Affordable Care Act: Exit, Stage Right
Last Updated Thursday, February 2nd, 2017
The rollback of the Affordable Care Act (ACA) is underway. Within hours of taking the oath of office on January 20, President Donald Trump signed an executive order that undermines enforcement of Former President Barack Obama’s signature legislation. Just a week earlier, the GOP-led Senate and House voted to start the process of repealing the ACA using the reconciliation process (SIDEBAR). It’s safe to say the ACA is being shown the door.
If the ACA is successfully repealed, what will take its place? There seems to be little agreement on that matter, as well as on how a new health-care system will affect insurers, physicians, and patients. Will the next version of American health care indeed be a total replacement of the ACA, or just a reshaping to accommodate more conservative views? Could the United States – the only one of the 34 counties included in the Organisation for Economic Co-operation and Development (OECD) without universal access to health care – finally find a way to provide “insurance for everybody,” one of President Trump’s stated goals? And, perhaps most importantly, will the replacement come swiftly enough to prevent the panic and chaos that might erupt when the current system is revoked (or falls apart because of uncertainty, defunding or lack of enforcement)?
Here, ASH Clinical News attempts to gain greater clarity on a markedly unclear and complex process, and to understand how these potential changes could affect hematologists and their patients.
ACA and Hematology
The passage of the ACA has been credited with bringing health insurance to an estimated 20 million previously uninsured Americans, dropping the country’s uninsured rate from 16 percent to 9 percent.1 Still, in an era of hyperpartisanship, the ACA has faced a difficult implementation, and half the country has rejected it, citing its failure to stop insurance companies from limiting access to health care and raising premiums and deductibles.
From multiple perspectives, though, the ACA has benefitted patients with blood disorders through Medicaid expansion and insurance exchanges. These diagnoses frequently carry high price tags and require intensive follow-up; the ACA helped by prohibiting insurance companies from limiting coverage or denying coverage based on pre-existing medical conditions and by eliminating lifetime caps on payment.
Anecdotally, Joseph Alvarnas, MD, chair of ASH’s Committee on Practice and director of Value-Based Analytics at City of Hope National Medical Center in Duarte, California, has witnessed how the ACA has improved the delivery of services to hematology patients. “When I speak to my colleagues, both from City of Hope and at Kaiser Permanente or Kaiser partner facilities, we talk about how expanded coverage has improved care – people are getting diagnosed earlier, referral patterns are more timely, and delivery of care is more consistent.”
Because the ACA is so new, though, there are few data to unequivocally support these assertions. He noted that, “given the nature of how portions of the ACA were implemented, it’s hard to see complete and universal improvements in care access and subsequent care delivery for patients with blood disorders.”
A few of the legislation’s promises have fallen flat. The out-of-pocket maximum limits provision, for instance, promised to cap the amount of money an individual would pay for covered services in a year; however, “loopholes” in the provision have compromised its effectiveness. First, these limits apply only to “essential health benefits” (the 10 categories of coverage all insurance policies must include) and do not include many of the costs incurred by patients with hematologic disorders, including monthly premiums, balance billing amounts for non-network providers, and the money spent on some medications.
Most individuals with chronic hematologic conditions will likely reach their limits quickly, meaning they may have to pay up to $7,150 (according to 2017 calculations) within the first few months of every year they need treatment, plus monthly premiums. Also, since the ACA networks are narrow – and becoming narrower in many states – patients are sometimes forced to seek non-network care, adding to their out-of-pocket costs.
ACA opponents contend that the high deductibles and narrow networks have actually reduced access to doctors and hospitals; in particular, they have focused on patients’ inability to maintain continuity with their physicians in the face of network restraints.
“Malignant and nonmalignant hematologic disease require expensive care,” Suzanne Leous, director of Government Relations and Practice at ASH, told ASH Clinical News. “Making sure annual and lifetime out-of-pocket limits are upheld in the new legislation is vitally important for hematology patients – and something ASH strongly supports.”
