Trump Has a New Health Care Opportunity: Our view

17201136_1131265140336477_6000204883258090829_nSince the Republican health care bill collapsed a little more than a week ago, President Trump’s White House has struggled with a path forward. Trump is dealing with finger-pointing and infighting that threatens to derail his agenda, as well as nagging Russia investigations on Capitol Hill that are raising more questions than answers about his team. President Trump says he has a new strategy to address problems with the Affordable Care Act. He is going to wait “to let Obamacare explode” and then wait some more to let the Democrats “come to us” so we can “make one beautiful deal for the people.”

But that is not a new strategy. It is waiting that created Friday’s legislative disaster in which Trump and House Speaker Paul Ryan poured all their political capital into a failed effort to repeal the 7-year-old law, only to have to abort the mission at the last minute.

When Democrats united to pass the Affordable Care Act in 2010, Republicans united in opposition but did not rush to come up with a plan of their own. But also remember that in contrast to the GOP, the Democrats spent 13 months painstakingly crafting and building support for the Affordable Care Act instead of “slapping together a bill in a few months.” Since taking control of the House 2011 and Senate in 2014, they have voted to repeal, weaken or delay the ACA dozens of times. But still they did not rush to come up with an alternative plan. When Trump rallied voters to win the presidency last year, he united them with vows to “repeal and replace” Obamacare. And neither he nor his transition team rushed to come up with an alternative. Trump and Ryan’s American Health Care Act was 18 days old when House Republicans killed it.

“The beauty,” Trump says of waiting for an explosion, “is that (the Democrats) own Obamacare.” Except it is Republicans who now own the federal government — the House of Representatives and the Senate and the White House — while they ask the American public to wait yet again for Republicans to come up with something, anything that they are actually for.

There is an alternative: Reach out to Democrats now. Drop the repeal-and-replace rhetoric. Try repair and rebrand instead. Work together to actually solve the real problems with our health care conundrum.

Some of President Trump’s rhetoric presaged just this approach, particularly his promises to get terrific health care for everybody and his vow to leave nobody worse off. He now has a ready-made opportunity to swoop in and “save” Obamacare. He should start working on that now.

He will have plenty of allies. The House Freedom Caucus, an all-or-nothing, my-way-or-the-highway group that has been a force for disruption since the birth of the Tea Party movement, got most of the ink and pixels during the GOP’s march to doom. But one of the most welcome revelations was the size and clout of the House forces of moderation. This group has the potential to grow in districts in which conservative voters have seen or experienced the value of insurance coverage made possible by the Affordable Care Act.

Democrats are no more eager than Republicans to see insurers quit markets and leave people in the lurch, or raise premiums and deductibles so high people can’t afford them. It would be nice if Republicans were equally enthused to expand coverage. Short of that, they should at least be interested in making sure existing coverage doesn’t erode. How best to achieve that?

There is plenty for Republicans and Democrats to discuss if both parties can focus on repair. For a start, Congress could restore some of the protections the ACA initially provided and Republicans have challenged, such as money meant to help people cope with high deductibles (“cost sharing reductions”). It also means more states expanding Medicaid, which leads to lower rates for private plans. It could mean more states creating reinsurance pools, which lower premiums by saving insurance companies money. It could mean finding a way to lower prescription drug prices and requiring transparent pricing of medical services. It does not mean repealing the tax increases and decimating Medicaid in order to cut taxes for wealthy Americans.

Insurance companies and the country at large will be looking for signals from Trump, Ryan and Tom Price, the secretary of Health and Human Services. Will they stand by and wait for Obamacare to explode? Will they intervene and make sure it does? Or will they work with a structure that is serving millions well and could be fixed for those it is hurting? A structure that originated with the conservative Heritage Foundation, came to fruition under Republican Gov. Mitt Romney in Massachusetts, and was so successful that Democrats used it as a model for national coverage?

Only option 3 will serve the country well. The sooner Trump stops waiting and starts working with Democrats and Republican moderates, the healthier the insurance markets — and Americans — will be.

“The Trump administration has a great deal of flexibility to make changes that don’t require congressional approval,” says Elizabeth Carpenter, a senior vice president at Avalere Health, a healthcare consulting company.

