Five Questions for Andy Slavitt, Former Medicare/Medicaid Chief

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By Colleen Murphy and Alex Ruoff

Members of Congress have begun a two-week recess following a rocky start to the legislative session.

Efforts to overhaul the U.S. health care system seem stalled, or at least slow-moving, since negotiations faltered in the days leading up to recess. The White House pushed for a March 24 floor vote on legislation to replace the Affordable Care Act, but House leaders pulled the bill from the floor hours before, because it didn’t have the 216 Republican votes needed to pass.

Lawmakers then began two weeks of closed-door negotiations on the bill, with House leaders desperately trying to court hard-liners in the House Freedom Caucus. The final offer would have let states decide what benefits must be covered in insurance plans and would have repealed the ACA’s community rating system, which requires insurers to provide policies within a given area at the same price to all people regardless of health status.

Those changes turned off moderate Republicans and appeared to sink the bill further. House lawmakers left April 6 without reaching agreement on bill adjustments—and no floor vote is scheduled when they return. Still, some lawmakers say rewriting health-care laws needs to happen soon—and leaving the existing structure in place will complicate efforts to overhaul the tax code.

Andy Slavitt is the former acting administrator of the Centers for Medicare & Medicaid Services (CMS) at the Department of Health and Human Services. Now a senior adviser at the Bipartisan Policy Center, he has been meeting with insurance companies, hospitals, governors and lawmakers through the congressional tumult. Bloomberg BNA talked with him about what to expect on the health-care front when the House returns from recess April 25.

1. Efforts to hold a vote fell apart during negotiations before recess began. What can we expect to see from Congress when members get back?

Slavitt called the bill “bad policy with bad politics on top of it.” As written, it would lead to massive drops in coverage, significant hikes in premiums and fewer protections for individuals with pre-existing conditions—problems that would apply to the districts of most House members, even those who support the bill, he said.

“I think the tactic that we’ve seen over the last couple of weeks, which is to try and get Freedom Caucus support, has only made the bill less palatable for moderates. I won’t put it past anybody to twist arms and get something out of the House, because there are lots of other factors at work that are unrelated to what’s in the best interest of health care—such as taxes and infrastructure as well as other legislation,” Slavitt said.

The nonpartisan Congressional Budget Office estimated that as many as 24 million people would ultimately lose insurance under the Republican plan. Many Republicans in the House and Senate have also raised concerns that the plan would decrease tax credits for low-income individuals and those in their 50s and 60s. The CBO also said those groups would see their premiums increase.

2. Republicans had hoped to complete the ACA repeal, and scrap its subsidies, so they would have more budget flexibility to make tax cuts without adding to the deficit. If they can’t reach a deal, what do you expect to see from tax reform?

Trying to jam through controversial provisions, such as one that taxes imports and exempts exports, “could face similar attacks” in tax reform, Slavitt said. President Donald Trump has thus far seemed at best lukewarm on border adjustability, and some senators have declared it dead on arrival.

If Trump decides to protect Medicaid from cuts and takes “the draconian elements off the table,” he could pursue tax reform that is more appealing to moderate Republicans—or even bipartisan, Slavitt said.

“He won’t have as big a tax cut if he does that, but he will show he can get something done. I don’t know whether he’s going to make that choice,” Slavitt said.

3. How should the Trump administration be working to improve health care markets?

Thus far, the administration has acted consistently with Republicans, Slavitt said, choosing to “repeal funds, not pay cost-sharing reductions, talk down the market by saying it’s going to explode, and scare insurers out of the market.” But if they worked with states and insurers to make sure they had as much health care coverage as possible, it would be a step forward.

The administration should reassure states and insurers it wants as much coverage as possible, and wants to help create competition and save the markets, Slavitt said. For example, he sent staff to Arizona in the summer of 2016 because the market there wasn’t profitable and insurers had questions. That effort to listen and solve problems could be a lesson for the Trump administration, he said.

“I had an insurer tell me the other day they’re unlikely to enter and participate in the marketplace because there will be no near-term support from the administration. This administration isn’t doing anything to make sure these markets are working,” he said.

CMS also has tools that could help strengthen markets, like the ACA’s Section 1332 State Innovation Waivers. Two states have utilized this section to add reinsurance pools that help insurers underwrite certain risks. If CMS advertised those mechanisms “as solutions,” and offered to help states work applications, it would be a boon for markets, Slavitt said.

4. Republicans initially planned to scrap all the taxes in the Affordable Care Act, though that didn’t quite happen in the final version of the bill. Would you expect to see similar negotiation around those taxes if lawmakers pick the issue back up?

In the night before the scheduled March 24 vote, House leaders offered an amendment that would keep the 0.9 percent Medicare surtax in place—an olive branch to recalcitrant moderates. Such efforts may not happen in the future, Slavitt said, as lawmakers are “clearly so far of the view” that the best chance to get a bill out of the House is if it has the backing of hard-liners in the House Freedom Caucus.

But that comes with a major drawback, Slavitt said.

“if that’s the direction they go, I think the bill will get less and less popular with mainstream Americans and as a result, many, many congressional districts, moderate or even conservative,” will disapprove of the bill, he said.

5. What’s going to happen with HealthCare.gov this year? Slavitt was hired by the Obama administration after the disastrous premiere of HealthCare.gov, the federal health insurance exchange website. The site crashed shortly after it launched, preventing thousands of Americans from buying insurance plans in the first open enrollment period since the ACA took effect.

The site has since run smoothly and HHS has worked to make it a central destination for people seeking answers about how to obtain health coverage.

Slavitt said he isn’t confident the Trump administration will continue to help improve the website.

“It’s not hard to stop answering phones and fire call center staff and not manage your technology,” he said. “I think they don’t want it to work and don’t expect it to stick to their administration, that any failures will stick to the Obama administration.”

To contact the reporters on this story: Colleen Murphy in Washington at cmurphy@bna.com; Alex Ruoff in Washington at aruoff@bna.com

To contact the editor responsible for this story: Meg Shreve at mshreve@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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