

Let's take these questions in order.

Wealthy are winners, low- and moderate- income and older adults are losers

There is a two-part solution to the question of how to fill the budget hole created by the Republican commitment to give big tax breaks to corporations and high-income households. First, "replace" as little of the ACA as possible to keep spending down. So, although refundable tax credits are part of the Republican plan, the tax credits are much smaller than the ones in the ACA. As a result, individuals would on average pay an additional $2,400 and family costs would increase by over $4,000.

Two groups are particularly disadvantaged by the tax credit structure, which adjusts for age but not for income. The first is lower-income people of all ages – many will find that either they cannot afford coverage at all, or that a plan with affordable premiums comes with such high cost-sharing that it is not worth it. Since there would no longer be any penalty for being uninsured, many healthy lower-income individuals would simply go without coverage.

The second big group that gets hurt is older adults. Under the House plan, tax credits for the oldest enrollees would be twice as high as for the youngest, but premiums could be five times higher or even more at the discretion of states. That would again force many people to drop coverage. So, smaller credits and fewer enrollees means less spending to offset less revenue.

Shifting costs onto states, providers and Medicaid beneficiaries

The other part of the solution is to take a giant bite out of Medicaid. First, the Republican plan phases out the ACA's enhanced match for the Medicaid expansion population. While states would still be allowed to cover this group, it would cost them much more to do so. Secondly and even worse, there would be a huge reduction in federal support for the core Medicaid program that covers low-income children and parents, people with disabilities and seniors.

The version of the House bill that leaked last week capped federal matching payments for Medicaid beneficiaries but proposed to increase the cap at the rate of medical inflation plus 1 percentage point. While this could still cause a lot of problems for specific states and beneficiaries, this is actually higher than the average growth rate per Medicaid beneficiary (hence not generating a lot of savings). The new proposal reduces the growth rate of the cap to Medical CPI, but this is unlikely to be the final word. Of course, there is no CBO score, so what happens if the numbers still don't balance? Simply go back and cut Medicaid some more.

Damn the torpedoes, full speed ahead

So much for problem number one. What about problems two and three: public opposition and not enough votes in the Senate or the House (or both)? This is where secrecy and speed come in. Speaker Ryan and Leader McConnell are trying to jam legislation through their respective chambers before either the members, the voters or other stakeholders, including providers and governors, can figure out what is in it. That's why there was so much effort to keep the text secret until the last minute, why there will be no hearings, and why the committees are not bothering to wait for analysis from CBO, the CMS actuary or outside experts. The extensive damage the bill will cause will become clearer and clearer the more time the bill hangs out there, as will the disconnect between Trump's often repeated promises of affordable coverage for all and the reality of millions losing their coverage and rising out-of-pocket costs.

Will it work?

While we should not underestimate the pressure that party leaders can put on the rank and file to fall in line, the outcome of this debate is by no means settled. On the far-right, members are complaining that the leadership proposal does not repeal enough of the ACA and outside groups are mobilizing against the plan. Many employers also oppose the plan because in addition to the benefit cuts, it caps the income tax exclusion for employer-provided health benefits. And the deep cuts to Medicaid may be too much for governors of either party to swallow while adding new constituencies among both consumers and providers to the ranks of the opposition.

...Not if we can help it

Grassroots opposition has already had a dramatic impact on both the timing and the content of the health care debate this year. Additional pressure is needed now to slow down the renewed rush to dismantle health coverage for millions of people and force Congress to go back home and face the voters again in April before they take a final vote.

As Republicans struggle to come to agreement on how far to go with ACA repeal and what to put in its place, they are confronted with three interlocking math problems: first, how to make their budget numbers add up; second, how to put together a proposal that can command a majority in both the House and the Senate; and third, how to avoid running afoul of public opinion.

Where to Start?

Let's start with the budget problem. The budget reconciliation instruction only requires Congress to save $2 billion over 10 years, which is barely even rounding error in the context of overall federal health spending. It should be easy, right? But the complications begin immediately with the Republican commitment to repeal the taxes that helped pay for the expanded benefits in the ACA.

How to plug that hole? In the good old days of "repeal and delay" (about a month ago), you simply wiped out all of the ACA spending – including both the tax credits for marketplace coverage and all of the Medicaid expansion funds – and made some vague promises about fixing it later, someday, maybe (not!). But “repeal and delay” ran aground on the other two problems – public opinion, which is strongly against it (only 18 percent support this course), and that constituents have not been shy about making their objections known to their members of Congress.

