Economic, job losses predicted with BCRA

The Better Care Reconciliation Act (BCRA), the Senate alternative to the American Health Care Act (AHCA), would lead to significantly larger job losses and reductions in states’ economies by 2026, if passed into law. Both bills seek to partially repeal and replace the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). According to an issue brief by the Commonwealth Fund, both the draft BCRA and the AHCA, which passed the House earlier (see The AHCA strikes back, May 4, 2017), would have similar effects on the number of uninsured Americans. The Congressional Budget Office (CBO) estimated that this draft version of the BCRA would lead to 22 million fewer insured Americans by 2026, roughly the same as the 24 million uninsured estimated for the AHCA (see BCRA would curb Medicaid spending growth, increase uninsured numbers, Health Law Daily, June 30, 2017; Revised AHCA costlier with same number of uninsured, Health Law Daily, March 24, 2017).

The issue brief noted that, generally, federal health funds are used to purchase health care, with fiscal effects from these purchases spreading throughout the rest of the economy by creating jobs and other economic growth. Federal health funds pay hospitals, doctors’ offices, and other providers; these facilities use revenue to pay their employees and buy goods and services, such as rent or equipment. In turn, health care employees or other businesses (and eventually their workers) use their income to purchase consumer goods like housing, transportation, or food. An analogous effect is when federal taxes are reduced, the expectation is that consumers or businesses retain income and purchase goods and services, invest, or save.

Impact on jobs

The Commonwealth Fund noted that Medicaid expansion states would be hardest hit under the BCRA. In terms of job creation or losses, the proposed BCRA would add over 750,000 jobs in 2018, but employment would then deteriorate. It is projected that in 2026, under the BCRA, there would be 1.45 million fewer jobs with the health care sector bearing the brunt of the losses at over 900,000 fewer jobs. State coffers would be reduced by $162 billion.

BCRA would repeal a number of taxes along with a phase-in of coverage-related spending reductions, including Medicaid. The tax repeals would increase federal deficits by more than $50 billion in 2018 and 2019. However, as noted, the number of jobs outside of the health care sector in 2018 would rise. Health care sector jobs would fall immediately with the loss of 30,000 jobs.

By 2026, 1.45 million fewer people would have jobs. Additionally, gross state products would drop by $162 billion and business output would be $265 billion lower, while overall 919,000 jobs would be lost in health care. The issue brief estimated that more than 534,000 jobs in other sectors, including construction, real estate, finance, retail trade, and public employment, would be lost by 2026.

States that expanded Medicaid were estimated to have deeper and faster losses. Having earned more federal funds under the ACA, these states lose more when Medicaid matching rates are cut. In addition to cutting funds to states that expanded health insurance for low-income Medicaid populations, BCRA also increases funding to states that did not expand Medicaid. Nonetheless, the issue brief noted that states that did not expand Medicaid, like Florida and Maine, would also experience job and economic losses after a few years. For instance, Florida would have the sixth highest level of job loss in the nation by 2026.

Senate hearing on individual market goes off-track fast, gets partisan

A Senate committee hearing on how to stabilize the individual health insurance market quickly devolved into a platform to make partisan comments and score political points regarding the proposed repeal and replacement of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). This occurred despite the efforts of the committee chairman to focus the committee on a transition plan for the individual market and the statements of the committee witnesses, which were non-partisan and conciliatory.

The Chairman’s remarks. In his introductory remarks, Sen. Lamar Alexander (R-TN), Chairman of the Senate Committee on Health, Education, Labor & Pensions, expressed his hope that the committee could put aside the partisan talking points and come together to find solutions to ensure the viability of the individual health insurance market during the transition from the ACA. The individual mandate to obtain health insurance was created by section 1510 of the ACA.

Alexander noted that the individual market makes up only 6 percent (18 million beneficiaries nationwide) of the total health insurance market, with only 4 percent covered through the ACA Exchanges. He further noted that some health care plans have pulled out of the Exchanges and many individuals may have only one plan to choose from. He asked the panel and the committee to focus on three questions: (1) Is there really instability in the individual markets? (2) If so, what needs to be done? (3) By what date must it be done?

