October 13, 2017
Good morning ... President Trump left little doubt yesterday that he intends to do as much damage as he can to the Affordable Care Act's insurance markets. And he can do a lot.
Trump takes a sledgehammer to the ACA
Trump's decision to cut off the ACA's cost-sharing subsidies last night will throw insurance companies, states, consumers and Congress into yet another round of panicked uncertainty.
- Insurers have already locked in their premiums for next year. Many of them will try to go back and raise their rates or, if they can't do that, try to pull out of some markets entirely.
- This will create even more pressure on Congress to guarantee funding for the subsidies, as part of a newly urgent bipartisan ACA fix. Having a fresh health care crisis on the front burner can't be good for tax reform, and getting an agreement on the ACA won't be easy.
- If Congress doesn't act quickly, there's a decent chance insurers will sue the administration. They're still legally obligated to reduce their customers' out-of-pocket spending, and the law says they're supposed to be compensated for that.
The fix: Congress can solve this. University of Michigan law professor Nicholas Bagley, an expert on this issue, told me that if Congress appropriates the money for these subsidies, they would begin flowing again immediately.
- Sens. Lamar Alexander and Patty Murray have been trying to make a deal to stabilize the ACA.
- And Rep. Mark Meadows told my colleague Caitlin Owens last night that he's been involved in a similar effort — but only with Republicans — since the last repeal-and-replace bill failed.
The bottom line: No one benefits, in any practical way, from Trump's decision. Consumers lose via higher premiums and fewer choices. Insurance companies lose money. Republicans lose time and energy for tax reform. There's only one conceivable benefit here for Trump — screwing "Obamacare."
Where Trump wants to take the health care system
Trump's decision to ax the cost-sharing subsidies came just hours after he signed a big executive order on health care. That order is short. It's vague. It leaves critical questions unanswered. But it does tell us where this administration wants to take the health care system. And that alone is significant.
Be smart: Insurance can either cover a lot and cost a lot, or cover less and cost less. The ACA said insurance should be reasonably comprehensive and accessible to people who need it, even if that meant healthier people had to pay more. That foundational view of insurance is what Trump's order would attempt to reverse.
The bottom line: The ACA sought to flatten out the disparate experiences of the healthy and the sick. Trump would begin to resegregate them.
How it works: Association health plans (AHPs) — letting small businesses pool together to buy insurance coverage as if they were one large business — got most of the attention in the lead-up to yesterday's announcement. But, depending on how all of this is actually implemented, the order's other provisions might pose a greater threat to the ACA's core principles.
- "AHPs, I do not believe are going to sell junk insurance," said Chris Condeluci, an attorney and policy consultant who worked on the Republican side of the Senate Finance Committee during the ACA debate.
- Association health plans are regulated a lot like the health plans offered by larger employers. Some of the ACA's consumer protections still apply: the plans cannot impose annual or lifetime caps on benefits, for example. They also can't charge one person in the association a higher premium because of a pre-existing condition.
- The bigger threat to the ACA's framework might come from expanded access to short-term insurance plans, which are hardly subject to any benefit mandates and which provide few coverage guarantees.
- How severely each of these policies would undercut the ACA depends on how they're implemented.
What to watch next
Trump's executive order left a lot of big, important questions unanswered. So we won't know the order's specific effects until the Labor Department and the Health and Human Services Department write the regulations to implement it. Here are some of the most important decisions those departments will have to make:
Can individuals sign up for association health plans?
- These plans have historically been a tool for small businesses. And if they stay that way, their overall effect would likely be pretty modest.
- But if self-employed individuals are allowed to sign up for association plans, the ACA could take a bigger hit, as younger, healthier consumers would likely leave the individual market.
- It stands to reason that Trump would want to let individuals enroll in association plans, to inflict the maximum possible damage on the ACA. But that might not be legal.
Do short-term plans satisfy the individual mandate?
- Short-term plans are so skimpy that, under the current rules, people who use them for a full year would still have to pay the ACA's penalty for being uninsured. But the Trump administration could change those rules, making the plans more attractive.
Do new employer options satisfy the employer mandate?
- The ACA requires big companies to offer health insurance to their workers, or pay a penalty. Trump's executive order would make it easier for them to instead offer money to help their employees go buy a plan on their own.
- But before big businesses will exercise that option, they'll need strong assurances that they won't rack up fines as a result.
Anthem rolls back rate hikes in California
Anthem Blue Cross agreed to trim back its premium increases in California's ACA exchange after state regulators questioned the size of the hikes, California Healthline reports. Anthem had predicted increases in underlying health care costs that were far greater than its competitors' projections.
Yes, but: Even though Anthem's rate hike is smaller than it otherwise would have been, it's still more than 37%. California regulators earlier this week decided to let insurers raise their rates higher than usual in case the administration stopped paying the ACA's cost-sharing subsidies. (Good call!)
The new partnership to advance immunotherapy
Most cancer patients still can't get immunotherapy — a new kind of treatment that uses the body's immune system to fight the cancer. That's because it's not very far along in development. But now, the National Institutes of Health is launching a five-year partnership with 11 biopharmaceutical companies to help develop new kinds of immunotherapy drugs, per CNBC.
What to watch: One big problem with immunotherapy is that some patients respond better than others, and scientists aren't sure why. That's why the new research is needed. "We need to bring that kind of success — and hope — for more people and more types of cancers, and we need to do it quickly," NIH director Francis Collins said in a statement.
Adventures in potentially unethical stock trading
Remember the Tom Price stock trading story? It lives on. The Office of Congressional Ethics released a report yesterday recommending a continued investigation into allegations that Republican Rep. Chris Collins made improper trades that leveraged his power as an elected official.
And, who refused to cooperate with the OCE's investigation? None other than Price, the former HHS secretary, whom Democrats have also accused of acting unethically with the same stock at the center of the Collins investigation.
What happens next: The OCE board recommended that the House Committee on Ethics continue to investigate two of the three allegations against Collins. Here are the allegations and the committee's recommendations:Dismissed: The allegation that Collins bought discounted stock in Innate Immunotherapeutics that was not available to the public and that was offered to him based on his status as a House member.Further review: The allegation that Collins, a board member of Innate, may have shared nonpublic information in the purchase of Innate stock.Further review: The allegation that Collins took or requested official actions that would help Innate, which he had financial interest in, when at a NIH meeting where he requested a NIH employee meet with Innate employees to talk about clinical trial designs.
What we're watching today: Fallout from the end of cost-sharing subsidies.
Sen. Susan Collins is giving a speech about health care this morning, and that's when she's expected to announce whether she's staying in the Senate or running for governor of Maine next year.
Get in touch: Send me your thoughts, ideas, suggestions, feedback, whatever you've got: [email protected]