Each year, ASH identifies key areas of advocacy. This year, ASH is hoping to see the following issues resolved with any new health-care legislation:
- finalizing the budget for fiscal year 2017 and 2018, which will set funding for medical research and other important public health programs
- chemotherapy parity for oral agents
- adequate reimbursement for cognitive physicians and guaranteed reimbursement for preventive care (including patient education, psychological services, nutrition, and exercise physiology)
- ensuring that expensive hematologic treatments are not placed in higher tiers where they require coinsurance rather than a copayment
- allowing Medicare to negotiate drug prices with industry
These issues will all be on the agenda for the ASH’s Committee on Government Affairs and Committee on Practice’s annual “Hill Days,” when committee members visit congressional offices to advocate for legislation supporting these initiatives. For more on ASH’s advocacy efforts, and how to get involved, see the SIDEBAR.
“At this point, all of us just want to make sure that there is affordable, high-quality health care available for all Americans – many of whom are afflicted with cancer and other hematology disorders,” said Ms. Leous.
What to Expect When You’re Expecting an ACA Repeal
Despite the apparently widespread acrimony about the ACA, there are parts of the legislation that are universally popular – even among those who consider the overall plan a disappointment. A recent Kaiser Health Tracking Poll found that many Trump supporters agreed with the provisions outlined in the ACA.
Here’s a rundown of what replacement legislation is likely to keep, what it is likely to toss, and what is still up for debate.
On the Way Out
Falling along party lines, Republicans are opposed to the increased regulations imposed by the ACA, both on insurers and on consumers. Conservatives would like to structure a plan in which people pay for only the coverage they want. Insurance companies in this situation would function more like a free market; ideally, competition would increase and costs would decline for both insurers and the government.
The ACA’s individual mandate and the Essential Health Benefits program have always been unpopular among Republicans, who argue that these provisions limit personal liberties and cost the government billions in subsidies. Proposed Republican plans require patients to maintain continuous coverage to avoid being dropped or charged for a pre-existing condition (based on the assumption that people could be charged more if they try to obtain insurance only when they are sick). They also allow insurers to charge consumers based on their risk/cost status, which the ACA did not allow, except according to age and tobacco use. This provision could inflate insurance costs for hematology patients who frequently require expensive care.
Here to Stay
Most Republicans are in clear agreement about certain provisions of the ACA they’d like to keep, such as prohibiting insurers from denying coverage due to pre-existing conditions. This is an issue of particular importance to the hematology community, as many of these disorders are considered pre-existing.
“Before, people with hemophilia or a prior history of leukemia had a snowball’s chance in hell of getting health insurance. If they did get it, the cost would be exorbitant or the coverage inadequate,” Dr. Alvarnas recounted.
The ACA addressed this coverage gap and, as far as can be discerned at the time of this publication, the dismantlers of the ACA intend to maintain the provision.
According to GOP legislators’ remarks, they also plan to keep the provision that allows adult children to stay on their parents’ insurance plans until age 26.
Moving away from fee-for-service systems and toward value-based care that emphasizes care coordination and penalizes providers for preventable hospitalizations has also garnered bipartisan support.
Up for Debate
Since the ACA’s implementation, millions of people who would have been uninsured have gained coverage, largely due to Medicaid expansion, which has been credited with 63 percent of the coverage increases.2 President Trump and the Republican party prefer block-grant funding of Medicaid, which would give each state a finite sum of money and allow it to fund Medicaid as it determines appropriate.
“This is worrisome too,” said Ms. Leous. “Patients in states that fund Medicaid with comprehensive health benefits will be fine, but patients in other states that tend to cut Medicaid funding or limit the benefits package could be negatively affected. If you have a patient on Medicaid but it’s not funded adequately, where does that leave the patient?”
And finally, it should be no surprise that the U.S. Food and Drug Administration and the pharmaceutical industry have not escaped the attention of a populist president. The slow pace of drug approvals and higher drug prices in the U.S. compared to in other countries have received plenty of coverage in the press, and are undoubtedly on the mind of health-care professionals and their patients.
A Waiting Game
What will this piecemeal repeal and replace approach do to the American health-care system? No one quite knows, but Former President Obama expressed his trepidations in an editorial in the New England Journal of Medicine, arguing that repealing his signature legislation before deciding on a replacement could endanger many Americans.3 “What the past eight years have taught us is that health-care reform requires an evidence-based, careful approach, driven by what is best for the American people,” he wrote. “That is why Republicans’ plan to repeal the ACA with no plan to replace and improve it is so reckless. … Policymakers should develop a plan to build on what works before they unravel what is in place.”
