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 The early view from the healthcare sector still includes an end
eventually to President Obama's signature health program.
But Trump's picks to head the U.S. health department and its top
regulator on Tuesday, along with his recent softening on some
aspects of the existing law, is a sign to some sector insiders that
instead of chaos, an orderly transition of up to three years to
replace it with a plan that healthcare companies actually want could
be in store.
Trump tapped Republican Representative Tom Price, an orthopedic
surgeon who drafted legislation years ago to replace the Affordable
Care Act (ACA), as head of the U.S. Department of Health and Human
Services. Consultant Seema Verma, who helped Vice President-elect
Mike Pence create a Medicaid expansion plan in Indiana, is his
choice to lead the Centers for Medicare and Medicaid Services. Both
must be confirmed by the U.S. Senate.
Democrats bemoan the choices, saying they will gut the 2010 law that
gave insurance to about 20 million people through the creation of
new individual health insurance and the expansion of Medicaid for
the poor.
But some healthcare companies, including insurers, doctors groups
and hospitals, said they were encouraged by the appointments of
experienced healthcare insiders.
"From our standpoint, we want to make sure that as many people as
possible maintain (insurance) coverage," said Dr. Mario Molina, CEO
of Molina Healthcare, which provides Medicaid and Obamacare
individual insurance plans. "I think the pieces of the healthcare
puzzle are kind of coming together for us now."
That picture looks increasingly like lawmakers will bring Trump a
"repeal" bill in January that lays out at least a two-year timeline
for changing the law. House Majority Leader Kevin McCarthy said
Tuesday that the House would start working on repealing and
replacing Obamacare “right away,” but with a transition period to
allow changes to be phased in over time.
That period could be up to three years, warned Senate Finance
committee Chairman Orrin Hatch, in order "to work through the
problems."
Kathleen Harrington, chair of Policy of Government Relations for the
Mayo Clinic, said so far she likes what she hears from Republicans
on changes to health insurance.
"We are very encouraged with the approach we're hearing so far from
President-elect Trump in terms of having a focused review and
removing certain parts of it," she said.
The key for Republicans is shifting the bulk of the oversight of
individual insurance and the Medicaid program to the states, and
changing the way both are funded.
Insurers, who currently submit individual plans to both the state
and the federal government, say this will allow them to sell more
flexible health plans. For hospitals, the Verma appointment and
Pence's Medicaid expansion in Indiana are signs that one of their
major sources of government reimbursement for medical services could
continue to grow.
To be sure, it remains unclear what the overall impact will be on
Medicaid and Medicare going forward. Both insurers and hospitals are
watching for any negative impact from any changes, and anticipated
cuts in funding.
Investors have already been playing the winners and losers of
reforming health insurance. The Nasdaq Biotechnology index has
gained 7 percent since Trump was elected as the possibility of
Hillary Clinton enacting new legislation on drug pricing
disappeared. On the other hand, shares of hospital chains have sold
off sharply, including a 26 percent decline for Tenet Healthcare, on
the fears that millions of newly uninsured patients will need care
but not be able to pay their bills if and when the ACA is repealed.
MEDICAID EXPANSION?
Pence, who is expected to take a large role in shaping the
administration's healthcare policy, backed a plan in Indiana
developed by Verma in which beneficiaries contribute to the cost of
their healthcare.
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"It's pretty clear that she is on the side of expanding Medicaid,
but putting some conditions on it," said Joseph Antos, a health
policy expert at the conservative American Enterprise Institute.
Antos expects the replacement plan to also include individual
insurance that has a form of Federal subsidies, as envisioned in
House Speaker Paul Ryan's proposed plan to replace Obamacare.
AgileHealthInsurance.com, which sells short-term health insurance
plans that are allowed to exclude benefits guaranteed under the ACA,
expects the law to allow more choice so that insurers can design
cheaper plans to hit a certain price point of $100 per month or $200
per month, as they did before the ACA, according to executive
director Sam Gibbs.
Prices of Obamacare insurance rose about 25 percent for 2017 and
large insurers including UnitedHealth Group have abandoned plans for
next year, saying that they are losing too much money on sick
customers.
Under Price and Verma, it could be the states once again making most
of the decisions about mandatory benefits with the Federal
government providing only a broad framework, Gibbs suggested.
At benefits company Stride Health, which sells and manages
healthcare benefits to "gig" workers like Uber drivers, CEO Noah
Lang said that he would want to be sure that the replacement plan
has tax credits available to people as they need them, rather than
at the end of the year only.
Blair Childs, senior vice president at hospital purchasing group
Premier, said members of Congress are already asking healthcare
companies for input on a roadmap for the ACA replacement.
"The offices we've talked to are saying 'Don't talk to me about what
you don't want, talk to me about what you do want. How do we solve
this?" Childs said.
The Ryan plan, known as A Better Way, envisions block grant funding
for Medicaid, the creation of vouchers for Medicare coverage, and
the elimination of the advance paid premium subsidies for individual
insurance. It is seen as the foundation of the eventual plan. Some
Republican lawmakers hope that this new health reform law will get
Democratic support and pass the 60-vote threshold in the Senate.
Price, who has presented his own replacement plan, is now turning to
a job of managing a massive agency that oversees the U.S. Food and
Drug Administration, Medicare, Medicaid, the Children's Health
Insurance Program and other programs, and will be tasked with
implementing what Congress ultimately sends him, Childs said.
"The relevant thing is the Ryan plan and what elements of that can
be put into law," Childs said.
(Reporting by Caroline Humer, Bill Berkrot and Lewis Krauskopf in
New York and Susan Cornwell, Richard Cowen and Toni Clarke in
Washington D.C.; Editing by Edward Tobin)
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