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Republicans are back on the Hill to work on the bill to replace the Affordable Care Act before the August congressional recess, which has now been delayed by Senate Majority Leader Mitch McConnell in order to give more time for negotiations and an eventual vote. Several Republican senators, including Sen. John McCain of Arizona, have expressed doubt their efforts will be successful. The Knowledge@Wharton show on SiriusXM recently took a closer look at the challenges facing the legislation with guests Scott Harrington, a Wharton health care management professor, Katherine Hempstead, a senior adviser at the Robert Wood Johnson Foundation, and Mary Agnes Carey, partnerships editor and senior correspondent at Kaiser Health News.
Here are five key points from their conversation. (Listen to the full podcast using the player at the top of this page.)
What will happen is anyone’s guess
While there is little agreement about what needs to be done to fix America’s health care system, the experts agree that a quick resolution seems like a remote possibility.
“I’d like to say I know exactly what will happen, but I think it’s a total crapshoot at this point,” Harrington said. “Whether or not the Senate can come together with some sort of proposal that would get the 50 votes is, at a minimum, highly uncertain right now. And if they do, I think it’s a crapshoot about what would happen at the House. I’d say anybody who knows what’s going to happen, unless they have some inside information from a bunch of senators, is speculating.”
Hempstead said with so much confusion, a bipartisan alternative is becoming less of a “scare tactic” and a more credible solution.
“We’re not hearing that much talk about the bill because we don’t exactly know what the new language looks like,” she said. “But it does seem like a really hard course to steer.”
Carey said senators are still making changes to the bill, even as Senate Majority Leader Mitch McConnell is expected to unveil a revised version of the bill on July 13.
“They’re also expecting a new score from the Congressional Budget Office to see how that would affect the uninsured rate, how much it would cost. It’s definitely a moving target,” she said.
The individual market is a top problem
The success of the Affordable Care Act or its replacement hinges on the existence of the individual marketplace where citizens can buy insurance plans at competitive rates, so it’s important for lawmakers focus on ways to shore up that marketplace.
“That’s the balancing act in health care. You squeeze one part of the balloon, the other part pops.”–Mary Agnes Carey
“There’s been a little bit of good news on that front that maybe things are starting to stabilize, admittedly with a much lower population of insureds in the individual market than had been originally forecast,” Harrington said. “Whatever happens on the Hill, it’s very likely that significant attention will be devoted to what might be done to have a path to stabilize the individual markets.”
Hempstead thinks there is potential for a political compromise on the issue because it’s so important.
“With the individual market, it seems to me like most people would agree that some more re-insurance would be helpful. It’s definitely something that’s much more needed in some states than others. But I think across the board there would be support for creating some more structures that would permit re-insurance and paying the cost-sharing reductions. While it is deeply unpopular, I think there is a conversation that could be had about the individual mandate.”
She also agrees with Harrington’s assessment that the marketplace isn’t in shambles.
“One of the things we’ve seen is that the market is a little bit less healthy and a little bit smaller than people anticipated. That doesn’t mean it’s in death spiral or it’s collapsing or it’s failing. But I think there are things to do that would help to bolster it.”
The marketplace is an especially sticky problem for lawmakers, Carey said.
“I think the Republican Party is wrestling, and so is the White House and the administration, about how much comfort do you want to bring to insurers or beneficiaries in the individual market versus if they don’t do these things and walk away, and how much will they get blamed politically.”
Lawmakers need to dive into the risk pools
The problem with risk pools is at the heart of what doesn’t work with the Affordable Care Act.
“The Affordable Care Act never really attracted enough young and healthy people to balance out the risk pool, and that’s something they’re wrestling with,” Carey said.
She said some Republicans support the idea of putting high-risk people in their own pool and subsidizing that pool, but that idea hasn’t worked in places where it’s been tried.
“So that’s the balancing act in health care. You squeeze one part of the balloon, the other part pops,” Carey said. “It’s really complicated.”
Harrington said there is much conversation about using direct subsidies to cover the high-risk patients and lower premiums, which in turn could attract more healthy people into the pool and achieve stability.
“There are a variety of ways that can be done, and I think a positive aspect of both the House and Senate bills is there is a recognition that some form of re-insurance, at least for a period of years, would be helpful to stabilize the market,” he said.
Hempstead said re-insurance is a “train everybody can ride.”
“Before the ACA, you had all the rules written in favor of the healthy people so that unhealthy people couldn’t get coverage. Now they feel like maybe this is too much the other way,” she said. “Re-insurance is a more politically palatable way to essentially accomplish the same thing and inject more money from elsewhere into the system, and that would have the benefit of lowering premiums.”
She said her long-term hope is that there is a fruitful individual marketplace that grows organically as more people migrate to it and away from group coverage.
“Having a functional individual market where you buy comprehensive insurance seems like a really important piece of economic infrastructure that I’m hoping we can preserve and improve going forward,” Hempstead said.
Medicaid remains a quagmire
Medicaid is another issue so thorny that it seems unlikely to inspire a bipartisan agreement. The experts think lawmakers would do better to excise the topic from the rest of health care reform and work on it separately.
“A positive aspect of both the House and Senate bills is there is a recognition that some form of re-insurance, at least for a period of years, would be helpful to stabilize the market.”–Scott Harrington
“It’s an extraordinary, comprehensive and wide program that affects 74 million people,” Carey said. “This idea of changing the fundamental funding structure on Medicaid, taking it from the shared federal/state program we now have with varying rates to a capped allotment means states are going to have to make a lot of decisions on who they cover, how much they spend, what services are offered. That is really popping up as a key obstacle for the Republican Party that I don’t think they anticipated.”
The clock is ticking
Carey said the Trump administration is operating under the notion that if the Republican replacement bill isn’t passed and the ACA goes away, leaving millions of Americans without insurance options, the Democrats will be desperate to come to the table.
That’s an unlikely scenario.
“I don’t think [Senate Minority Leader] Chuck Schumer would be the least bit inclined to negotiate with him with any urgency or speed and would use that leverage to extract what they want,” Carey said. “And they feel very confident the political damage would go right onto President Trump and the Republican Party.”
Harrington said the Republicans are between the proverbial rock and a hard place.
“Whether or not they can push those rocks aside and slide out of this is an open question,” he said. “I think the politics on this have really changed towards having it really be all bad for the Republicans at this point.”
So, will there be a vote before the August recess?
Hempstead thinks there will be a vote, but it won’t be positive. Carey and Harrington predict there will be a push in the last week of July to get something done.
“But the key thing will be if they don’t have a piece of legislation that the House can pick up and pass on a quick roll call, then it may not happen,” Carey said.