Category: Repeal and Replace

It’s clear that whatever replaces Obamacare must focus on quality and incremental local solutions, not one-size-fits-all government mandates.

In this respect, the federal government’s biggest task for replacing Obamacare is to get out of the way and let state policymakers and health care providers innovate.

First off, let’s get clear what Americans want: They’d like many choices of affordable health insurance plans that allow them to choose their doctors. They want to buy a plan when they are young, then keep their plan from job to job and into retirement. And they’d like it to be truly affordable. These “must haves” are obvious to people of any political orientation.

Instead of approaching this challenge like designing a single system or product (the way Obamacare was constructed), Congress needs to help these conditions develop organically, while preserving freedom of choice for Americans.

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Late last year, House Speaker Paul Ryan (R., Wis.) told a group of senior GOP lawmakers that the person they needed to watch in the Senate in 2017 was Elizabeth.

“Elizabeth Warren?” one lawmaker asked.

“No,” Mr. Ryan replied, according to a lawmaker in the room, “Elizabeth, the Senate parliamentarian.”

Elizabeth MacDonough, the sixth person and first woman to hold the title of chief Senate parliamentarian, will play a crucial role in determining what can be included in legislation enabling the Senate to roll back major parts of the Affordable Care Act with just a simple majority, rather than the 60 votes usually needed.

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Health policy experts on both the left and the right need to take a deep breath and re-direct their collective energy to suggesting ways to improve the current regulatory environment.  No industry stakeholder can say with a straight-face that the individual health insurance markets are functional.  It is well-accepted that the markets are unbalanced.  And it is well-established that the unbalanced markets are resulting in financial losses for insurance companies and premium increases for consumers.

Is this the Republicans’ fault?  No.  Is it the Republicans’ problem?  Yes.  As a result, once portions of the ACA are repealed in the coming weeks, Republicans will undertake efforts to improve the current regulatory environment.  How?  First, it is likely that Congress will fund the “cost-sharing” reduction subsidies for 2017, 2018, and likely 2019.

Second, Congress and the Administration will attempt to stabilize the individual insurance markets by requiring pre-verification before a person can enroll in an ACA Exchange plan during a “special enrollment period”; changing the 90-day grace period in cases where a policyholder fails to pay their premiums; prohibiting 3^rd parties from paying premiums on behalf of certain consumers; providing more flexibility for insurance companies under the Medical Loss Ratio rules; continuing payments under the “reinsurance” program for 2016 (not to be confused with the “risk corridor” program); fixing the “risk adjustment” formula; and modifying the age variant for developing premium rates from a 3-to-1 to a 5-to-1 ratio.  In addition, it is likely that funding will be provided to cover high-risk individuals – through high-risk pools or other means.

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President-elect Donald Trump said in a weekend interview that he is nearing completion of a plan to replace President Obama’s signature health-care law with the goal of “insurance for everybody,” while also vowing to force drug companies to negotiate directly with the government on prices in Medicare and Medicaid.

Trump declined to reveal specifics in the telephone interview late Saturday with The Washington Post, but any proposals from the incoming president would almost certainly dominate the Republican effort to overhaul federal health policy as he prepares to work with his party’s congressional majorities.

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Republicans have their best opportunity in a generation to enact a reform plan for health care that moves decisively toward a market-based approach, with far less reliance on federal regulation and control. A reform plan of this kind would represent a dramatic break from decades of policymaking and would be a major component of an effort to rein in the sprawling federal welfare state.

To succeed in this effort, however, House and Senate Republicans, as well as the incoming Trump administration, must dispense with wishful thinking. There is no plan for replacing the Affordable Care Act (ACA) that is without political controversy. Whatever they do will involve trade-offs, and in some cases they will be attacked by their political opponents for doing what is necessary but perhaps unpopular.
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The American health care system is not like a normal market. When you make most health care decisions, you don’t get much information on comparative cost and quality; the personal bill you get is only vaguely related to the services; the expense is often determined by how many procedures are done, not whether the problem is fixed. Republicans are going to try to introduce more normal market incentives into the process. They will likely rely on refundable tax credits and health savings accounts to ensure that everybody can afford to shop for their own insurance and care.

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The House voted Friday on the measure that passed the Senate, part of a process that will make it easier for a subsequent Obamacare repeal bill to advance through the Senate with a simple majority vote and without the threat of a Democratic filibuster. The budget resolution is a crucial first step for Republicans controlling Congress to keep their longstanding promise to repeal the law, which is saddled with problems such as rapidly rising premiums.

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A growing number of Republicans are balking at the prospect of repealing the ACA so quickly without a firm plan to replace it. Now with the Senate on a path to eliminate the ACA, some Republicans are worried about the political fallout and uncertainty of starting to roll back the law without knowing how the process will end. Conversations with Republican senators and a review of their statements show that nearly a dozen have publicly expressed some level of concern about repealing the law without a replacement. “There are a lot of people that have concerns about doing a repeal with no replacement or at least some guidance on replacement,” said Sen. Bob Corker (R-TN) who has co-sponsored language to delay the nonbinding deadline for repeal legislation until March 3. “The train leaving the station this week is not a big event, it’s when the train pulls back into the station that’s the big event,” Corker explained.

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Industries that were integral to the creation of the ACA are keeping their voices down as Republicans quickly dismantle it. The speed of Republican efforts to repeal the ACA has stunned health industry lobbyists, leaving representatives of insurance companies, hospitals, doctors and pharmaceutical makers struggling for a response to a legislative quick strike that would upend much of the American health care system. Given that repeal is forthcoming, the health care industry is staying relatively silent on the binary question of repeal, but is expected to get more heavily involved on the nature and details of replace.

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