TRP’s Shea McCarthy Discusses Political Dynamics of Healthcare Reform in 2018

In an Inside Health Policy article published yesterday, Thorn Run Partners Senior Vice President Shea McCarthy discussed the next steps for Republicans in Congress on healthcare reform, as well as the politics of Affordable Care Act (ACA) replacements in the upcoming 2018 midterm elections.  “With health care promising to be a top issue for voters again in 2018, Republicans in Congress are prone to tread lightly on anything that could potentially alienate their base,” said McCarthy. McCarthy said that this dynamic is likely to translate to more rhetoric over "repeal and replace" and the shortcomings of ACA, as well as a focus on Graham-Cassidy as a primary ACA replacement plan. "While some in the GOP will suggest that repeal of the individual mandate will necessitate market stabilization reforms this year, many more see it as an incremental step towards Graham-Cassidy,” said McCarthy. 

The article can in its entirety can be read below. 

Collins Aims To Pass ACA Stabilization Bills Before 2019 Rate Increases

 

Sen. Susan Collins (R-ME) said that even though congressional leadership did not meet her year-end deadline to pass Obamacare stabilization legislation, she now hopes Congress will pass the legislation before premiums rise in 2019 as a result of the tax law's individual mandate repeal. Collins also said she is now willing to work with other, more conservative, Republicans to shape and pass the legislation as soon as possible.

“I think there’s an interest in making sure that some ideas of House members are incorporated,” Collins told Inside Health Policy of the Alexander-Murray market stabilization bill and the Collins-Nelson reinsurance legislation on Wednesday (Jan. 3).

The Maine senator, whose approval for the tax bill hinged on garnering White House and GOP Senate leadership support for the stabilization bills, said she most recently spoke with House Speaker Paul Ryan (R-WI) about the bills on Christmas Eve and is having ongoing conversations with leadership and the administration.

House Republicans, most notably the House Freedom Caucus, fiercely opposed the Obamacare stabilization bills and have thus far prevented them from reaching the House floor.

But, House Freedom Caucus Chair Mark Meadows (R-NC) has said he would be more willing to look at the bills if they included expansion of Health Savings Accounts. Other House Republicans have voiced their support for delaying the ACA's employer mandate.

Collins also said she expects a new Congressional Budget Office score of her reinsurance legislation to come out soon “that is going to be very beneficial to the high-risk pool bill I’ve introduced.”

Collins office also notes the agreement the senator reached with Senate Majority Leader Mitch McConnell (R-KY) includes more reinsurance funding than the $4.5 billion over two years included in the Collins-Nelson reinsurance legislation.

The Collins-McConnell agreement includes $500 million in 2018 to help states set up a reinsurance or high-risk pool mechanism, and then $5 billion a year for 2019 and 2020.

Collins spent much of the end of 2017 insisting that the GOP would honor its pledge to pass the bills before passing tax reform or by the end of the year, but she now suggests the actual deadline date is less important than ensuring the bills pass in time to mitigate premium increases. The Congressional Budget Office has said that the loss of the ACA's individual mandate could hike premiums by 10 percent a year, and GOP sources indicate the party understands the blame will fall squarely on their backs if nothing is done.

When the mandate is repealed in 2019, we must have other health care reforms in place in order to prevent further increases in the cost of health insurance. Senator Collins believes that averting these price spikes, particularly for low-income families, should be a goal that members of both parties can embrace,” Collins’ office said.

But others suggest the mandate loss will push more GOP members to consider another repeal attempt, not a bipartisan fix.

 “With health care promising to be a top issue for voters again in 2018, Republicans in Congress are prone to tread lightly on anything that could potentially alienate their base,” Thorn Run Partners Vice President Shea McCarthy predicted. “This dynamic will likely translate to more rhetoric over ‘repeal and replace’ or the shortcomings of Obamacare rather than well-founded policy solutions. And while some in the GOP will suggest that repeal of the individual mandate will necessitate market stabilization reforms this year, many more see it as an incremental step towards Graham-Cassidy.” The Graham-Cassidy bill is another GOP ACA replacement plan.

If the GOP moves toward market stabilization, per Collins' push, the legislation would likely need to ride with a must-pass spending bill to gain bipartisan support–and the only likely options are the expected Jan. 19 Continuing Resolution or whatever vehicle the reauthorization for the Children’s Health insurance program rides with.

Former Obama CMS official and Families USA Director of Health Policy Eliot Fishman noted that insurance plans make their decision for rate filing throughout 2018, so the sooner the GOP passes stabilization legislation, the less likely premiums will go up.

“Just because the mandate change doesn’t happen until the beginning of 2019 doesn’t mean that insurers aren’t making decisions already,” Fishman said.

According to CMS' draft letter to federally facilitated marketplace plans, issuers seeking to offer exchange plans in 2019 may submit qualified health plan applications to regulators May 9 through June 20. The applications will be reviewed up until Aug. 22 and plans will have until Oct. 5 to make necessary changes as directed by CMS. Open enrollment will begin Nov. 1.