In Washington, open season has been declared on Obamacare, with a Democratic filibuster in the Senate likely to serve as the main limit on the culling.
The Republican-controlled Congress appears certain to continue its years-long effort to repeal President Obama's signature domestic policy initiative, and President-elect Trump's healthcare team is set to feature ardent Obamacare foes.
With last week's nomination of U.S. Rep. Tom Price, (R-GA), for Department of Health and Human Services secretary and Seema Verma, MPH, for administrator of the Centers for Medicare & Medicaid Services, the fate of the Patient Protection and Affordable Care Act (ACA) appears grim.
Price is a primary architect of the Empowering Patients First Act, which seeks to supplant much of the PPACA.
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Three elements of the EPFA build a framework for scuttling the Obamacare insurance exchanges:
- Age-adjusted tax credits that individuals would use to buy private insurance
- Consumer-friendly rules for health savings accounts
- Federal grants to finance state-operated high-risk pools that would help replace the ACA's preexisting condition provision.
Verma is the president, CEO, and founder of SVC Inc., an Indianapolis-based healthcare consultancy which has helped several states design waivers for Medicaid expansion under the PPACA.
Most notably, she helped design and implement Medicaid expansion waivers under two Indiana governors—Mitch Daniels' Healthy Indiana Plan (HIP) and now-Vice President-elect Mike Pence's HIP 2.0.
Under HIP 2.0, which was implemented in February 2015, many adult Medicaid enrollees are required to make monthly contributions from $1 to $27, the Indianapolis Star reported in January 2015.
The requirement mirrors provisions of Medicaid waivers that Verma helped design in Michigan and Iowa. "Indiana, like Iowa and Michigan, [has] similar themes of personal responsibility and encouraging healthy behaviors.
They all include some form of monthly contribution for those above poverty [level]," the Star reported.
Even politically popular components of the ACA could be ripe for repeal-and-replace efforts, says Merrill Matthews, PhD, resident scholar at the Irving, TX-based Institute for Policy Innovation (IPI).
Matthews, who also serves as vice chairman of the Texas Advisory Committee of the U.S. Commission on Civil Rights, characterizes the nonprofit as a "free-market think tank."
Price and other Republican lawmakers are eager to replace the pre-existing condition provision of the PPACA with high-risk pools because the Obamacare exchanges lack sufficient safeguards against beneficiary gaming, Matthews says. For example, he says payers were unsuccessful in lobbying Democratic lawmakers to include stiff penalties in the ACA for people who shun the individual mandate to buy health insurance.
"They were trying to convince the Democrats to make the penalty for not buying insurance equal to the cost of insurance—if that were the case, you would just buy the insurance. But I told them they were dreaming on that," Matthews says.
"Democrats have long believed that people should be able to apply for health insurance and get it regardless of medical condition."
Based on the pre-ACA experience with state-operated high-risk pools, relying on them as the safety-net insurance option for poor individuals who are uninsured or underinsured would likely require federal financing, Matthews says.
"There is a precedent for the federal government providing funding for high-risk pools. I suggest we go back to something like that, but there were no strings attached to those funds," he states.
"In some cases, high-risk pools worked really well, but some of them did not work so well. Florida had a high-risk pool but they did not fund it until the last minute. … If you come in with federal funding, I would argue that you have to have best practices to make sure all high-risk pools are working similarly to other high-risk pools across the country and are going to function well."
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With Trump, Price and Verma all favoring federal block grants to the states as the primary financing mechanism for Medicaid, the ACA's approach to expanding the program to more low-income adults appears doomed, he says.
"I suspect Medicaid expansion is going out the window. If Congress does approve repeal legislation, I expect they will have a two-year grace period where the subsidies and Medicaid expansion wind down."
Although conservative lawmakers have been advocating Medicaid block grants for decades, the reform challenge is daunting.
"There is no clear model out there for how to block-grant the money to the states. For 25 years, Republican boilerplate has been to block-grant Medicaid to the states, but there is no outline for how that would work exactly," Matthews says.
Christopher Cheney is the CMO editor at HealthLeaders.