Is the American Health Care Act a ‘critical first step’ or unsupportable?

HHS Secretary Tom Price, M.D., supports the reconciliation recommendations known as the American Health Care Act, and considers the changes a necessary and important first step in further reforming the U.S. health care system. In a letter to the chairs of the House Committees on Energy & Commerce and Ways & Means, Price explained that in his view, the proposed legislation aligns with President Donald Trump’s promise to repeal and replace the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). Two major industry groups, however, said that they could not support the current version of the bills.

American Health Care Act 

On March 6, 2017, House Speaker Paul Ryan announced the American Health Care Act, consisting of two committee “budget reconciliation legislative recommendations,” which would be passed under the provisions of S. Con. Res. 3, a resolution which developed a streamlined process for Congress to pass health reform without threat of Senate filibuster. The document from the Ways & Means Committee would alter many of the ACA’s tax provisions, including eliminating penalties related to the individual and employer mandates, while the Energy & Commerce Committee’s document focuses on changes to the Medicaid program (see Republicans present health reform that is neither repeal nor replacement, March 7, 2017). Both committees began markup on the bills less than two days after the documents were made public.

First step in Administration’s plan

According to Price, the reconciliation legislation is just the first of three planned steps in undoing the ACA’s reforms. The reconciliation process can only be used to change some ACA provisions, though not all, and also cannot be used for all of the Trump Administration’s planned reforms. To complete those changes, HHS has two more planned steps; first, taking administrative actions to provide patients with additional options and give states more flexibility in Medicaid spending, and second, to support legislation on Trump’s other priorities including sale of insurance across state lines and medical tort reform. HHS noted that the Administration has already begun work on the second step, including Trump’s Executive Order on minimizing the economic burden of the ACA (see Trump Administration previews health care plans with Executive Order, regulatory freeze, January 23, 2017) and a Proposed rule designed to stabilize the health insurance marketplace by altering enrollment periods and other rules.

AHA and AMA opposition

Two major stakeholders in the health reform debate are the American Hospital Association (AHA) and American Medical Association (AMA), both of which released statements saying that, as currently written, neither organization could support the American Health Care Act. AHA President and CEO Richard J. Pollack wrote a letter on behalf of the hospitals, health systems, health organizations, and clinician partners associated with the group, and first raised concerns about the lack of coverage estimates from the Congressional Budget Office (CBO) and asked that Congress wait until an estimate is available before proceeding with formal consideration of the Act. The letter also listed the AHA’s policy concerns, including the restructuring of Medicaid—which “already pays providers significantly less than the cost of providing care—and the elimination of funding sources while continuing the ACA”s reductions in hospital payments.

Similarly, AMA President Andrew W. Gurman, M.D., wrote that the Act would reverse the ACA’s coverage gains, with millions of Americans losing coverage, and insisted on the involvement of physicians in the health reform debate. AMA Vice President and CEO James L. Madara, M.D., wrote a letter to the Committee Chairs and Ranking Members in which he said the organization cannot support the Act as drafted “because of the expected decline in health insurance coverage and the potential harm it would cause to vulnerable patient populations.” He noted concerns that rolling back the ACA’s Medicaid expansion would limit state flexibility and urged the Committees to “do all that is possible” to prevent individuals who currently have health insurance from losing that coverage.