As a result, there aren't enough votes to pass repeal and delay, so GOP leadership is in need of some kind of replacement plan. That replacement plan has to make good on Republican commitments to preserve access to coverage for people with pre-existing conditions and also has to avoid yanking Medicaid coverage (and funding) away from states. But preserving funding for the Medicaid expansion (even if the federal matching rate phases down over time) and creating a substitute for the ACA tax credits, even at reduced levels, eats up some of your savings, so you are still left with a budget hole.

How big a hole depends on how much of the expansion funding is preserved and how adequate are the new tax credits. The greater the funding preserved, the bigger the budget hole. But proposals to shrink the funding have fueled opposition in states that have benefited from the Medicaid expansion, including 16 states with Republican governors. It would also cause the number of uninsured to spike and do little to allay the public's fear that people with pre-existing conditions will again be locked out of the insurance market. 

A notable feature of the recently leaked draft House repeal-and-replace plan is that it tries to address these problems by providing more funding for the Medicaid expansion and for subsidizing private insurance than did previous proposals, such as the one authored by now-HHS Secretary Tom Price. But because at least a portion of the ACA funding is preserved, a sizable budget hole remains, although we don't know how big because no CBO score has yet been made available.

Fixing a Hole?

How is this hole to be plugged? Again according to the leaked plan, there are two additional revenue sources. One, involves cuts to the core Medicaid program; the other involves changes to the tax exclusion for employer-sponsored insurance, in the sphere of the ACA's "Cadillac tax" that places an excise tax on the most expensive health plans. But both of these revenue sources immediately run into trouble with respect to math problems two and three, above. The "Cadillac tax" is wildly unpopular with both the public and in Congress, across party lines. It is not at all clear that a majority of members will repeal the Cadillac tax only to turn around and support replacing it with something that essentially does the same thing.

On the Medicaid front, the House proposal is to continue to provide states with enhanced matching funds through 2019, but only for those beneficiaries who are currently enrolled. New enrollees would receive only the regular match rate. Starting in 2020, states would receive a capped amount for each beneficiary. The proposal calls for this capped payment to grow at the rate of medical CPI plus one percentage point. It's not clear that this adjustment factor saves a lot of money. If not, it then doesn't do much to fill the budget hole (running into math problem one).

The House Medicaid proposal differs significantly from another leaked proposal, this one developed by a number of Republican governors. In particular, the governors do not want to be forced to assume increased risk for the cost of care for beneficiaries who are jointly eligible for Medicare and Medicaid. (The "dual eligibles" account for over one-third of all Medicaid spending.) At the same time, at least some Republican governors seem perfectly comfortable with substantial Medicaid funding cuts as long as they have increased freedom to cut people off of Medicaid and reduce benefits for those who remain. Of course, this would just shift costs onto providers and beneficiaries. In essence, perhaps in an effort to keep senior citizens, people with disabilities and the providers who serve them on the sidelines, the governors' plan boils down to massive eligibility and benefit cuts for non-disabled adults and children.

Especially if the votes aren't there for tackling the tax-exclusion, then the Medicaid cuts would have to be deeper – much deeper – than what is laid out in either of the leaked draft proposals.  And benefits would likely be even skimpier both for Medicaid beneficiaries and in the private market. An analysis of the replacement plan based on documents released by Speaker Ryan suggests that millions would lose coverage. Such draconian cuts in health coverage would spark even more public outcry and could erode support in both the House and Senate, even though one House leader called a decline in coverage "a good thing" (again, see math problems two and three, above).

All in all, once the "original sin" of repealing the ACA taxes is committed, solving all three "math problems" – i.e., finding a way to make the budget numbers work while keeping a majority of support lined up in both the House and the Senate and not enraging the voters – adds up to a monstrous headache for Speaker Ryan and Leader McConnell. (Sad!)  Perhaps that's why former House Speaker Boehner predicts that the Republican effort to repeal most of the ACA will ultimately fail.

Let's hope he is right.

Congressional Republicans are executing a strategic pivot with respect to the Affordable Care Act (ACA). In the face of successful efforts to mobilize public support for maintaining coverage, they are recognizing the political difficulty of pulling health care away from millions of people (including Republican voters) and inflicting economic damage not only on those individuals but also on providers, insurers and state governments. This shift has several components.

