Trump and GOP struggle to reach consensus on ACA replacement
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January 17, 2017 12:00 AM

Trump and GOP struggle to reach consensus on ACA replacement

Shelby Livingston
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    The Trump transitionteam updated its websiteafter the election toinclude a new proposalto "modernize Medicare,so that it will be ready forthe challenges with thecoming retirement of theBaby Boom generation—and beyond."

    President-elect Donald Trump and some congressional Republicans say repealing and replacing the Affordable Care Act should occur at the same time so coverage for up to 30 million Americans is not disrupted.

    But there's little consensus in the GOP so far on the shape of a replacement plan, raising doubts about whether and when Republicans will succeed in killing Obamacare and putting their own healthcare reform model in place.

    On top of that, there are disagreements between Trump and House Speaker Paul Ryan on whether to move ahead this year to restructure the popular Medicare program.

    Republicans aren't without health reform proposals. Ryan, HHS secretary nominee Tom Price, and the conservative Republican Study Committee each have offered plans with varying degrees of detail. Trump's campaign had a brief seven-point proposal. Now Trump says his team soon will unveil a full-fledged plan that will cover everyone, reduce premiums and out-of-pocket costs, and cut drug costs.

    But the world is still waiting for Republicans to coalesce behind a single plan. “There's zero consensus on how to move ahead,” said John Gorman, a former CMS official who now is a health insurance consultant in Washington. “There are lots of ideas and plans, but they've had over six years to coalesce around something and they haven't been able to do it yet."

    A major sticking point is Medicare restructuring. While Trump repeatedly promised during the election campaign that he wouldn't touch Medicare—pointedly criticizing Ryan and his Republican primary opponents for wanting to do so—Ryan is pushing to transform the entitlement program into a defined-contribution, “premium support” system. Critics say that model would impose higher costs on seniors and disabled people, though it would depend on the details, which Ryan has not released.

    In the past, Ryan has proposed having the changes only apply to people younger than 55, when they become eligible for Medicare. In his most recent healthcare reform white paper, Ryan also proposed raising the Medicare eligibility age to 67.

    Republicans say they want to reduce the federal deficit and can't do it without addressing Medicare, Medicaid, and Social Security. “If we want (Medicare) to succeed, we have to save it from the insolvency, the bankruptcy that's coming,” Ryan said during a CNN town hall last week. “And so the kinds of reforms that we have been pushing and talking about are reforms designed to save the program and give people more choices, and they don't affect anyone in or near retirement.”

    Ryan acknowledged that he and Trump have had several conversations about Medicare reform and “don't all agree on everything.”

    Joseph Antos, a health policy expert at the conservative-leaning American Enterprise Institute, said the logical way around that disagreement would be to reform and expand Medicare Advantage by converting it to more of a competitive bidding system.

    Antos said Republican differences over Medicaid expansion and restructuring will be more difficult to overcome. Republican governors in states that expanded Medicaid to hundreds of thousands of low-income adults are voicing opposition to taking away those billions in federal funding. “While it's true Republicans by and large would like to see a form of (Medicaid) block grants… it's also the case that the ACA expansion of Medicaid was taken up by Republican states,” Antos said.

    Trump, Ryan, and Price agree that states should be given fixed pots of federal money for Medicaid, and handed far more control in running their programs. Ryan's “A Better Way” July white paper suggested providing states a choice between a per capita allotment or a block grant, and giving them great flexibility in setting eligibility and benefits. Ryan's white paper made it clear he views block grants or per-capita grants as a way to save the federal government lots of money.

    Opponents say block grants or per-capita grants would force states to cut low-income and disabled people off Medicaid, reduce benefits, and slash provider payments.

    That could be a tough sell to both Republican and Democratic governors who expanded Medicaid under the ACA, said Gorman, who predicted that block grants have little chance of making it into the Republican's ultimate ACA replacement package.

    Trump told the Washington Post that under his plan, there will be “insurance for everybody,” which is far from the reality of the plans that have so far been proposed. His spokesman later walked back that statement, saying the president's goal is “to get insurance for everybody through marketplace solutions” and his negotiating skills.

    In fact, the nonpartisan Congressional Budget Office Tuesday estimated that last year's GOP bill to repeal most of the ACA—which would eliminate eliminate the ACA's individual and employer mandates and cost-sharing subsidies—would increase the number of uninsured by 18 million people in the first year following enactment and 32 million by 2026.

    Republicans responded that the CBO projection was wrong because it did not take into account their yet-to-be-released plan for replacing ACA coverage.

    Nearly all Republican plans propose allowing insurers to sell policies across state lines as a means to promote competition, even though experts say such a policy would be difficult to regulate and lead to unbalanced risk pools. Republican policy experts like Antos aren't sold on the idea.

    Most GOP plans also call for expanding health savings accounts in terms of who can use them, how much individuals can contribute, and what HSA funds can be used for. For example, Price, Ryan and the Republican Study Committee plans all include extending HSA eligibility to TriCare beneficiaries, who now cannot use HSAs to pay for medical care. Critics say such expansion would mainly serve as a new tax break for wealthier people who can afford to put money in these accounts.

    But even if Republicans come to a consensus on an ACA replacement package, they'll need Democratic support in the Senate to avoid a filibuster. Senate Democratic leader Charles Schumer has vowed that Democrats would not negotiate with Republicans if they repeal the ACA without working with the Democrats first on a satisfactory replacement that delivers affordable coverage for at least the same number of Americans.

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