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Obamacare Repeal Likely, But Uncertainty Clouds Alternatives

Analysis  |  By Christopher Cheney  
   November 14, 2016

The current system could remain in place for 'a couple more years' as Republicans decide what to keep—possibly shared savings models and Medicare demonstration projects—and what to shed.

With ACA-averse Republican lawmakers in control of Congress, President-elect Trump's ability to honor his pledge to repeal President Obama's most ambitious domestic-policy initiative appears beyond doubt.

The scant details Trump has offered about his plans to replace the healthcare reform law, however, portend many suspenseful weeks ahead for healthcare industry leaders.

Trump Victory Elicits Measured Response from Healthcare Leaders

The president-elect's "Healthcare Reform" position paper features seven concrete proposals, five of which are directly related to the ACA:

  • "Eliminate the individual mandate. No person should be required to buy insurance unless he or she wants to."
  • "As long as the plan purchased complies with state requirements, any vendor ought to be able to offer insurance in any state."
  • "Allow individuals to fully deduct health insurance premium payments from their tax returns under the current tax system."
  • "Allow individuals to use Health Savings Accounts. Contributions into HSAs should be tax-free and should be allowed to accumulate."
  • "Block-grant Medicaid to the states. Nearly every state already offers benefits beyond what is required in the current Medicaid structure. The state governments know their people best and can manage the administration of Medicaid far better without federal overhead."

Devon Herrick, PhD, senior fellow at the Dallas-based National Center for Policy Analysis, gave his opinions on Trump's proposals to replace portions of the ACA. The transcript below has been lightly edited.

HLM: Do Trump's proposals amount to a viable alternative to the ACA individual insurance exchanges and Medicaid expansion?

Herrick: Taken together, the Trump health proposal is a good start. But he needs to fill in the details on how to transition from where we are now to where we need to go.

The transition will take time. I expect the current system will be in place for a couple more years; since it would be very difficult to tell people—the 85% who get subsidies—in February that they are going to lose their subsidy but hopefully get a cheaper premium.

What might those details look like? Conservative health policy analysts will likely push for a tax credit to assist individuals purchasing their own coverage in a manner similar to how employees get tax exclusions. States will likely reinstate "guaranteed renewal" in place of "guaranteed issue."

Currently, some people are gaming the exchange system: Signing up after they have a health concern—say, a pregnancy—then dropping coverage after they are treated. That has to stop.

Guaranteed renewability would force people to maintain continuous coverage if they were to have coverage that is not underwritten. I [also] expect states will want to create high-risk pools.

HLM: Gauge the likely financial impact of Trump's proposals for health systems, hospitals, and physician practices.

Herrick: It is not yet clear to me how a Trump presidency will impact doctors and hospitals. Currently, doctors and especially hospitals are struggling in a market where many of their patients have high-deductible plans and are essentially paying much of their medical bills out of pocket.

One potential difference is that some patients who would otherwise have high-deductible coverage could be uninsured. But except for catastrophic care, it is hard to see how a doctor or hospital would be better off or worse off under those conditions.

HLM: The ACA is much more than the public insurance exchanges and Medicaid expansion. What would be the likely impact of repealing the ACA in total without making accommodations to replace elements of the law that underpin reforms such as accountable care organization models and bundled-payments programs?

Herrick: The shared savings models and demonstration projects under Medicare will likely remain one way or another. ACOs are an experiment that is bearing fruit, and I cannot imagine these going away.

On the other hand, the Independent Payment Advisory Board will likely go away, and [neither] Republicans [nor] Democrats will care.

The on-demand HealthLeaders Media webcast, How the 2016 Election Will Affect the Future Landscape of Healthcare Payment and Policy, offers more information on healthcare policy, payments, and politics.

Christopher Cheney is the CMO editor at HealthLeaders.

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