“Congress can take a responsible, bipartisan approach to improving the health-care system. This was how we overhauled Medicare’s flawed physician payment system less than two years ago,” he continued. “I will applaud legislation that improves Americans’ care, but Republicans should identify improvements and explain their plan from the start – they owe the American people nothing less. … Policymakers should therefore abide by the physician’s oath: ‘first, do no harm.’”
Day 1: 18 Million Uninsured?
As a candidate, Trump put forth his “Contract With the American Voter,” in which he guaranteed a “100-Day Plan to Make America Great Again.”4 Included in that plan was the promise “to repeal and replace Obamacare Act,” with a plan that:
fully repeals Obamacare and replaces it with Health Savings Accounts, the ability to purchase health insurance across state lines and lets states manage Medicaid funds. Reforms will also include cutting the red tape at the FDA: there are over 4,000 drugs awaiting approval, and we especially want to speed the approval of life-saving medications.
The finer details of that plan have yet to be elucidated. The ACA, which amounts to thousands of pages of legislation, has directly provided health coverage to nearly 20 million previously uncovered Americans and has affected the insurance coverage of many million more through multiple statutes and regulations. How can it be dismantled without stranding people without coverage or leading to mass confusion?
The Congressional Budget Office’s report claims that millions of individuals will lose their medical coverage if the ACA is repealed.5
While the new president and the GOP have boldly started the process of unwinding the ACA well before any replacement product is ready, President Trump and many Republican members of Congress appear unwilling to finalize a repeal in the absence of a new plan. Others worry that the abrupt moves taken thus far might have the unintended consequence of leaving large numbers of individuals without insurance – or at the whim of an insurance industry without government protection. What these actions have not done is send a signal that the move to post-ACA health care will be anything close to orderly.
President Trump started by making it clear to the government he now controls that he doesn’t want the ACA to be enforced. As his very first act in office, he signed an executive order urging agency heads (pending a repeal of the ACA) to “exercise all authority and discretion available to them” to waive or delay any ACA provisions that are deemed onerous to individuals, states, or insurers.
The broader significance of this act is yet to be determined (as of press time): It may be an attempt to make good on campaign promises to roll back the ACA on day one, or it could mean that the insurance exchanges are about to fall apart. It’s a fair guess, though, that the individual mandate, the rule that penalizes people for not buying insurance (and the most contentious part of the law), has effectively been gutted.
Dr. Alvarnas, for one, fears that, if the imperative to purchase insurance is eliminated, many of the healthy individuals who were forced to buy insurance may cancel their policies. Such mass cancellation would collapse the exchanges. “The insurers are there to make money, so if there’s instability in the marketplace, it creates significant doubt as to the viability of what they’re doing. They’ll drop out when that happens.”
Whether this edict will indeed allow the insurance companies to drop contracts that have already been signed for 2017 is unknown.
“Everyone is watching the news from Washington with great anxiety and great anticipation,” Dr. Alvarnas said of the quickly moving changes coming to American health care. He feels certain that some of the stated goals and requirements voiced by the new administration regarding health care, taxes, and the economy, though, are “mutually irreconcilable.”
“The president has promised a trillion-dollar investment in infrastructure, tax cuts and tax reform, a balanced budget, and health care for everyone who has it today,” Dr. Alvarnas said. “Can all four of those things be possible?”—By Debra L. Beck
- Cohen RA, Martinez ME, Zammitti EP. Health insurance coverage: early release of estimates from the National Health Interview Survey, 2015. Hyattsville, MD: National Center for Health Statistics, May 2016.
- Frean M, Gruber J, Sommers BD. Disentangling the ACA’s coverage effects — lessons for policymakers. N Engl J Med. 2016;375:1605-8.
- Obama BH. Repealing the ACA without a replacement — the risks to American health care. N Engl J Med. 2017 January 6. [Epub ahead of print]
- Donald Trump’s Contract With the American Voter. Accessed January 19, 2016 from https://assets.donaldjtrump.com/_landings/contract/O-TRU-102316-Contractv02.pdf.
- Congressional Budget Office. How Repealing Portions of the Affordable Care Act Would Affect Health Insurance Coverage and Premiums. January 2017. Accessed January 19, 2016 from https://www.cbo.gov/sites/default/files/115th-congress-2017-2018/reports/52371-coverageandpremiums.pdf.