The changes could result in sharply higher premiums and less coverage for many. For example, Health and Human Services Secretary Tom Price has said he wants to water down regulations requiring insurers to offer comprehensive coverage in 10 areas, including maternity care, prescription drugs and mental health services.

Consumers already are worried they could be priced out of the market. In a recent nationally representative CR Consumer Voices Survey, 55 percent said they’re not sure they or their loved ones could afford insurance to get quality healthcare.

The GOP plan, called the American Health Care Act, appeared to be headed for a vote. But the controversial bill was causing defections from the conservative and moderate wings of the party, and ultimately GOP officials decided to pull the bill just before a scheduled vote.

“The American Health Care Act was pulled from the floor because it is a hugely flawed bill that would do nothing to lower healthcare costs for Americans,” said Laura MacCleery, vice president of policy for Consumer Reports. She added, “We are hopeful that today will be a wake-up call for Congress. Americans deserve real improvements to the care and coverage essential to our health and lives, not hurried, partisan politics.”

Without the help of Congress, President Trump is limited in how much he can change the ACA. But here’s a rundown of what his administration already is doing to reshape parts of the current law.

Taking Executive Action

Trump on his first day in office issued an executive order for government agencies to change, waive or delay Affordable Care Act provisions considered a “burden” to insurers, doctors, drug companies, patients and states. The vaguely worded order pointedly undercuts the ACA’s individual mandate.

The mandate requires most people to buy insurance or pay a penalty to the IRS ($695 per adult and $347.50 per child under 18 but no more than 2.5 percent of your gross income). In February, the IRS followed Trump’s order when it announced it would no longer automatically reject the tax return of someone who didn’t check the box confirming health coverage or fill out the form to pay a penalty. People who don’t have insurance still owe the penalty— but the IRS isn’t going to hold up your return if you don’t provide the information.

Another executive action took aim at the ACA’s most recent open-enrollment period. Just five days before the January 31 signup deadline, the Trump administration directed Health and Human Services to halt TV ads encouraging people to sign up and ended other outreach efforts.

“These moves show that the administration has the power to make changes without jumping through a lot of hoops,” says Sara Rosenbaum, a professor of health law at the Milken Institute School of Public Health at George Washington University.

Wielding Administrative Power

HHS Secretary Price has made it clear he will use the department’s regulatory authority to chip away at the ACA. Last month, his department created a special section on its website detailing the actions it has taken and what it plans to do.

One such rule would involve a stricter verification process for people who want to sign up for health insurance outside of open enrollment because they claim a life event, such as getting married or having a baby. This change could mean delays in getting enrolled quickly.

HHS has also proposed shortening the open-enrollment period from three months to six weeks. For this year, that means sign-up would run from November 1 through December 15. Last year, the enrollment period ran from November 1 through January 31.

Price has also said he would like to water down the ACA mandate that insurers cover 10 essential health benefits, including maternity care, prescription drugs, doctors visits, emergency room care, lab tests, and mental health services. The original bill left those essential health benefits in place, but last minute amendments in the just-pulled bill would have removed them.

Price can’t make the change without legislation, but he can issue new regulations that more narrowly define what coverage means. Is thatSmart?? Changes to the essential health benefit mandate could have a devastating effect, says Linda Blumberg, senior fellow in the Health Policy Center at the Urban Institute, a nonpartisan health and health policy research group.

If the essential health benefit rules do change, insurers could sell what used to be called “junk insurance,” which offers limited coverage and may not even cover major illnesses. “Your premiums may be lower, but if you need care, you might have to pay out of your own pocket to get what you need,” says Blumberg.

People with pre-existing conditions could have needed treatments left uncovered, forcing them to pay for expensive treatments out of their own pocket. “Yes, you can’t be denied insurance if you have a pre-existing medical condition. But if you have cancer, your insurer doesn’t have to cover chemotherapy, or if you have a hospital stay, they may only cover one day,” she says.

Unintended Consequences

Even though the GOP bill is in limbo, the ACA’s future remains unclear. Consumers could still end up with fewer choices as insurance companies try to figure out whether they’ll participate in the ACA exchanges next year, what coverage their plans will offer, and how much they’ll charge.