First, they have "slowed their roll" with respect to repeal. The original congressional action plan called for sending a repeal bill to Trump on inauguration day. Plan B called for sending him a repeal bill on President's day. We are now on to Plan C, and we do not expect to even see a repeal plan, let alone a vote, before Congress returns from President's Day recess. The second component involves ramping up the rhetoric on the ACA's failures. Several congressional committees held hearings last week intended to show case failings of the law. At the same time, with help from the Trump administration, they are trying to create a self-fulfilling prophesy by undermining the operation of the ACA, creating a climate of uncertainty and confusion in order to thwart both insurer and consumer participation. Finally, in a nod to the support that most provisions of the ACA enjoy, they have made a rhetorical change from "repeal and replace" to "repair."

While the change is a welcome testament to the success of the resistance to date, it does not reflect any change in purpose on the part of most Republicans in Congress. They remain ideologically opposed to the social welfare state and to the redistribution of wealth from the top to the bottom. They are therefore unalterably opposed to the ACA or anything like it that expands the social right to health care and pays for it mainly by taxing the wealthy and big corporations.

In addition, both Ryan and McConnell probably feel that after seven years of demanding repeal, their credibility is on the line and they absolutely have to deliver on "repeal" regardless of the consequences. In addition, the far-right, as exemplified by groups like Heritage Action, remains committed to full repeal and fear of primary challenges is still a powerful motivator within Republican Party ranks. 

That said, "repeal" is not a static concept. Although support for full repeal remains strong among congressional leadership (see Senator Hatch's recent statement on repealing the ACA taxes), there is substantial dissension within the rank and file. The two critical wedge issues are the fate of the Medicaid expansion and whether the ACA-related tax revenue is preserved to pay for some kind of revised subsidy scheme. 

If congressional Republicans preserve both the Medicaid expansion and subsidy revenue it will open up room for bipartisan discussion on ACA amendments. If not, then any possibility of an acceptable replacement plan essentially vanishes. Although Republicans may try to come up with something, or, more likely, somethings that they call “replace,” in reality it will reflect a major erosion of health and economic security for low- and moderate-income people – especially for people with serious or chronic health conditions. If Democrats can resist pressure to bestow a patina of bipartisanship on any bill that undermines health security for the American people, then Republicans would be forced to either maintain many of the gains of the ACA or would be likely to pay a high political price for failing to do so.

The classic “bait and switch” in the world of retail sales is to entice people with an offer of something good and then switch them to something of either inferior quality, higher price or both. This is a perfect description of the health policy changes the incoming Trump administration and Republican congressional leadership are trying to foist on the American people. The setup for this strategy is to point to a real problem – in this case, deductibles and out-of-pocket costs, which are indeed too high for many households. High out-of-pocket costs impose a hardship on moderate income families, especially for people with chronic conditions,  and also undermine the perceived value proposition of purchasing health insurance. Healthy people are less likely to buy insurance if deductibles are too high to make their anticipated health care needs more affordable overall.

To deal with that problem, Republicans are promising something better than the ACA – "something "terrific" (i.e., the "bait"), but they have remained opaque with respect to what that “something” might be or when it will appear. The reason may be that the plans they have floated so far would make out-of-pocket costs higher, not lower (i.e., “the switch”). But many Republicans, especially in the Senate, are starting to worry that people are not falling for the scam. This is leading to further obfuscation about the timing and content of a replacement plan and has even led some commentators to assert that the original "repeal and delay" strategy is dead.

Unfortunately, reports of the demise of repeal and delay – or "repeal and run" as Sen. Elizabeth Warren termed it at a health care rally in Boston over the weekend – are premature. The Senate and House have both set repeal in motion with their votes last week, but replace is nowhere on the horizon.
 

Is Replace Even Possible?

It's not at all clear that Republicans will ever be able to coalesce around a plan among themselves, let alone one that can attract enough Democrats to put it over the top in the Senate with the required 60 votes. New York Times columnist Paul Krugman offers a metaphorical policy explanation for why replace remains so elusive. He suggests that the “three legs” of the ACA “stool” – elimination of pre-existing conditions, the individual mandate and tax credits – are indivisible. If you take away any of the three, the stool will collapse. While there is something to this framing, all three of these “legs” could, in theory, be tinkered with rather than lopped off, and the stool relabeled "Trumpcare." (For example, the individual mandate could be converted to a late-enrollment penalty like the one used in Medicare.)

