Today, Thorn Run’s Billy Wynne published a post on the Health Affairs blog gleaning lessons from the demise of American Health Care Act and envisioning steps forward.
The blog post challenges the narrative of inevitability on repeal and replacement of the Affordable Care Act (ACA), considers the essential role of stakeholders, looks at the ACA’s original incorporation of some conservative ideas, and highlights how the locus of control is gravitating to Secretary Tom Price and the Department of Health and Human Services’ regulatory authority. Finally, the post suggests possible bipartisan approaches — both legislative and regulatory — that could chart a path forward on health policy.
The blog post is included in full below.
Five Lessons From The AHCA’s Demise
March 27, 2017
While the keyhole of history has had insufficient time to bring the failed launch of the American Health Care Act (AHCA) into focus, it’s not too soon to begin learning some of the lessons it can teach us. Legislative efforts have a lifespan but our health care system does not. So whether we are still rejoicing or recriminating, let’s take a look at some timeless principles we can apply to the ongoing effort to improve health care in the United States.
1. Nothing Is Inevitable
Remember how we were all told Affordable Care Act (ACA) repeal would be on the President’s desk on Inauguration Day? After all, Republicans had already voted for it several dozen times, most recently in January 2016 in an attempt to override President Obama’s veto. Now that they had control of the White House, what could stop them?
As I pointed out in my Health Affairs Blog post last December predicting ACA repeal would fail, however, there’s a difference between making a political statement and enacting real policy. The latter is invariably complex and time-consuming, creating vulnerabilities and pitfalls both known and unknown at the outset. While a cornerstone of tried and true policymaking is to leverage the “strategy of inevitability”—more than seven years ago, the ACA campaign itself vigorously deployed just such a strategy—the underlying premise of that strategy is always inherently false.
So the next time someone tells you you’ve got to “get on board” because a certain bill is guaranteed to pass, you’ll know you have other options, and that person probably knows it too.
2. Stakeholders Matter
While, in my prior piece, I did lament the health care community’s dormancy in the aftermath of the November 8 election, I also anticipated that it would eventually wake up to resist broad ACA repeal. And resist we did. Virtually every hospital and hospital group, every physician group, nurses, patient groups representing the young, old, disease-stricken, and disabled, and many others fervently opposed AHCA. They added analysis of AHCA’s impact on them, as Governors did regarding its impact on their states. At the end of the day, this was simply a bad bill. Stakeholders figured it out and acted when it counted.
Republicans in Congress, believing they had a political mandate to move quickly, truly thought they could ignore these objections. But the stakeholder message spread and town halls filled up; protests lined district offices; opposition letters, phone calls, and tweets, poured in. Ultimately, on the day AHCA was originally supposed to get its final House vote, a Quinnipiac University poll came out showing only 17 percent of the public supported the bill, while 56 percent opposed it, a startling gap rarely seen in any bona fide political polling.
By the time Republicans realized they had to start paying attention to stakeholder concerns, it was too late. The bill was already drafted and introduced and, as the White House and House leadership repeatedly threatened, members were going to be forced to vote ‘up’ or ‘down.’ Clearly, for too many by then, ‘down’ was looking like a better choice than ‘up.’
3. The ACA Stole Most Of The Good Conservative Ideas
While it was lambasted by Republicans as the manifestation of a Marxist dystopia, the truth of the ACA is that it is a very moderate law. This one is personal for me. As Health Policy Counsel to then-Finance Committee Chairman Max Baucus in the prelude to President Obama’s election, I know the pains he took to build bipartisan consensus. In 2008, he negotiated with Republican counterparts on reforming the market for small businesses, in what became the SHOP Act component of the ACA (drawing from legislation originally co-led by Republican Olympia Snowe). He convened an all-day, fully bipartisan Prepare to Launch summit to query experts and debate ideas. He released a series of white papers that laid out detailed policies he believed could gain bipartisan support (welcomed by the conservative Heritage Foundation as “a starting point for serious discussion”). And all of that was before President Obama was elected.
While all Republicans eventually defected from the cause—and they of course are much better suited to explain why—Chairman Baucus nonetheless persevered with crafting legislation that included a wide array of traditionally conservative strategies (and suffered for it on the left). The centerpiece of the ACA became tax credits for the purchase of commercial—not government—health insurance, with a tax-driven mandate that everyone take responsibility for buying in. This had been the linchpin of numerous Republican health reform proposals prior to that time. While Medicaid expansion was also included, it took on a greater role only because that is a less costly way to expand coverage, and Democrats were utterly committed to ensuring the bill did not increase the deficit. (In fact, it was “scored” by the Congressional Budget Office as reducing the deficit by about as much as AHCA would have.)
Other key conservative ideas were embedded in the law as well. Numerous new payment reforms were instituted to drive efficiency and lower costs; states were allowed to pool their markets (though notably none have yet); price and value transparency was instituted so consumers could compare their coverage options side-by-side; emphasis was placed on prevention and community health centers; states were free to run their own exchanges and establish their own essential health benefits; dozens of new program integrity and oversight protections were instituted.