The uncertainty has already driven out some players. Humana announced in February that it would exit all 11 states where it offered ACA plans, leaving 16 counties in Tennessee without an insurer offering a plan on the exchanges. “If the federal government doesn’t step in, people in some places may not have access to any insurance on the individual market,” Carpenter says.

Other major insurance companies, including Anthem, Aetna and Molina Healthcare, have warned that they can’t commit to participating in the ACA exchanges in 2018. “Just neglect and lack of action can do enormous damage to the insurance market and the ability for people to get affordable access to care,” says Blumberg.

Here are a few possible changes:

  1. Cut off the subsidies

One of the biggest threats to the Affordable Care Act has been a lawsuit filed by House Republicans that could have ended what are called cost-sharing subsidies, which help people limit their out-of-pocket expenses.

As Kaiser Health News’ Julie Rovner reported last year, the suit, filed in 2014, “charged that the Obama administration was unconstitutionally spending money that Congress hadn’t formally appropriated, to reimburse health insurers who were providing coverage to working-poor policyholders.”

Last spring, a judge sided with House Republicans, but allowed the subsidies to remain in force pending appeal. With Trump’s election, his administration took responsibility for the appeal. Should the Trump administration decide to drop that appeal, it would be quick, easy and potentially crippling to Obamacare. That might sound like a simple decision for a president who detests Obamacare, but it could come with heavy political consequences.

“If they stop defending the litigation, then they have to stop reimbursing insurers for the [subsidies] and the markets would crater,” says Sabrina Corlette,a research professor at Georgetown University’s Center on Health Insurance Reforms. “It seems politically risky to think voters wouldn’t blame them for that. The Congress could step in and appropriate the money, but it’s hard to see that getting buy-in from the far right.”

Perhaps with those political realities in mind, some in the GOP now say they are willing to spend that money anyway. On Tuesday evening, after NPR spoke to Corlette, some top House Republicans said they wanted to keep the subsidies going.

  1. Remove the individual mandate’s teeth

The Trump administration can’t do away with the mandate requiring individuals to have health insurance on its own, but it can greatly weaken it. Doing so would be another way to seriously undermine the Affordable Care Act. One way is through the IRS. That individual mandate is about tax incentives — fail to get insurance, and you have to pay a penalty. So to hobble Obamacare, the Trump administration can decide not to enforce that penalty.

In fact, the IRS already took a small step in that direction earlier this year. The agency said it will not reject “silent returns” — tax returns on which a person declines to say whether they have insurance.The IRS explained in a statement that this year, for the first time, the agency had been set to reject those silent returns. But Trump’s January executive order on Obamacare changed that, telling the heads of executive branch offices to “waive, defer, grand exemptions from, or delay” parts of the act.

“Consistent with that, the IRS has decided to make changes that would continue to allow electronic and paper returns to be accepted for processing in instances where a taxpayer doesn’t indicate their coverage status,” the IRS said. “However, legislative provisions of the ACA law are still in force until changed by the Congress, and taxpayers remain required to follow the law and pay what they may owe.”

In other words, a lot still won’t change here — the penalties remain the law of the land. However, the IRS’ statement left considerable uncertainty about what enforcement would now look like, as the Society for Human Resource Management reported in February.

One other option here, Cox says, is that the Trump administration could loosen up the rules on who can get hardship exemptions. People with particularly tough circumstances — homelessness, domestic violence, and bankruptcy — can currently apply to get an exemption from any penalties for not holding insurance. The Trump administration could approve more people in more circumstances for those hardships, Cox says. (Likewise, the administration could also approve fewer people if it wanted to.) Were the administration to approve more waivers, it could mean fewer people in the marketplaces. And to the degree that that pulls healthy people out, it would create sicker pools that create more costly coverage, which in turn could cause more people to drop out.

  1. Let states be looser in defining “essential health benefits”

The ACA requires that health plans cover 10 “essential health benefits” — health services in basic, broad areas like emergency services, prescription drugs and maternity care. And the administration has a few paths for changing exactly what those are — changes that could weaken some people’s health care but also maybe nudge more insurers into the marketplaces.

