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AHCA Defeat Is Not the End of Repeal Efforts, Analysts Say

News  |  By Doug Desjardins  
   April 03, 2017

The Trump administration will likely chip away at healthcare reform through administrative actions to reduce subsidies and weaken health insurance exchanges.

This story originally appeared in California Healthfax.

The American Health Care Act (AHCA) may have been scrapped, but that doesn't mark the end of efforts to repeal the Affordable Care Act (ACA).

Instead, opponents will likely take a piecemeal approach to dismantling the ACA through administrative action, analysts said.

The Trump administration is unlikely to renew its push to repeal and replace the ACA through a single bill like the AHCA, but may attempt to water down elements of healthcare reform through administrative actions designed to reduce federal subsidies and weaken health insurance exchanges.

The War Isn't Over
"This is an enormous, significant defeat, but I don't think the war on the ACA is over yet," said Gerald Kominski, PhD, director of the UCLA Center for Health Policy Research.

"Of course, the White House can disrupt the Affordable Care Act by issuing regulations that destabilize the market and make it more difficult to renew [coverage] or enroll for the first time."

In January, the Trump administration took actions along those lines when it cut federal funds designed to help state health exchanges advertise and reach consumers with notices about the annual deadline for open enrollment.

The Trump administration could attempt to reduce or eliminate federal subsidies and take other actions to weaken state and federal health insurance exchanges, said Micah Weinberg, president of the Bay Area Council Economic Institute.

AHCA Changes Could Have Cost California $24 Billion by 2027

"First, the Trump administration needs to decide whether they want to burn down the house we're all living in through regulatory actions that will end the viability of the exchanges," said Weinberg. "If they want to destroy the thing, they can. So the ACA is very much not out of the woods."

One potential problem for the ACA is a pending lawsuit that could significantly reduce or eliminate cost-sharing funds for low-income consumers.

The lawsuit filed by House Republicans in 2014 alleges that the Obama administration was "unconstitutionally spending money that Congress had not formally appropriated" to provide subsidies for "working poor policyholders."

A district court judge in Washington, D.C. ruled in favor of the GOP lawsuit in a May 2016 decision. The ruling has since been appealed.

Anthony Wright, executive director of advocacy group Health Access California, said low-income residents in the state stand to lose an estimated $900 million in subsidies if the decision stands.

"Losing that $900 million would not just raise deductibles and copayments for hundreds of thousands of Californians, but also spike premiums and potentially crash our individual insurance market," said Wright.

Health Access California estimates that eliminating cost-sharing subsides would raise annual deductibles for someone making under 150% of the poverty level from $75 per year to $2,500 and "take a wrecking ball" to the health insurance market in the state.

'A Fine Line'
Analysts say there are limits to how far the Trump administration can go in dismantling the ACA without Congressional action.

Health & Human Services Secretary Tom Price, MD, "risks being sued for failure to implement the ACA if they go too far," said Kominski. "So there is a fine line."

On Medicaid Money, GOP Has Win-Or-Lose Proposition For States

The GOP can also pursue reforms to Medicaid that would cap federal funding to states but those kinds of changes would require Congressional action—something lawmakers may not wish to pursue after the defeat of the AHCA.

"Even if they can get to yes in the House, it's not clear that there is anything in the middle of the Venn diagram between the House Freedom Caucus (HFC) and the moderates in the Senate unless the HFC decides to allow almost all of the Medicaid expansion to remain in place," said Weinberg.

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