Health insurers are taking steps to prepare for a potential repeal of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). With stakeholders in agreement that the health reform law cannot be repealed without, at least, partial replacement, health insurers and hospitals are calling for measures that will mitigate the coverage and funding loss implied by a repeal of the ACA.
Repeal. Republican lawmakers are proposing partial repeal of the ACA through the budget reconciliation process. Such a process would limit repeal efforts to those aspects of the law with federal budget implications—Medicaid expansion, marketplace assistance (premium tax credits and cost-sharing reductions), and the individual and employer mandates. The leading proposal—Restoring American’s Healthcare Freedom Reconciliation Act of 2015 (H.R. 3762)—previously passed Congress but was vetoed by President Obama (see Senate’s ACA repeal would reduce deficits by $474B, December 16, 2015).
Impacts. The anticipated consequences of a partial repeal are dramatic. The number of uninsured people is expected to rise from 28.9 million to 58.7 million in 2019. That increase of 29.8 million is composed of 22.5 million who become uninsured as a result of the absence of premium tax credits, Medicaid expansion, and the individual mandate. The remaining 7.3 million of the newly uninsured are projected to lose insurance due to the near collapse of the non-group insurance market. Spending would be reduced on the federal side by $109 billion in 2019 and $1.3 trillion between 2019 and 2028 due to the elimination of Medicaid expansion, premium tax credits, and cost-sharing assistance. State spending would also fall by $76 billion between 2019 and 2028.
Insurers. The response from stakeholders has been loud. The health insurance industry, through its lobbyist, America’s Health Insurance Plans (AHIP), published a paper condemning the concept of immediate repeal of federal support for things like cost-sharing reductions and Medicaid expansion. AHIP called for a "stable transition with smart solutions." One such solution recommended by the insurance lobby is to replace the individual mandate with different incentives: late enrollment penalties and waiting periods. AHIP also said that lawmakers should retain cost-sharing subsidies and fund reinsurance to help insurers defray high costs.
AHA. The American Hospital Association (AHA) has also expressed concerns regarding the impact of repeal. The AHA believes any repeal bill that does not also replace coverage should reverse hospital payment reductions in order to ensure the financial stability of its members. Specifically, the AHA has asked lawmakers to restore the Medicare hospital inflation update and eliminate cuts to the the Medicare and Medicaid Disproportionate Share Hospital (DSH) payments. The AHA warns that H.R. 3762 repeals coverage while leaving in place cuts that were intended to fund the very coverage the bill would repeal. Additionally, the AHA estimates that H.R. 3762, without any additional ACA replacement, would have a net negative impact on hospitals of $165.8 billion.
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