On April 6, the House Rules Committee discussed an amendment to the American Health Care Act (AHCA) that would allocate $15 billion over 10 years to be used to develop an invisible high-risk pool (IHRP)—a risk-sharing mechanism meant to alleviate issues caused by the uneven distribution of health care costs. In a marketplace with some form of guaranteed issue, efficient risk-spreading mechanisms are a must. The creation of a IHRP program is a logical next step. However, if the program is improperly funded and fails to account for geographical differences between states and regions, it will only result in a marketplace marked by the same problems plaguing the current marketplace: rising premiums and lack of insurer competition.
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Here is something you can take to the bank. If Republicans can’t produce an alternative to Obamacare that solves the real problems of ordinary people, they will never be able to pass a health reform bill. But if they do solve problems, they will have no trouble getting support — even from Democrats.
That means getting the focus right. Over the past three years there have been a series of Republican proposals that have been excessively focused on Obamacare rather than on a conservative approach to health reform. These proposals have been hell bent on repealing Obamacare taxes and Obamacare mandates instead of solving the problems that Obamacare has created or exacerbated.
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Republicans left Washington on Friday without a health-care deal, despite renewed negotiations after last month’s fiasco and a burst of White House diplomacy. Perhaps the two-week recess will be a cooling-off period and we hope the House’s factions can agree on a deal. If they can’t, then at least we’ll learn who’s responsible for defeat.
President Trump and Republicans campaigned on repeal and replace, and the President at least wants to keep his word. The ObamaCare exchanges are also fragile and precarious, and consumers harmed by rising premiums and declining choices are likely to blame the party in power.
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House Republicans continue to work toward a health care deal but are currently in a holding pattern as they await further details from the Trump administration on proposed changes to the bill. “We don’t have bill text or an agreement yet,” Speaker Paul Ryan told reporters after meeting with the GOP conference Tuesday morning. He declined to discuss details of proposed changes, saying “productive conversations” were happening at the “conceptual level” regarding how to lower insurance premiums while maintaining “solid protections for people.” House Freedom Caucus members said the same thing Monday night after leaving a meeting where Vice President Mike Pence and Trump administration officials, including White House Chief of Staff Reince Priebus, discussed the proposed changes with them.
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The deal House Republicans reached on Thursday addresses a key problem with their alternative to the Affordable Care Act: steep premiums. The provision, which House Republicans decided to add to their Obamacare replacement bill before they face constituents during the Easter recess, would dole out $15 billion to states over about a decade to help insurers cover the sickest people in the health care system and reduce premiums for individual health plans.
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It looks like House Republicans have been trying over the past few days to coalesce around a revised version of the AHCA. One key revision has involved a more assertive temporary federal reinsurance scheme to quickly lower premiums and stabilize the transition period to a new system. But maybe the most significant, and least familiar, new proposal has involved allowing states to obtain waivers from some Title I regulations in Obamacare. The devil will be in the details, and they will matter enormously here, but the general concept of returning regulatory power to the states through waivers that are connected to the bill’s spending measures is an interesting way to deal with the constraints Republicans confront and could have real promise.
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Health and Human Services Secretary Tom Price holds broad authority over administration of the Affordable Care Act, including the power to give additional flexibility to states and insurers under the law. Section 1332 of the ACA allows HHS to offer “state innovation waivers” for that allow states to waive some (but not all) of Obamacare’s insurance regulations in return for a block grant of ACA funding. States that want to keep the ACA status quo could do so, while Republican-led states could go in a different direction.
An approach that started with 1332 waivers and layered on additional legislative reforms would allow both the more conservative and moderate members of the GOP to declare victors, because the states themselves would be put back in charge of their own health insurance markets.
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The demise of the American Health Care Act (AHCA) was ultimately precipitated by factional opposition to different provisions of the bill. Moderate and conservative members of the Republican conference did not agree on much, except they shared an animus towards the ill-fated legislation.
The future of health-care reform is now highly uncertain. Forging a legislative consensus will continue to be a challenge due to the inherent trade-offs between broad-based coverage and personal freedom, to say nothing of competing views about the respective roles of the market and the state (including different levels of government).
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President Trump cannot repeal the ACA by executive order. The ACA is a statute, enacted by Congress, which under the Constitution only Congress can repeal or modify. Furthermore, the order does not itself change existing regulations. Rather, it provides instructions or guidelines as to how Trump wants responsible agencies to exercise their discretion in interpreting and applying statutory requirements. The order appropriately recognizes that the new priorities it outlines can be followed by administration officials only “to the maximum extent permitted by law.”
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Democrats, hoping to seize on momentum from the apparent collapse of the Republicans’ health bill, are grappling with a tough question—whether they can do anything to prevent the Trump administration from weakening the Affordable Care Act through administrative actions by the Department of Health and Human Services.
Democrats are trying to mobilize public support to block potential changes. Five Democrats on the Senate health committee sent a letter to President Donald Trump Monday calling on him not to undermine the health law.
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