The Ranking Member’s remarks. Ranking Member Patty Murray’s (D-WA) opening statement showed that she had no intention of following Alexander’s plea for a non-partisan hearing. Instead, she began by stating that while the individual market had always been a problem, the ACA helped to solve that problem, and now the Republican’s plan to repeal the ACA without a concrete plan for replacement is creating chaos in the health care system. She also went outside the individual market focus of the hearing and claimed that Republican policies would cut Medicare and Planned Parenthood. She termed the Trump Administration efforts as “TrumpCare by sabotage” and urged the Republicans to reverse their course and stop repeal of the ACA. She concluded by sarcastically suggesting that you “can’t repair the roof while Republican Party is burning the house down.”

Sen. Tim Scott (R-SC) responded to Sen. Murray’s comments with “the house may be on fire, but it was on fire before we got here.” He was also able to get one witness to concede that the individual market had already been destabilized by specific provisions of the ACA itself, including the essential health benefit requirement, special enrollment periods and extended grace periods that have allowed individuals to game the system, medical loss ratios, and having premiums for young people set higher than the penalties for not having coverage.

The witnesses. The committee witnesses included Julie Mix McPeak, Comissioner of the Tennessee Department of Commerce and Insurance; Marilyn Tavenner, former CMS Administrator and current President and Chief Executive Officer of America’s Health Insurance Plans; Janet Trautwein, Chief Executive Officer of the National Association of Health Underwriters; and Steve Beshear former Democrat Governor of Kentucky from 2007 to 2015.

All of the witnesses were in agreement that the individual health insurance market does not react well to the uncertainty that currently exists. And three of the four witness agreed that the number of plans available are dropping and the premiums are rising.

When asked by Alexander for a deadline for when Congress must act, the witness stated by the end of March at the latest. This, they stated, was because rates must be set by mid-July and plans approved by the various states by August.

McPeak. In her statement, McPeak testified that, “In short, Tennessee’s ACA individual market experience since 2014 has meant fewer marketplace carriers for Tennessee consumers, less competition across the state, and higher priced premiums for available products. In addition, we have seen existing FFM carriers move towards narrower networks, further limiting consumers’ access to providers of their choosing.”

She stated that there are only three ACA carriers in Tennessee, with only one choice in 73 of the 85 counties. In addition, she stated that premium rate increases have ranged from 42 to 62 percent in her state. She did not call for a delay in the repeal of the ACA, but, instead, asked Congress to allow states to tailor health care plans to fit their needs and urged an open and transparent repeal and replace process so that carriers can prepare adequately.

Tavenner. In her statement, Tavenner admitted that parts of the ACA have not worked well. She stressed that certainty in the individual market is essential. She recommended: (1) continuing to provide subsidies such as the advanced premium tax credits and cost-sharing reduction payments in their entirety; and (2) making full federal reinsurance payments for 2016, as this funding is important for plans to effectively cover the needs of high-need patients, including those with chronic conditions.

Tavenner also recommended several policies to help promote a more stable and workable transition for consumers and families, including:

  • Using premium tax credits to encourage younger people to get coverage.
  • Creating incentives for people to keep their coverage through the transition.
  • Beginning in 2017, establish a federally funded, transitional risk pool program would offset some of the costs of serving patients who have the most complex health conditions and need the most care.
  • Eliminating taxes and fees such as the health insurance tax, which will reduce premiums and promote affordability.
  • Effectively verifying the eligibility of those signing up for coverage during special enrollment periods, and shortening the 3-month grace period for non-payment of premiums so that it is better aligned with state laws and regulations (e.g. 30-day period).
  • Protecting people who are eligible for public programs from being inappropriately steered into the commercial insurance market.

