GOP Obamacare repeal and replacement plan riles patients, hospitals

The long-awaited House Republican plan to replace the Affordable Care Act will hurt low-income consumers who rely on federal subsidies or Medicaid for their coverage, as well as the hospitals who are required to treat them whether or not they are insured, health care experts say.

It's harder to find the winners under the new bill, a joint effort by House Republicans including Speaker Paul Ryan. Much of the impetus for overhauling the law surrounded the often-soaring premiums for the 15% of people who don't receive many or any subsidies to pay for their insurance. The healthiest among those people can forego insurance without risk of a tax penalty. If they do buy it, it might be less expensive, especially if they are younger

However, they'll also get much less generous benefits — something 50-somethings might appreciate when it comes to maternity coverage they don't need. Others will be in for an expensive shock if they become pregnant unexpectedly or require any of the other benefits the ACA required in all plans. If they decide to wait to buy insurance, consumers will pay about 30% more for premiums to discourage them from waiting until they are sick to sign up. .

Republican lawmakers plan to move forward with the legislation without an estimate from the Congressional Budget Office on the effect it will have on health care costs or enrollment.

Still, the 30% premium jump should prove popular with insurers, says Christopher Condeluci, a former Senate Finance Committee Republican counsel who helped draft portions of the ACA.

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"What (insurers) would like is to make sure the markets don’t collapse," says Condeluci, now a health care consultant. "If there's some sort of continuous coverage provision, they’d be OK with it."

Low-income people who have gained coverage under the ACA "get hit particularly hard by this proposal," Kaiser Family Foundation senior vice president Larry Levitt says. That's in part because the bill proposes eliminating the subsidies that offset the costs of co-payments and deductibles and reduces the amount of tax credits to help them buy insurance. These people are then left with the choice of paying more for the insurance or dropping it if they can't afford it.

The new plan also offers refundable credits - ranging from $2,000 to $14,000 for a family a year - that become more generous with age. (They do begin to phase out above $75,000 in income a year, however.) These could be used to buy any type of insurance including the catastrophic plans that only kick in for very large health expenses and that the ACA largely eliminated.

The additional amount insurers can charge older people than the youngest would increase from 3 to 1 to 5 to 1, so any additional tax credit could easily be more than offset. And without subsidies to offset out of pocket costs, the bill would increase the cost of insurance for older consumers.

The Democratic-oriented Center for American Progress (CAP) published an analysis of the bill Tuesday that estimated it would increase costs for the average enrollee by $1,542 this year if the bill were in effect today. In 2020, CAP said it would increase costs for the average enrollee by $2,409.

The most controversial provisions relate to Medicaid, which interviews by Hart Research late last month found was an overwhelmingly popular program with Democrats, Republicans and Independents.

"The problems of congressional Republicans on health care are likely to deepen, as the survey results show they are on the wrong side of public opinion on Medicaid," says Democratic pollster Geoff Garin, president of Hart Research. "

The expansion of coverage of Medicaid would be gradually phased out in favor of "block grants" each year to states that they could use however they choose or per-person funding. Either way, both sides agree it will result in a cut in benefits or people covered.

Aviva Aron-Dine, a former senior counselor at the Department of Health and Human Services in the Obama administration, says the only reason to fund Medicaid with per-person caps "is to cut it."

"The cuts would be the deepest exactly when the need is greatest," said Aron-Dine, now a senior fellow at the Center for Budget and Policy Priorities.

Leana Wen, a physician who is Baltimore's health commissioner, still sees patients in an urgent care clinic in her city and says many are "terrified" about losing coverage. She cites one woman on a subsidized plan she bought on the ACA exchange who was able to get treatment for diabetes and mental health problems.

"Insurance is her rock and what got her life back on track," says Wen. Patients are "right to be concerned because this is taking away coverage from the most vulnerable."

The House measure faced possible Senate defections before it was even announced late Monday.  Four Republican senators from states that expanded Medicaid to all of their lowest income residents wrote to Senate Majority Leader Mitch McConnell, R-Ky., about its likely effect on the number of people without insurance in their states. Kentucky is one of the states that will be most affected as at least 500,000 people got health coverage. often for the first time, under the law.

How other interests fare:

• Hospitals.  Without a CBO score that shows how much the plan will cost and how it will affect insurance coverage — especially Medicaid — hospitals are bracing for the worst.

"Our hospitals could not sustain such reductions without scaling back services or eliminating jobs," said physician Bruce Siegel, CEO of the trade group America's Essential Hospitals, which represents hospitals whose patients include the most vulnerable. "Congress must work with all stakeholders to ensure that those who have coverage now do not lose it, that entitlement reform does not shift costs to states and providers, and that reform sustains a strong and secure safety net."

Medicaid's reimbursement rates are the lowest in health care, but hospitals are happy to have it if the alternative is free care. They don't want to see the large influx of uninsured patients likely to result if funding is capped or otherwise limited as it will either cover fewer people, fewer services or both.

"The hospitals are concerned that those people be covered and that there is still enough money to provide the level of services they're providing today," says Nancy Taylor, a partner at law firm Greenberg Traurig who represents employers and hospitals.

Health and Human Services Secretary Tom Price and other Trump administration officials have been careful to say that everyone will still have "access" to insurance. If people can't afford it, though, that's bad news for hospitals, which are required to at least stabilize them under law.

"There’s little doubt that the number of people uninsured would rise under this proposal," says Levitt. "Hospitals will be concerned about what that does to their finances."

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• Insurers. "From an insurance perspective, this is a pretty balanced approach," says Dan Mendelson, CEO of Avalere Health, which represents health care businesses including insurers.

Many people believed the tax penalties for remaining uninsured were too low to have much effect.

"The mandate isn’t working now anyway," says Mendelson. "Millions of people who should have been signed up but aren’t."

So by getting a potentially stronger stick to encourage people to buy insurance when they are healthy — similar to the much higher rates people have to pay if they wait to sign up for Medicare — Mendelson says this is a "continuous coverage" provision.

Levitt is less optimistic. Insurers would get a lot more flexibility than they had under the ACA, which they will appreciate, but they will still be required to guarantee coverage for pre-existing conditions with no mandate to buy insurance that will "push healthy people to buy coverage," he says. These healthy people are needed to offset the costs of insuring the sick.

Despite provisions that should make the individual insurance market more stable for insurance companies, Levitt says he isn't convinced it's an improvement for them.

"Still it’s not clear this provides a more stable insurance market than the ACA,"  says Levitt. That could lead to more insurance company departures from the ACA exchanges, less competition and higher premiums.

• Public health. While health commissioners may not have the lobbying clout of industry, Wen says the Republicans plan to eliminate a public health and prevention fund that was part of the ACA "punishes every citizen."  The fund, which equals 12% of the Centers for Disease Control and Prevention's budget, affects national security, says Wen.

"This funding allows those of us on the front line to fight bioterrorism and allowed us to fight Zika and Ebola," says Wen.

John Auerbach, CEO of the non-profit Trust for America's Health, agrees the effect would be sweeping.

"Losing this funding would wreak havoc on our efforts to reduce chronic disease rates, immunize our children, stop the prescription drug and opioid epidemic and prepare the public health system to prevent infectious disease outbreaks," he said in a statement.

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