As we have mentioned before, the consequences of failure to pass the American Health Care Act would be significant. Over the past week some members of Congress were awakening to the reality of those consequences.
They begin with Trump Tweets:
(If you think it is strange that your policy analyst is quoting Twitter messages from the president, you are not alone. This modern version of the fireside chat takes some getting used to.)
Trump Tweets have already been pretty effective at bringing drug companies and manufacturers to heel, why not the Freedom Caucus?
At the same time that Trump is heaping ridicule on the arch conservative members of the House, he was also pursuing a little triangulation by reaching out to Democrats. This week at a bipartisan get together at the White House, Trump said: “I know that we are all going to make a deal on health care. That’s such an easy one.” The overtures, sincere or not, are probably a bigger threat to House ultra-conservatives than Trump’s direct criticisms as bipartisan cooperation would make votes from the Freedom Caucus and Republican Study Committee less necessary.
Another Trump Tweet:
In case some members had a little trouble understanding what Trump Tweets meant, Paul Ryan put a fine point on it Wednesday by telling CBS News:
“This is a can-do president who’s a business guy, who wants to get things done, and I know he wants to get things done with a Republican Congress. But if this Republican Congress allows the perfect to be the enemy of the good, I worry we’ll push the president into working with Democrats. He’s suggesting that.”
Translation: “Freedom Caucus, your phone calls to the White House are not going to be returned.”
Meanwhile, the Senate is acting like a group of upper classman once again being forced to baby-sit the middle school. Senator Lamar Alexander, Chairman of the Senate HELP Committee, suggested the answer lies in something akin to the president’s backup strategy which is bipartisan legislation. Mitch McConnell, appeared to think the House was playing checkers when the situation called for chess, particularly in light of the pending problems of the ACA exchanges.
“Our Democratic friends ought to be pretty happy about that because we have the existing law in place and I think we’re just going to have to see how that works out.”
Translation: “I am pretty sure the individual market is not ‘stable’ so I will just wait for the Democrats to throw up the white flag.”
What does it mean to you?
Repeal, Replace, Reform or whatever is not dead yet.
Nothing whatsoever is going to happen until there are absolutely the votes to do it. There are several schools of thought on how things may proceed:
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The Senate will lead. Reconciliation is loaded down by Senate rules. Senate leadership is in the best position to consult with the Parliamentarian and navigate those rules to the best effect. The Senate is also a more moderate body and the product they develop is more likely to appeal to moderates on the House side and the president himself. Senator Hatch, Chairman of the Senate Finance Committee would like to see, at a minimum the ACA-related taxes repealed.
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The Senate would develop bipartisan legislation that either addresses problems with the ACA on a piecemeal basis or offers full repeal and replacement. The Cassidy-Collins bill is currently the most complete thought in the Senate on the issue of the ACA repeal and replace. Senators Lamar Alexander and Bob Corker introduced a bill to permit waiver of the individual mandate when there is no insurer – as is the case in 16 counties and rising in east Tennessee. There are other small scale ideas floating around. None of them, however, fit the bill of repeal.
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The House will resurrect the FY 2017 reconciliation bill. This would require a significant about face for some members of the Freedom Caucus. Rumors flew earlier in the week of promising headway – which, if you were Mark Meadows, Chairman of the Freedom Caucus, you want in light of Trump Tweets just before you head home for the holidays.
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The House will also take up some small scale bipartisan fixes to address problems in the individual market and oversight of Medicaid.
Nor is it quite alive.
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The moderate Tuesday Group, sensing the unexpected gift Trump has given them to finally put the Freedom Caucus down, will not agree to meet. The message? Come our way or no deal.
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The Senate is no longer interested in the juvenile drama on the House side and has signaled it won’t be cooperating unless it is a bipartisan solution.
The punchline? The individual market is far from stable and Governors, having come so close to possible reforms are not likely to surrender that dream easily. The ACA, in so many ways, does not serve the people it intended to help. That fact is not going away no matter what Congress does – or more accurately- does not do. By hook or by crook, something’s gotta give.
A few things to watch:
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(Non) resolution of the cost-sharing lawsuit, House v. Burwell (now Price). Hard to know how the House extracts itself from this pickle. They sued and won on two points they are not likely to surrender: 1.) The House has standing to sue another branch of government; and 2.) The House must appropriate the ACA cost-sharing subsidies each year. The Obama administration had appealed the decision. Now the Trump administration is in the uncomfortable position of either moving forward with the appeal that contradicts official White House policy on the ACA or withdraw the appeal and let the ruling stand. We are betting they just keep the whole thing on ice as long as possible to see if a legislative solution (see above) presents itself while continuing to quietly pay the CSR subsidies. Unfortunately, we do not believe that posture will offer enough comfort for insurers to stay in the individual market.
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Earnings season announcements about participation in individual market especially from ANTM and MOH. Non-public insurers will need to submit their applications to CMS by June 21. At that point, it will be more clear whether the problem of insurer participation is a problem or a crisis.
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Submission of Section 1115 waivers and, to a lesser degree, Section 1332 waivers from states interested in implementing the reforms Congress has long contemplated. CMS has already sent an open invitation to Governors to do so.
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Efforts to expand Medicaid under the ACA vision which we expect will be redirected to a vision more in keeping with that of the CMS Administrator and the HHS Secretary.
- Extension of the Continuing Resolution funding the government that could serve as a vehicle for resolving the impasse
Key dates:
- April-May CMS finalizes market stabilization rule
- April 7th, Congress leaves for Easter/Passover Holiday
- April 28th, The current Continuing Resolution funding the government expires and must be renewed by midnight
- June-July, Interested states may begin submitting Section 1115/1332 waivers
- June 21, Insurers submit initial application for Qualified Health Plans sold on exchanges
- Sept. 11, CMS completes review of final Qualified Health Plan applications
- Debt Ceiling approval after exhaustion of extraordinary measures Oct/Nov
Call with questions. We are always here trying to conjure up more Monty Python allusions.
Emily Evans
Managing Director
Health Policy
@HedgeyeEEvans