Repeal or “Death by a Thousand Cuts”?
Repeal means repeal. Depending on whom you ask, though, it could mean reconciliation, or partial repeal, or repeal and delay.
On January 12, 2017, the U.S. Senate voted 51 to 48 to repeal the ACA – the first in a long series of steps down the road to full repeal. This vote didn’t seal the fate of the ACA, however; the Senate instead passed a budget resolution to begin the process, known as reconciliation. A day later the U.S. House of Representatives also passed a budget that prepares the way for repeal, leaving an actual repeal still several steps away.1
Created by the Congressional Budget Act in 1974, reconciliation is a process that allows lawmakers to pass a budget bill with only a simple majority (which the Republicans have without needing any votes from the Democrats), meaning the bill is not subject to filibuster in the Senate. Reconciliation also exists in the House but, because it regularly passes rules that constrain debate and amendments, the process has less effect on its workings.
Reconciliation has strict rules and limits that may complicate plans. First, only provisions that directly change taxes or entitlement spending can be included in a reconciliation bill.2 Second, such a bill cannot eliminate or amend the regulatory (non-budgetary) parts of the law, such as the ACA’s rules regarding insurance regulation.
A full repeal would most likely remove the tax penalty associated with the individual mandate, without changing the requirements for the Essential Benefits provision or the pre-existing conditions clause. A partial repeal, though, signals that legislators intend to kill the bill slowly and surely.
“I don’t think this is going to be an all-or-nothing vote, but rather ‘death by a thousand cuts,’” Dr. Alvarnas predicted. “The Senate will probably start to strip out the things that have been unpopular with Republicans. If those elements continue to be undermined, legislators will have subverted the sustainability and viability of the law – effectively getting rid of it.”
- Bryan B. Here’s the 10-step process that the Republicans will use to repeal Obamacare. Business Insider, January 12, 2017. Accessed January 20, 2017 from www.businessinsider.com/obamacare-repeal-process-senate-vote-2017-1.
- Antos J, Capretta J. The problems with ‘repeal and delay.’ Health Aff. 2017 January 3. [Epub ahead of print]
Become an Advocate in Support of Hematology
ASH is the leader, both on Capitol Hill and within federal agencies concerned with the study and treatment of blood-related diseases, in representing the interests of scientists and clinicians working in the field of hematology. Through the ASH Grassroots Network, the ASH Advocacy Leadership Institute, and the ASH Congressional Fellowship Program, the Society urges members to bring issues important to the future of hematology to the attention of the U.S. Congress and federal agencies.
The ASH Advocacy Leadership Institute was created in 2011 to provide additional opportunities for ASH members to learn more about advocacy, health policy, and the legislative process, and to become more engaged in the Society’s activities. This two-day leadership workshop is an opportunity for members to gain a better understanding of the Society and its activities and to learn about legislation and health policy affecting hematology research and practice. The first day of the Institute focuses on learning about the legislative process and health policy; it includes training in the policy-making process, advocacy, and media relations. Sessions feature guest speakers from Congress, the Administration, and the National Institutes of Health (NIH), as well as other health agency officials. On the second day, participants visit their respective congressional delegation on Capitol Hill to apply what was learned on the first day. Visit the ASH website (hematology.org/Advocacy/ALI) for dates and information on the nomination process for the next Advocacy Leadership Institute.
The ASH Congressional Fellowship program provides education about the policy-making process, including Congress’ relationship to the hematology community. Additionally, the fellowship is an opportunity to educate Congressional members and staff about hematology. The fellowship allows a hematologist to work in a congressional office on Capitol Hill and help shape health care and hematology policy for an academic year. Visit the ASH website (hematology.org/congressionalfellowship) for more information.
Also, ASH members are encouraged to visit the ASH Advocacy Center at hematology.org/takeaction for information about the Society’s advocacy campaigns and to join the ASH Grassroots Network. Members of the ASH Grassroots Network receive action alerts and information about issues in which they indicate interest. At times, Grassroots Network members are invited to represent hematology in activities such as visits to Capitol Hill and meetings with leadership at NIH and other regulatory agencies.
If you have any questions about the ASH Advocacy Leadership Institute, the ASH Congressional Fellowship, or the ASH Grassroots Network, please contact ASH Legislative Advocacy Manager, Tracy Roades, at [email protected].