Trautwein. Trautwein called for immediate stabilization of the individual market. She attributed the higher cost of individual plans to rules allowing healthy individuals to drop in and out of plans without consequences and allowing special enrollment periods without requiring upfront documentation and allowing inappropriate coaching by enrollers. She recommended:

  • Requiring guaranteed access to individual coverage and with state-level financial backstops for catastrophic risks.
  • Giving pre-existing condition credit for prior individual market coverage to ensure true heath insurance portability from one individual market policy to another.
  • Standardizing state requirements regarding the consideration of pre-existing conditions.
  • Improving federal group-to-individual coverage portability provisions so that people can transition directly from employer coverage to individual coverage without hurdles.
  • Stabilizing individual market rates by requiring more standardization as to how individual market carriers determine pricing.
  • Increasing consumer protections regarding individual market coverage rescissions.
  • Making it easier for employers to help people purchase individual health insurance.
  • Providing federal financial assistance to keep individual health insurance coverage affordable, including enhanced deductibility, subsidies for low-income individuals, and federal financial support for qualified state financial backstop programs.
  • Ensuring that all Americans have health insurance coverage.
  • Allowing state implementation of enhanced consumer protections with a federal fallback enforcement mechanism.

Beshear. In his statement, Beshear gushed about the ACA and what it did to increase the number of people with health coverage in Kentucky. He claimed that his creation of a state exchange and the expansion of Medicaid added 500,000 to the insured roles in Kentucky. He stated that he does not view the ACA as a partisan issue, but rather a tool to address health insurance problems. He believes that the ACA works and that Congress’ challenge is to make it work better.

FDA relaxes guidelines for abortion-inducing drug, flames abortion controversy

The FDA announced a labeling change for the drug Mifeprex®, which, when used together with another drug called misoprostol, will terminate a pregnancy in the early stages. The labeling change will relax certain guidelines in prescribing practices and expand the time in which women can take this drug in order to induce an abortion. This change comes at a controversial time as the Supreme Court just heard oral arguments, and oddly asked parties for additional briefing, in a challenge to the contraception mandate under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). At the same time, anti-abortion candidates in the race to the White House have recently fueled the fire with inflammatory remarks while some pro-life proponents are framing the FDA’s change as a political move.

Labeling changes

While the FDA first approved Mifeprex in 2000, the latest announcement outlines a new approved regimen which was found to be safe and effective after a supplement application was submitted by the manufacturer. The FDA stated that the drug may be appropriately used to end a pregnancy through 70 days of gestation and through the following procedure:

  • The ingestion of 200g of Mifeprex on day one;
  • The ingestion of 800mcg of misoprostol 24 to 48 hours after taking the Mifeprex; and
  • A follow-up with a health care provider seven to 14 days after taking the Mifeprex.

The FDA also outlined an appropriate risk evaluation and mitigation strategy (REMS) for Mifeprex, as follows: (1) that it must be ordered, prescribed, and dispensed under the supervision of a health care provider with certain qualifications; (2) that those health care providers must complete a Prescriber Agreement Form before prescribing; (3) that it only may be dispensed in clinics, medical offices, and hospitals; and (4) the provider must obtain a Patient Agreement Form before dispensing it.

Effect

Other than extending the time in which this medication can be prescribed from seven weeks to 10 weeks, the new labeling reflects a change in dosage and procedure that, according to some sources, was adopted by physicians that prescribed Mifeprex off-label long ago. “The change brings the direction for taking the drug . . . in line with what has become standard medical practice in most states: reducing the dosage to 200 milligrams from 600 milligrams, decreasing the number of visits a woman must make to the doctor to two from three, and extending the period when she can take the pill to 10 weeks of pregnancy from seven weeks,” according to the New York Times. There is also evidence that fewer side effects accompany the lower dosage. The same article notes that while the new labeling might be applicable to all states at the moment, at least one state is already working to pass a law that would hold provider’s to the stricter standards imposed in the past.

