November 30, 2016

The Future of Federal Health Care Policy


In light of the recent election, the Washington Update of November 16 included detailed information about the possible futures of the Affordable Care Act (ACA), Medicaid, the Children's Health Insurance Program (CHIP), domestic discretionary spending, and prescription drug policies. The president-elect and congressional leaders have vowed to repeal the ACA and drastically alter the nature of the Medicaid program by turning it into a block grant or capping federal payments on a per-beneficiary basis. In addition, federal funding for CHIP will cease after September 30 unless Congress and the president approve continued funding.

ACA repeal. Some congressional leaders are aiming to have an ACA-repeal bill on the new president's desk as early as inauguration day, January 20. To avoid causing an immediate loss of insurance to millions of Americans, however, any legislation passed early next year will likely delay repeal for a couple years, until an ACA replacement can be developed. Still, many analysts expect that an impending repeal will cause many insurers to drop out of the marketplaces, thus increasing premium prices. (Most likely, Congress will not be able to repeal the ACA's consumer protections in January; barring an unexpected procedural ruling, it will take 60 votes in the Senate to repeal those parts of the law, including the ban on denying or charging more for insurance for people who have pre-existing conditions; coverage of young adults on their parents' plans until age 26; and the elimination of annual and lifetime coverage limits.)

There have been a number of proposals put forth for replacing the ACA, outlined in an article in Vox. Among these is one outlined by House Speaker Paul Ryan (R-WI), currently being drafted by staff of the House Ways and Means Committee. Another prominent ACA-replacement proposal was developed by Senator Orrin Hatch (R-UT), chairman of the Senate Finance Committee (which has jurisdiction over much of the health law), along with Senator Richard Burr (R-NC), and Rep. Fred Upton (R-MI), current chairman of the House Energy and Commerce Committee (which has jurisdiction over Medicaid and some other parts of the health law). In addition, the president-elect's nominee for Secretary of Health and Human Services (HHS), Rep. Tom Price, MD (R-GA), has developed his own ACA-replacement bill.

Medicaid. If Medicaid is turned into a block grant program, or federal payments are capped on a per capita basis, it will be because Congress wants to cut federal spending over the long run. As a result, states will necessarily get less money from the federal government, while being given greater discretion to cut benefits, and possibly to restrict eligibility. With less federal funding, states will also have an incentive to cut Medicaid reimbursement to providers, thus reducing access to care. The Kaiser Family Foundation has developed a short fact sheet explaining the consequences of ACA repeal and other potential legislative and regulatory actions on the Medicaid program.

CHIP. Congress must also act to extend CHIP funding beyond September 30, 2017. If it does not do so, states will lose an important federal funding source for covering children, and children will lose benefits tailored to their specific needs. Many state Medicaid and CHIP officials are already beginning to consider what options may be available to their states if funding for CHIP is delayed or not extended.

Educating policy makers. Since there are some Republicans hesitant to support ACA repeal without a clear replacement plan, advocacy groups that support the ACA (including children's health groups like Family Voices) believe it is important to educate  all Members of Congress, as soon as possible, about the importance of the ACA to children and families.

Governors, state legislators, and local officials should also be educated about the importance of the ACA, Medicaid, and CHIP to children and families, since states and localities will have less money to provide health care to those in need if federal funding for these programs is reduced. If states do not make up for the loss of federal funds, counties and cities will bear an increased financial burden providing care to the uninsured through public hospitals and clinics.