The heart of the Republicans’ problem is even more fundamental and is laid out clearly by Jonathan Chait in New York Magazine. It's worth quoting directly: "Giving people the better coverage they promised, or even minimally acceptable coverage, requires providing resources and there's no way that's ideologically acceptable to conjure those resources, which is why the unified Republican plan has been stuck in the almost-there stage since 2009."

In other words, Republicans can't have both their tax cuts for the rich and their "terrific" health plan, too. This fact was acknowledged by Sen. Bob Corker last week, but does not seem to have broken through to President elect Trump, who made a surprise "announcement" over the weekend that his health plan covering everybody and with much lower deductibles than the ACA, was almost ready (an announcement that couldn't possibly have had anything to do with wanting to divert some attention in the news cycle on a day when tens of thousands of people in communities across the country were rallying to protect health care coverage.) Of course, there were no details provided.

It will be interesting to see what Trump's new plan is (cross-state sale of health insurance?), if it ever actually materializes. But unless there is adequate funding, the mirage of an acceptable replacement plan will promptly dissolve. And juxtaposed against mammoth tax cuts for the wealthiest households, like the ones in the 2015 repeal bill passed by Congress and vetoed by President Obama, skimpy subsidies and even skimpier coverage will look miserly indeed. It's hard to say at this point whether there are a few Republican senators with both the good sense and the political will to resist the looming disaster of ACA repeal – a disaster that will fall heavily on the many rural communities that voted for Donald Trump. But if not, there is every reason to expect that "Trumpcare" will become the new "Hooverville" – a lasting symbol of government indifference and malfeasance, as well as an enormous political liability for the GOP.
 

Honoring Dr. King

Martin Luther King Jr. said, "Of all the forms of inequality, injustice in health care is the most shocking and inhumane." It's therefore more than a shame that instead of press coverage of a major new report on how communities can attack health disparities, released by the National Academies of Medicine Science and Engineering, the major news outlets were focused on attacks on a hero of the civil rights movement by the president-elect. Tackling the persistent health disparities that plague our country would be a truly fitting tribute to Dr. King. Instead we are faced with the threat of policies that would make disparities far worse, including not only the rollback of the ACA, but threats to the core Medicaid program that covers millions of low-income children, seniors and people with disabilities. We can honor Dr. King and the thousands of activists of the civil rights movement by drawing inspiration from their activism and resistance as we confront an existential threat to the health and economic security of millions of people in our country.

That's Not Funny - That's Sick

It's funny, or at least it would be if it weren't so sad and so dangerous. Lack of transparency in health care is a problem that has often been decried. You buy health insurance, but you don't really know which providers are in-network. You go to the hospital, but you don't really know what it will cost you and you can still be subject to surprise out-of-network bills even if you go to an in-network facility. These are problems with the health care system that the American people want to see Congress address. Instead, the Republican congressional leadership and President-elect Trump want to extend this lack of transparency into health care policy-making by pushing a "buy now, pay later" plan to repeal essential components of the Affordable Care Act, while replacing them sometime… later, maybe... with something still to be determined.

 

Selling a Pig in a Poke

Essentially, Republican leaders are tossing a lit stick of dynamite into the current health care system and asking people to trust that they will figure out a way to contain the blast damage before it explodes. In fact, they are promising that their plan will protect people with pre-existing conditions, provide everyone with access to affordable coverage, offer people better coverage at a better price than they have currently and make sure that no one is worse off than they are now.

But there is great reason for the American people to be skeptical that Republicans can deliver. First, they have been unable to coalesce around an ACA alternative for the past seven years and there are huge disagreements within the party over what (if anything) should replace the law. Second, there is little reason to expect that Democrats would collude in passing a plan that undoes the protections that the ACA provides.
 

No One Will Be Hurt... Until They Are.

But what about a plan that delivers on all of those promises? Don't count on it. Speaker Ryan really only meant that people wouldn't be made worse off during the transition period. But even this promise is one they are unlikely to be able to deliver on. Last week, the American Academy of Actuaries issued a letter warning that the "repeal and delay" strategy could destabilize the individual insurance market long before any replacement plan could be passed, let alone be implemented.

