US Policy Changes Vol.48 (Healthcare Vol.4)

Here are articles on healthcare. Excerpts are on our own.

Repealing Federal Health Reform: Economic and Employment Consequences for States (1/5/2017) | Leighton Ku, Erika Steinmetz, Erin Brantley, Brian Bruen @commonwealthfnd
see Exhibit 1~5
Findings and Conclusions: Repeal results in a $140 billion loss in federal funding for health care in 2019, leading to the loss of 2.6 million jobs (mostly in the private sector) that year across all states. A third of lost jobs are in health care, with the majority in other industries. If replacement policies are not in place, there will be a cumulative $1.5 trillion loss in gross state products and a $2.6 trillion reduction in business output from 2019 to 2023. States and health care providers will be particularly hard hit by the funding cuts.

The problems with ‘repeal and delay’ (1/3/2017) | @joeantos @AEI
…plan to move quickly to repeal the Affordable Care Act (ACA) in the early weeks of 2017, with a delay in the date of when key aspects of the repeal would become effective until perhaps 2019 or 2020. …
…too much risk of unnecessary disruption to the existing insurance arrangements upon which many people are now relying to finance their health services, and…unlikely to produce a coherent reform…
Possible Legislative Scenario
… Congressional leaders have mentioned using H.R. 3762 from the just-completed Congress as the blueprint for what they plan to do in the new year. H.R. 3762 was passed early in 2016 (and then vetoed by President Obama) using the budget reconciliation procedure, which allowed it to be approved in the Senate with a simple majority vote. …
… Only provisions that directly change taxes or entitlement spending can be included in such bills, which means H.R. 3762 could not repeal large sections of the ACA that are more regulatory than budgetary in nature. A partial repeal bill passed using reconciliation could put an end date on funding for the premium credits and cost-sharing subsidies provided in the ACA, and reduce the federal government’s payments to states that have adopted the ACA’s Medicaid expansion. … The repeal bill will almost certainly eliminate the tax penalty associated with enforcement of the individual mandate but is likely to delay repealing the tax credits and Medicaid expansion until at least 2019.
… The law’s current requirements regarding essential health benefits, and the prohibition on the use of a person’s health status by insurers when setting premiums or benefit offerings, were not altered in H.R. 3762; they could not be altered in a reconciliation bill taken up in 2017, either. …
Congressional leaders have said that they would move forward after enactment of the partial repeal bill with a replacement effort that could involve a series of bills rather than one large reform plan. …
Greater Instability With ‘Repeal And Delay’
… Thirty-six percent of the national marketplace is being served by only one insurer in 2017.
… Even if the number of those dropping out in 2017 is small, it will be lead to further losses for insurers, and make it even more difficult for them to justify continued participation in 2018. There is a real danger that many parts of the country would be left with no insurance plans at all offering coverage on the ACA exchanges in 2018.
… The political firestorm that would ensue from several million people losing their insurance could be enough to force the GOP to reverse course and take steps to provide some kind of emergency insurance for this population, which could be even more costly than the ACA. …
Steps To Stabilize The Exchanges Difficult To Enact
… The Obama administration has paid exchange insurers to reduce the level of cost-sharing for exchange enrollees with incomes below 250 percent of the federal poverty line. …
… Reinsurance is funded by a tax on insurers, with $20 billion in the first two years going to fund the program and $5 billion to go toward deficit reduction. Faced with a shortfall in revenue collection, the Obama administration used all of the funds for reinsurance and none for deficit reduction. …
A third… …the Trump administration might broaden the criteria used to exempt individuals from the penalty…
– Full and clear funding of the cost-sharing subsidies. …
– Funding and Extension of Insurance Risk Mitigation Features of the ACA. …
– Maintain the individual mandate’s tax penalties until the replacement plan is fully operational. …
… Until a new insurance structure is put in place, Americans without access to employer coverage have no other choice but to get coverage from ACA-regulated plans. However, years of GOP rhetoric denouncing the individual mandate, the subsidies for insurance companies, and excessive spending of the ACA will make it difficult for Republicans to pass a bill that includes the kinds of provisions that are needed to stabilize the existing market, even temporarily. …
Passing ‘Replace’ Becomes Much Harder Politically After Repeal
…the reconciliation bill…would have lowered federal spending by $1.4 trillion over 10 years, and reduced taxes by $1.1 trillion over the same period. The net effect would have been to lower the deficit by $317 billion over a decade.
… A replacement bill that provided assistance to low-income households, through either Medicaid or a refundable tax credit, would necessarily increase spending relative to the post-repeal baseline. For many in the GOP, it could be very difficult to vote for a bill that would increase spending by a few hundred billion dollars relative to the post-repeal baseline, even if the overall cost would be less than the ACA.
…cuts in Medicare and Medicaid are controversial, even among Republicans. … It seems certain that whatever is done will leave a replacement plan with far less budgetary space to work with…
The Plan To Pass Replace In Steps Signals There Is No Plan
News stories suggest Congress is considering moving forward with a replacement plan in a series of smaller bills rather than one big bill. This is a signal that Republicans in Congress may not have a clear vision of what they want to do.
…it is necessary to put together a coherent series of policies across Medicaid, employer-sponsored insurance, and the non-group insurance market. …