Context

This FDA approval came at an interesting time for the abortion and contraceptive coverage controversy as, the day before this announcement, the Supreme Court issued an order asking for supplemental briefing in a case on which it had heard oral arguments the previous week and which challenged the contraception coverage mandate of the ACA. Some experts see this as the eight-Justice Court potentially looking for an avenue to strike a compromise on an issue and avoid a 4-4 vote, which would effectively result in the continuation of a circuit split and different laws applying in different jurisdictions on this issue. In this context, pro-life proponents argued that the FDA announcement is a politically fueled move to satisfy the “abortion industry” and pro-choice groups. Others defended it as unrelated to election year politics and as simply part of the FDA’s regulatory responsibility in the face of a supplement drug application.

Do voters really care about health care reform?

In April of last year, the Atlantic told readers that this question would be “the most decisive question” of the upcoming 2016 presidential election: “Will you take away my health insurance?” On February 2, 2016, the House of Representatives, voting mostly along party lines, failed to override President Obama’s veto of the latest attempt to repeal the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) in the form of the Restoring Americans’ Healthcare Freedom Reconciliation Act (H.R. 3762). Yet, while attacks on reform efforts are usual rhetoric for Congressional Republicans as well as most of the GOP presidential candidates, a recent study by the Kaiser Family Foundation shows that voters’ interest in health reform as an issue in the presidential primary race is not as strong as some had predicted. Does this mean that voters do not care about health reform as much as we thought? Further, will this trend continue once the primaries are over and the Republican and Democratic candidates go head-to-head?

Kaiser study

A Kaiser Tracking Poll released in January of 2016 revealed that the ACA does not “rank highly as an issue for voters in the presidential primaries.” While the general cost of health care ranked as the third most important issue—with 28 percent of voters stating that that issue would be “extremely important” to their presidential vote—the ACA specifically ranked eighth overall, with 23 percent of respondents stating it was extremely important to their vote. Other issues ranking above the 2010 health reform were terrorism (38 percent), the economy and jobs (34 percent), the federal budget deficit (28 percent), and gun control (27 percent). Moreover, when respondents were asked to choose the single most important issue in the presidential race, only 4 percent chose the ACA.

CNN poll

A less specific question asked in a recent CNN poll ranked health care in general as the third most important issue in the election. When asked how important, on a scale of extremely important to not that important, a list of issues would be in the upcoming election, 35 percent stated health care would be extremely important, 41 percent said it would be very important, and 18 and 6 percent considered it moderately important or not that important, respectively. The poll also revealed that only 39 percent of respondents were aware of President Obama’s recent veto to the ACA-repealing legislation and that opinions are steady and almost evenly split when it comes to satisfaction with the ACA, with 44 percent having an unfavorable view and 41 percent favoring the reform.

Candidates’ opinions

Current Republican front-runners for the presidential nomination, including Senator Ted Cruz (R-Texas), Senator Marco Rubio (R-FL), and Donald Trump, have expressed their intentions to repeal the ACA, if elected. Yet, there is no one replacement plan that all the candidates agree on. While Cruz and Rubio both voted in favor of the recent attempt to repeal the ACA through H.R. 3762, Trump’s views on the reform have been vague. Beyond “bashing the current law” and promising that “everybody’s going to be taken care of” and “the government’s [going to] pay for it,” Trump’s particular stance on health reform is unknown. The lack of a solid position on this issue for the popular candidate has GOP leaders concerned.

On the Democratic side, while former Secretary of State Hillary Clinton has promised to make general improvements in health care costs, she supports a continued implementation of the ACA. Her sole democratic opponent, Bernie Sanders (D-VT), has indicated that, if elected, he intends to pursue replacing the ACA with a “Medicare for all” single payer system.

As the votes for and against the override of the President’s veto of H.R. 3762 show, it appears that support for health care reform is split between party lines. However, in terms of the current presidential candidates, the views on health care reform are not as uniform. Because of the unique circumstances of the current presidential primaries, it may not be clear to what extent health care reform will be a major deciding issue for the race until the primaries are over and the Democratic and Republican nominations are decided.