With all of these ideas enacted in the ACA, where did Republicans have to turn for “A Better Way”? Nowhere, really, as we saw with AHCA, which would have increased the ranks of uninsured by 24 million, increased premiums for comparable coverage, and drastically increased consumers’ out-of-pocket costs. In the waning hours, conservatives even pushed to eliminate all of the ACA’s consumer protections: guaranteed issue, the ban on pre-existing condition exclusions, the ability to retain dependent coverage up to age 26, etc., as the only way to make AHCA work. If AHCA represents what’s left of conservative ideas to improve health care post-ACA, it prima facie demonstrates there are scant such ideas left.
4. Tom Price Is Now The Most Important Person In Health Care
While the Trump Administration has some more thinking to do before it commits to letting our health care system crash and burn, via sabotage or neglect, it certainly has that power. The locus of that power is the Department of Health and Human Services and its Secretary, former Republican Congressman Tom Price.
As we have already seen, simple maneuvers like pulling publicity for HealthCare.gov and creating an aura of uncertainty can adversely impact insurance enrollment. Payment and delivery system reforms, intended to lower costs and improve quality, have been halted in their tracks. Governors have been informed that they are now freer to impose premiums and increase cost-sharing for Medicaid enrollees.
As destabilizing as these changes are, they pale in comparison to some of the more nuclear options Secretary Price has at his disposal to wreak havoc on health care. Perhaps the foremost of these, and the one readily accessible at any moment, is the option to refrain from defending the cost-sharing subsidies included in the ACA, as disputed in House v. Burwell (now House v. Price).
If the existing administrative mechanism for maintaining the subsidies is struck down by courts, and Republicans in Congress continue to refuse to appropriate funding for them, families making as little as $16,020 per year will see their out-of-pocket costs go up by as much as $9,600, rendering care unaffordable. Hospitals and other providers’ bad debt will skyrocket and many insurers will exercise their option to exit the market. Several other regulatory avenues to dismantling key components of the ACA are surely already being devised for Secretary Price’s consideration. But he does not have to act on them.
5. Bipartisanship Is Still Possible
There really is a better way, and it’s for both parties to come together to forge durable improvements to our health care system. While not as expedient or gratifying to the inner ideologue inside us all, the long, frustrating work of compromise is the only viable path forward.
There is a lot of lower-hanging fruit and we should give AHCA credit for bringing some of those to people’s attention. Insurers have now made clear what they think will help stabilize markets and perhaps make them more competitive, including funding risk corridor and reinsurance programs. Meanwhile, several start-up health plans are eyeing a wide array of markets where competition is limited and ripe for a lower-cost competitor. Some have faced obstacles at the state-level, undoubtedly due in part to the objections of entrenched interests. Can a Price-led HHS help open up these markets?
At the same time, more can be done to help small businesses, where coverage rates still run behind other sectors. Beefing up their tax subsidies would help, but so might allowing them to pool together in creative ways. Conservatives want to help employees shop for coverage with a fixed employer contribution. Maybe businesses and labor unions will go along with some reform to the incredibly costly and regressive subsidy for employer-sponsored insurance in exchange for promoting this “private exchange” approach if it is equitably designed.
Health savings accounts (HSAs) and their corresponding high-deductible plans draw objections from the left as regressive and ultimately imposing higher out-of-pocket costs, which can deter necessary as well as unnecessary care. Can restrictions on HSAs be relaxed and reformed to make them more beneficial to working families who need them most? All sides are going to have to set aside our traditional bogeymen and political talking points if we’re going to make real progress.
On the regulatory side, state innovation waivers via section 1332 of the ACA and the historical section 1115 Medicaid waiver process are at our collective disposal. If states can present reforms that actually improve care and reduce costs, who will object to that? You are going to be hearing these two numbers a lot in the coming months. We need to pay about as much attention to them as we did to AHCA.
I also don’t think Democrats will revolt over repealing some of the ACA’s taxes or, especially, the reimbursement cuts to providers that have yet to be imposed, like those to Medicaid Disproportionate Share Hospital (DSH) payments. Maybe some small victories will help build momentum.
There are going to be a lot more ideas to come. Even in the near term, opportunities abound to move them forward. Congress must reauthorize the Food and Drug Administration user fees (affectionately referred to as the “UFAs”) this year. The committees of jurisdiction want to keep these measures “clean,” for good reason, but even swift movement on those could create some tailwind. A broad batch of expiring Medicare policies that help rural providers, health plans directed at those most in need, clinicians whose services would otherwise be capped, etc., also come due this year. Most importantly, the Children’s Health Insurance Program (CHIP) must have new funding authorized by September or it will lapse. Getting these tasks done is imperative but they also create some opportunity to stabilize and improve our system that ought not be missed.
I admit, this probably sounds a little pie-in-the-sky at the moment. I’m essentially proposing we create a political “safe zone” where thoughtful leaders on all sides can work together on health care without fear of mass partisan retribution. Here too stakeholders (and by that I ultimately mean voters) matter. If we can’t set aside the gotcha game then our elected officials definitely won’t.
Democrats learned a tough lesson through a seven-year political free fall. Republicans are learning it now from the disastrous failure of AHCA. The real lesson isn’t that bipartisanship is possible in health care. It’s that it’s the only way.