Paying for an ACA replacement becomes near impossible if the law’s tax increases are repealed (12/19/2016) | Loren Adler and Paul Ginsburg @BrookingsEcon
…repealing the ACA before replacing it would cause significant disruption in the individual health insurance market and risk imploding the market altogether if no replacement emerges – all but ensuring that millions of Americans who purchase their own insurance (many of whom had insurance pre-ACA) will become uninsured. …
TAX CUTS WILL ACCELERATE THE EXHAUSTION OF MEDICARE’S TRUST FUND
Specifically, the reconciliation repeal bill from earlier this year eliminated $680 billion (over ten years) of taxes on high-income households and the health care industry (e.g., insurers, device manufactures, and drug companies). In addition to increasing deficits, by rescinding the 0.9% Hospital Insurance Trust Fund payroll tax on wages above $200,000, these tax cuts would also accelerate the exhaustion of Medicare’s Part A Trust Fund by four years, from 2028 to 2024.
NOT ENOUGH MONEY LEFT FOR REPLACEMENT AFTER REPEALING THE ACA’S TAXES
…it would net roughly $500 billion in deficit reduction over the ten-year budget window. Lawmakers would likely create an “ACA replacement fund” with the bill’s deficit reduction – a sort of piggybank that they could subsequently tap into to pay for a replacement plan. It’s unclear how well this approach adheres to Congressional rules, but it is similar to how the “Medicare Improvement Fund” or “SGR Transition Fund” banked savings from one bill to help pay for increased Medicare spending in the form of “doc fixes”…
… Consequently, only about 40 percent of the $1.24 trillion cost of the ACA’s coverage expansion from 2019-2026 would be available.
… First, given recent budget scoring changes, lawmakers will likely count the roughly $200 billion of additional dynamic savings that ACA repeal produces (that is, CBO estimates that ACA repeal would slightly increase economic growth, and in turn revenues). …
Altogether, then, this relatively aggressive course of action could generate roughly $850 billion to fund an ACA replacement plan, still only two-thirds as much funding for coverage expansion as under the ACA. …
RECONCILIATION REPEAL BILL ALREADY INCREASES LONG-TERM DEFICITS
While the reconciliation ACA repeal and delay bill reduces deficits by roughly $500 billion in the first decade, it would actually begin adding to deficits around 2035 and be scored by CBO as increasing debt over the long run. This result occurs because the revenue lost from the bill’s tax cuts grows significantly faster than the savings from eliminating the ACA’s coverage provisions, although this is primarily due to one provision, the Cadillac tax on high-cost employer-provided health insurance plans. …

How to create TrumpCare and make it great (12/6/2016) | Alice M. Rivlin @thehill @BrookingsEcon
… Fortunately, the basic structure of the existing law features consumer choice among competing private health plans, which many Republican plans also espouse. This should give the framework strong appeal to market-oriented Republicans — once it no longer has President Obama’s name on it. ObamaCare offers those who do not have affordable coverage from their employment or other sources a range of choices on electronic marketplaces and income-related subsidies through the tax system to help them pay for their chosen plan. …
… But these popular features of current law, plus rules against charging older people more than triple the rate for younger ones made the Obamacare marketplaces difficult to sustain without repairs. …
… Republicans also complained that the law required covering benefits that not everyone needed (single men don’t want maternity coverage), did not allow bare-bones protection only against medical catastrophes, and did not give states flexibility to use their Medicaid funds to fund innovative solutions to achieving broader insurance coverage. …
… The challenge for the new team will be to craft a deal that relaxes the age rules to make it more attractive for younger, healthier people to buy at least bare-bones insurance and gives them strong incentives to enroll without an actual mandate; allows insurance companies to make at least a modest profit by off-loading some of the costs of the very sick onto subsidized reinsurance or high risk pools; and gives people who live in sparsely populated rural areas more options at affordable cost. …
… Interstate compacts to broaden insurance pools across state lines might play a role in cracking the perennial problem of covering rural areas, and other Republican favorites, such as health savings accounts and medical malpractice reform, should also be part of the package. …
…namely capping the exclusion of employer-paid health insurance benefits from taxable income…

Keeping tabs on a potential ACA repeal: Three questions to watch (11/15/2016) | @mollyereynolds @BrookingsGov
Do Republicans lay the necessary groundwork for a quick move in January?
…whether congressional Republicans actually adopt it in either the lame duck or early January will be a key signal of how quickly they plan to move.
Do Republicans follow the template from the 2015–16 “test drive”?
… Among the constraints created by the Byrd Rule are requirements that provisions are not “merely incidental” to deficit reduction, with the definition of “merely incidental” adjudicated by the Senate Parliamentarian. …
A second useful marker of how assertive Republicans intend to be involves the Medicaid expansion. …
How long do Republicans give themselves to come up with a replacement?
… Of the process of developing the plan, one Republican congressman said, “if you live in the Republican conference… I don’t think Jesus could get everyone to agree on everything.” …

Solving surprise medical bills (w PDF; 10/13/2016) | Mark Hall, Paul Ginsburg, Steven M. Lieberman, Loren Adler, Caitlin Brandt, and Margaret Darling @BrookingsEcon & @SchaefferCenter