 

Surveying the Damage

So just how bad would it be? According to an analysis by the Urban Institute, repeal without replace would roughly double the number of people without health insurance. Hospitals would have to absorb more than a trillion dollars in increased uncompensated care costs over the next decade. It’s no wonder then that with a major surge in uncompensated care staring them in the face, hospitals are demanding that if Congress repeals the ACA's coverage expansion they also repeal the spending cuts the hospitals supported to help finance the coverage expansion. Repeal would undermine much of the progress that has been made toward mental health parity and undermine national efforts to combat opioid addiction.
 

Follow the Money

While the “repeal without replace” strategy would be a disaster for many, including many voters who provided Trump's margin of victory in the electoral college, not everyone would be a loser. The healthy and wealthy would be winners while pretty much everyone else would lose. For starters, the "repeal and delay" plan seems to be as much about tax policy as it is about health policy. House Republicans are proposing an immediate tax cut that would mainly benefit people whose household income exceeds $200,000 while at the same time voting to repeal a tax credit that mainly benefits people earning less than 250 percent of the federal poverty line (about $50,000 for a family of three).

Added to that, what we can discern about congressional Republicans' thinking about a replacement indicates the same bias toward the wealthy. Republican plans seem to rely heavily on expanding the use of Health Savings Accounts (HSAs), but only those who have money to spare can afford to set money aside in HSAs. Therefore, the tax benefits of the accounts flow disproportionately to more affluent households.

Following the money can also tell us something important about whether congressional Republicans are even serious about trying to replace the ACA. The key question is what happens to the money that now pays for expanded Medicaid and tax credits on the marketplaces? Republicans may try to hold onto those funds so they have something to work with as they try to implement a replacement plan. Holding onto the money is no guarantee that "replace" will be any good (for example, funding could flow disproportionately to the wealthy, as appears likely under current replacement proposals) or even that there will be any replacement plan that can get through the House and Senate. But failure to hold onto the funds is pretty much proof of the lack of serious intent with respect to replace and a guarantee that most of the harmful consequences of repeal identified by the Urban Institute and others will come to pass.

Unless congressional Republicans can be persuaded to change course, we may find out sooner rather than later that all of the high-sounding promises of affordable coverage are nothing more than empty rhetoric.

It is often said that the first casualty of war is the truth. In the coming war on health security for the American people, one question is whether Donald Trump was sincere when he said he would not cut Medicare, a claim he made repeatedly throughout the campaign. Unfortunately, his selection of Tom Price as head of HHS raises a bright red flag as to whether Medicare is truly safe. 

Price is on record not only supporting Medicare vouchers but also for allowing doctors to balance bill Medicare patients - as if people in this country didn't already have big enough problems with out-of-pocket medical bills. Based on his history, it is hard not to believe that older Americans and people with disabilities will be right up there with low-income people and people with pre-existing conditions at the head of the line to receive a cut in their health care benefits from the president and congressional Republicans.

And while we’re at it, I wouldn’t take too much comfort from stories suggesting that Senate Republicans are cool to a Medicare voucher or premiums support plan (there is no effective difference between the two, it is just a matter of whether the fixed dollar subsidy goes to the beneficiary or directly to the insurer). It's the timing of the attack, not its substance that seems to concern them most.

Meanwhile, at least some Congressional Republicans are realizing that calling for a repeal that has no chance of actually happening is a much easier exercise than actually crafting a workable alternative. Perhaps it has something to do with the fact that - despite continued division over ACA - the public is deeply skeptical of any moves to repeal it without having some clarity on the alternative. Only about one in four voters support ACA repeal, fewer than the 30 percent who want to expand the law. Roughly equal numbers support implementing the law as is and scaling it back. Even those who favor repeal want to see the alternative first.

Voters are right to be concerned. The lengthy time gap that Republican leaders are envisioning between repeal and replace would be a "slow motion disaster" for health insurance. Moreover, deep divisions over what direction to move in underscore the possibility that the party could be unable to come to any agreement on a new plan (just as they haven't for the past six years). The Senate Republican Policy Committee unveiled their plan to begin repealing what they call "the most harmful provisions of the ACA." Apparently tax credits and Medicaid expansion that make health insurance affordable for 22 million people qualify as "harmful." That’s probably a surprise to the people who are getting those benefits.

