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October 19, 2017 01:00 AM

Healthcare leaders downbeat on compromise ACA bill

Merrill Goozner
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    From left, Chip Kahn, Dr. James Madara, Dr. Bruce Siegel and Joseph Swedish discuss what to expect next in the fight over the ACA during a panel at Modern Healthcare's Leadership Symposium.

    PARADISE VALLEY, Ariz.—Healthcare leaders gathered here for Modern Healthcare's second annual Leadership Symposium have grown pessimistic about the prospect for passing legislation that would stabilize the insurance exchanges for next year's open enrollment season—now just two weeks away.

    President Donald Trump's sudden reversal on support for the compromise legislation crafted by Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) cast a pall over a meeting where the nearly 100 top officials are discussing leadership challenges during a time of "disruption, complexity and uncertainty."

    "The president had six different perspectives on Murray-Alexander within the course of 48 hours," said Dr. Bruce Siegel, CEO of America's Essential Hospitals. "I don't see how this Congress passes something that fixes the ACA and goes back to its constituents and funders."

    "Is Alexander-Murray dead? Do you mean today? Tomorrow I'm going to give you a different answer," said Joseph Swedish, CEO of Anthem, the nation's second largest private health insurer. "It had a lot of momentum and captured the attention of a lot of people. I pray that it can happen. (But) the ideological divide stands in the way."

    The compromise legislation would continue for two years cost-sharing subsidies for low- and moderate-income families purchasing plans on the exchanges while giving states more flexibility to craft rules governing their exchanges and Medicaid expansions. Trump canceled the subsidies last week.

    Chances of passing the bill—crafted to appeal to moderates in both political parties—faded quickly once Republican leaders in both houses of Congress threw cold water on the compromise bill, which has so far drawn just 11 co-sponsors from the majority Republicans in the Senate. Conservatives in the House, including Speaker Paul Ryan (R- Wis.), remain steadfastly opposed to what they call a bailout for the insurance industry.

    Ironically, the net effect of canceling the individual cost-sharing subsidies could be lower out-of-pocket premiums for most plan purchasers, which could spur enrollment if word gets out. Government payments to insurers for the core premium, which cannot be ended by executive order, will rise to cover the higher cost of policies necessitated by cancellation of the cost-sharing, health insurance experts predict.

    Insurers are not taking solace from that possibility, since instability in the individual insurance market has made it difficult to predict medical losses and set actuarially sound rates.

    "Stability of funding is critical," Swedish said. "A lot of gaming is going on. Twenty percent of our ACA members don't hold insurance for more than six months. That's no different than buying home or auto insurance at a time of catastrophe. That's not insurance."

    Swedish noted that of the nearly 2 million Anthem members who bought coverage on the exchanges, 80% got subsidies, which is consistent with national figures.

    Providers at the conference also aimed fire at the president's executive order that opened the door to the return of association health plans and lengthened to one year the time individuals can purchasing plans that do not meet ACA rules like covering people with pre-existing medical conditions.

    Most analysts believe that order, which was greeted with cautious approval by some insurers, will create another option for healthy people willing to risk skimpy coverage to escape the ACA exchanges, which will drive rates in those marketplaces higher.

    "It brings back the Wild West," said Chip Kahn, CEO of the Federation of American Hospitals, which represents the for-profit hospital industry. "That leads us back to Know-Nothing-ism in the individual insurance market."

    Unlike cost-sharing reductions though, the executive order must go through arduous rulemaking process before any of the changes can be put in place.

    Kahn, whose inside-the-Beltway experience includes stints on Capitol Hill as well as lobbying for insurers and providers, did hold out hope that the yearend deadline for passing legislation to prevent a government shutdown provides an opportunity for some much-needed healthcare bills to pass.

    "CHIP (the Children's Health Insurance Program) needs to get done; Medicare extenders for rural hospitals need to get done," he said. "I have a feeling that when you get these big omnibus bills at the end of the year, things tend to get done that people say will never get done."

    But the cost-sharing subsidies may be the bridge too far for conservative Republicans in the House, many of whom could face primary challenges next year from well-funded tea party-style candidates vehemently opposed to the ACA.

    "The question is how much pain has to be experienced by how many people before we get to the point where the economic and humanitarian effects forces action," said Dr. James Madara, CEO of the American Medical Association.

    An​ edited​ version​ of​ this​ story​ can​ also​ be​ found​ in​ Modern​ Healthcare's​ Oct.​ 23​ print​ edition.

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