The federal government lay out and defined the benefits (known among health care wonks as EHBs), but the nitty-gritty of a state’s essential health benefits can be found in its “benchmark plan.”

“Right now each state has picked a small group plan or similar plan that would have existed before the ACA and used that as a benchmark for what all the plans in each state now have to cover,” Cox says. The Trump administration could loosen that, giving plans much more wiggle room for what services they include or exclude, Cox added. “Price could come back in and say, ‘We’ve changed how each state can define their [essential health benefit] plan as long as it looks reasonably like an employer plan,’ ” she says.

  1. Redefine the EHBs

The administration could also simply tweak the EHBs by broadening or narrowing the definitions of some of the 10 broad benefit categories. For example, one of the 10 benefits set by law includes preventive care. But the law itself didn’t say exactly what that meant — rather, the Obama administration defined what exactly preventive services are through regulation.

That means the Trump White House could undo some of that through regulation, making particular benefits disappear. Contraception, for example, is a part of the preventive service EHB, and the Obama administration also made sure that in many plans, that birth control is copay-free. HHS Secretary Tom Price has opposed that rule in the past.

Once again, loosening rules around essential health benefits could reduce the kinds of things people get coverage for, but it could also potentially nudge more insurers into a state’s exchanges, Cox says. That could address a key Obamacare problem: Some areas of the country only have one insurer in their marketplaces.

  1. Let states experiment more

States can apply for waivers to deviate from the ACA as written in some way — the idea, Cox says, is to “allow for some experimentation or innovation at the state level” to improve the system. States could pass laws that change their health care system, then apply to the federal government for the waiver.

Price has promoted waivers as ways for states to alter their health care systems. Under a Trump administration that’s no fan of the ACA, approved waivers might look substantially different than they would have under Obama. For example, California had passed a law and filed a waiver that would have allowed people in the state illegally to get health insurance on the state exchange (though they would not have been allowed to get federal subsidies). When Trump won the presidency, California withdrew the waiver.

An administration so opposed to illegal immigration likely wouldn’t have approved that kind of change. But the Trump administration might be more open to conservative tweaks. One example might be in states that didn’t expand Medicaid, and now have higher premiums and more unhealthy people in their individual market, Cox says. The idea here is that sicker people could have moved out of the exchanges and into Medicaid, had those states opted into a Medicaid expansion offered to them under Obamacare.

“There may be some conservative states where they are allowed to expand Medicaid if they have work requirements — waivers or exemptions that the Obama administration would not have allowed,” she added. Likewise, Alaska has already passed a law and filed a waiver creating a reinsurance program — in a basic sense, a pool of money that comes from insurers and helps pay for particular health conditions. Obamacare had something similar for a three-year transition period — insurers paid into a pot, which then reimbursed insurers for people’s medical costs that were particularly high, between $45,000 and $250,000. Price highlighted this effort in his statement, signaling to other states that they could potentially get approval for their own reinsurance plans.

  1. Let the architecture crumble

It takes a lot of upkeep to keep Obamacare running — the exchange websites need to hum along, and people need to be ready to answer the helpline. But the administration could hypothetically make a lot of that a lower priority, Georgetown’s Corlette says, essentially letting the Obamacare system atrophy. “The Price administration [at HHS] can redirect resources so they would have a fair amount of flexibility for how they direct resources for the fall enrollment,” Corlette says.

In his first week on the job, Trump killed the advertising surrounding the Affordable Care Act, as well as outreach, as Politico explained: “Emails are no longer being sent out to individuals who visited, the enrollment website, to encourage them to finish signing up. Those emails had proven highly successful in getting stragglers to complete enrollment before the deadline.” Take all of this to its logical conclusion, and even these fixes could lead to a sicker mix of people in the markets. “If you’re a sick person, you’re going to do whatever it takes to get that coverage,” Corlette says. “You will sit on the phone for two hours. You will hit the refresh button. If you’re healthy, you’re going to say, ‘Forget it.’ ”

Let’s get it together and work together and get over the fact that the GOP can’t come up with a health care bill better than the ACA, but together with the Democrats, in a bipartisan “fashion”, can work together and fix the real problems with our health care system.

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