One curious feature of our current moment in health policy is how divergent the impending course of action pledged by Republicans in Congress and the incoming Trump administration is from the preferences of major health care industry stakeholders. Dominant models of public policy making assume that the preferences of large economic stakeholders in a given policy area will exert a lot of sway over the outcome. To be sure, every interest group has something(s) they want to change about the Affordable Care Act (ACA), but there is very little appetite among providers, hospitals or insurers for rolling back coverage. For example, a recent survey in Modern Healthcare found overwhelming opposition from health care CEOs to repealing in the ACA without a replacement at the ready. Yet that is the course the Congressional Republicans seem ready to embark on – inflicting serious pain in the process, especially on providers (not to mention the millions of Americans who stand to lose coverage).

It seems hard to imagine a parallel in any other industry. (Of course, the banking industry didn't exactly love the Dodd-Frank bill, but its passage was only made possible by the self-inflicted meltdown of the industry). The present situation is so unusual that it demands an explanation. I don't presume to be able to peer into the minds of the repealers, but I think there is some combination of three things going on:

  1. Ideological extremism. An anti-government ideology is so profoundly held within most of the Republican leadership in Congress today that pursuing fervently desired goals is totally unmoored from considering any real-world consequences. Thus, the ACA must be repealed “because-government.” The real-world harms – the rise in medical debt and personal bankruptcy, the erosion of hospital finances, the increases in mortality – are just not germane.
  2. Health care as "piggybank." The money for touted big tax cuts for the wealthy and increased military spending has to come from somewhere. With federal discretionary spending already pared to the bone, there just isn't another major source of money beside the health realm to tap in order to pay for these "more important" priorities.
  3. “The dog catches the car” problem. For years, Congressional Republicans have been able to score political points railing against the ACA and passing veto-certain repeal measures without having to deal with the pesky problem of figuring out what would come after. The election of Donald Trump caught pretty much everyone by surprise, but it is far too late now to moderate the rhetoric. Repeal has been repeatedly promised and now, with control of both houses and the presidency, come January, the promise must be fulfilled regardless of the problems it might cause. There is no room for backtracking.
 

Are Republicans Serious About "Replace"? We'll Find Out Soon

To be fair, there are some real ideas out there on the Republican side about how to replace some provisions of the ACA. For example, various policy makers and conservative academics have proposed a variety of alternatives to the individual responsibility requirement, including continuous coverage, auto-enrollment and late enrollment penalty. Different ways to design financial assistance and minimum coverage are also possible (not to say that these alternatives would work better than the ACA). The problem is how these ideas interact with the "piggybank" scenario (see #2, above). Any serious alternative requires money. If the first thing the new Congressional leadership and incoming president do is pull a ton of money out of the system, it will be an early sign they are not serious about health policy and that repeal is just a stalking horse for transferring wealth up the income scale.
 

Now Is the Time to Speak Up!

It cannot be overemphasized that the threat to create chaos in health care for millions of Americans extends far beyond proposals to roll back the coverage gains made by the ACA. Enormous cuts to Medicaid are also on the table. Even Medicare is not safe, a fact underscored by the recent comments of Representative Tom Price, thought to be a leading contender for the top job at Health and Human Services under a Trump administration, who confirmed that the efforts to overhaul (aka cut) Medicare would begin in 2017. It is fair to say that there is no electoral mandate for these cuts to Medicaid and Medicare, but the American people may very soon find these programs at risk, nonetheless.

The takeaway is that while the ACA may be first on the chopping block, Medicaid and Medicare will follow closely behind unless we mobilize now to save these vital programs. Members of Congress are saying they aren't hearing from people complaining about repeal, so it’s crucial for all of us to raise our voices loudly right now.

How the voters thought about health care

The election is over and Donald Trump, to the surprise of most people (including, apparently, the Trump campaign team) will be the next president of the United States. Although this will have profound consequences for health policy, it does not appear that health care issues were a major factor in determining the outcome.

Certainly, health reform never became the political plus that proponents hoped it would be, but neither was it the albatross that critics claim it was. Opinions about the health care law have remained essentially stable and dominated by party identity since the Affordable Care Act (ACA) was passed. In addition, health care remained a second-tier issue throughout the campaign.

According to analysis by Robert Blendon at the T. H. Chan Harvard School of Public Health, a single core question – whether you believe the federal government should play a significant role in ensuring that people have access to coverage – was strongly associated with both your attitude toward the ACA and toward the presidential candidates. People remain largely uninformed about the details of the ACA. Their attitudes are driven by values, not the specific provisions of the law (many of which remain broadly popular).

One interesting correlation between health and voting was discovered by staff at The Economist. Counties with high rates of obesity, diabetes and heavy drinking and low rates of physical activity went heavily for Donald Trump. These voters, hit hard by deindustrialization and not benefiting from a rebounding economy, made up a small percentage of Trump voters. But they may have provided him with his margin of victory in key battleground states.

Turning from the electorate to policy that may flow from the outcome, the Affordable Care Act is a law that has had nine lives. But in the wake of Trump's victory it is now threatened like never before. Truly, the fate of the ACA per se is neither here nor there. The urgent question that confronts us now is how to preserve the coverage gains and financial protections that millions of people now enjoy. Twenty-two million people could lose their coverage outright if the ACA is repealed, but that is just the tip of the iceberg.

The ACA provides important benefits to millions of people who never even glanced at Healthcare.gov, such as protections against pre-existing condition exclusions and charging sick people more for their coverage, limits on rates charged to older adults, the bans on lifetime benefit caps and charging women more than men, and better access to preventive health services. All of these protections are at risk if the ACA is unraveled.

And the damage doesn't stop there. House Republicans have put forward the outline of a plan that would undermine coverage for millions of children, seniors and people with disabilities who depend on Medicaid. They have also proposed reducing benefits and increasing costs for Medicare beneficiaries.

 

Would you buy a used car from these men (sight unseen)?

For six years, Republicans have been talking about repeal and replace, but they have yet to coalesce around a replacement plan. Now Republican leaders in the House and Senate are pursuing a strategy of repeal now and replace later. They are proposing to light a fuse by repealing essential components of the ACA but delaying the effective date. Essentially, they’re saying, "Trust us we'll come up with something good to replace it before the bomb goes off."

But there is nothing in the past six years that should give people any confidence that Republicans can pull it off. A large cohort of Republican voters (and presumably their representatives) would be content to repeal the ACA and replace it with nothing. In addition, the overall intent of the Ryan blueprint, much of which is also reflected in Trump's policy agenda, seems to be to use health care programs as a piggybank to pay for (wait for it) tax cuts for the wealthy and increased military spending.

There is also a great likelihood that the "bomb" will go off early. Even if there is a delay in cutting funding for premium tax credits, insurers are less likely to participate. And the more uncertainty there is about the shape of any future system, the less likely healthy people are to sign up for coverage. This will drive premiums up and enrollment down.

 

Meet the real Donald Trump

President-elect Trump's position on these issues is unclear. During the campaign, Trump said a lot about protecting Medicare (and Medicaid). While he was clear about repealing the ACA, he often spoke about making sure people had better, more affordable coverage. Cynics might think that he was about as sincere as a snake oil salesman promising miracle cures. Certainly his recent embrace of "Medicaid flexibility" and Medicare modernization," both often code words for program cuts, is cause for concern. An early tip off as to his true intent will come as he positions himself relative to Congressional plans to repeal without having a replacement plan ready.

Once funding for premium tax credits and Medicaid expansion is repealed, it is no longer available to help finance a replacement plan. This means that whatever comes next will be much stingier than would be the case were that funding still available. Reduced funding will not only undermine coverage for the newly insured, it will also financially destabilize many providers and result in a large cost-shift to state government.

However, it appears that the incoming Trump administration is on board with the Congressional scheme making his promises to protect Medicare and Medicaid and replace the ACA with "something terrific" much harder to realize. Because separating repeal from replace would be so damaging, it is important to mobilize now against this approach. Republican leaders are hoping to hold a repeal vote in January in order to present a repeal bill on or near Trump's first day in office. Much of the health care community, including Community Catalyst, is now focused on opposing this plan to repeal the ACA without a replacement.

 

We the People

Donald Trump was elected by a minority of the electorate. Most people do not want to see the ACA repealed. They don't want to go back to the days when insurance companies could discriminate against people based on their health status. They don't want to cut health benefits for children, seniors, or people with disabilities. The challenge now is to ensure that the views of the minority do not undermine hard-won health security for millions of Americans.

With the musical “Hamilton” putting the American Revolution into popular consciousness, a couple of random bits of Revolutionary War trivia have recently popped into my mind. As the reality of Trump's upset victory sank in, I recalled the song that the British played as they surrendered to Washington at Yorktown—“The World Turned Upside Down.” But now, as the shock has worn off, I recall instead the words of John Paul Jones (the Naval hero, not the Led Zeppelin bass player): “I (we) have not yet begun to fight.”

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