Trump Budget Aims to Repeal Obamacare

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By Sara Hansard

The Trump administration still wants to repeal Obamacare.

The fiscal 2019 budget request released Feb. 12 calls for “a two-part approach” to repealing and replacing the Affordable Care Act, starting with enactment of legislation modeled after the Graham-Cassidy-Heller-Johnson legislation “as soon as possible.” That bill, named after the senators who sponsored it, would repeal ACA mandates to buy coverage as well as subsidies for coverage. It would also establish a new state block grant program under which states would be charged with coming up with a new system to replace marketplace subsidies and the ACA’s Medicaid expansion, Karen Pollitz, a senior fellow with the Kaiser Family Foundation, told Bloomberg Law Feb. 12.

The proposed budget also calls for scaling back to 30 days the 90-day grace period people have for paying for ACA plans, which would save $1.3 billion in fiscal 2019 and 2020.

Senate Republicans were unable to pass an ACA repeal bill in 2017, and there appears to be little likelihood they will be able to do so in 2018. However, the budget is an important marker of the administration’s priorities, and some elements could be incorporated into law, such as the tougher grace period provision.

Obamacare Has ‘Destabilized’ Individual Market

“Obamacare has destabilized the individual insurance market, shifted control over health care decisions from consumers and States to the Federal Government, and increased premiums for millions of individuals,” the budget document states.

To address that, the budget calls for a two-part approach to repealing and replacing Obamacare, starting with enactment of legislation similar to the Graham-Cassidy-Heller-Johnson bill. The second part of the budget proposal includes additional reforms “to address unsustainable healthcare spending trends and builds upon the GCHJ bill to make the system more efficient,” it says.

But the idea of enacting legislation like Graham-Cassidy isn’t expanded upon in the budget document, Joe Antos, a health-care and retirement policy analyst with the conservative American Enterprise Institute and a former assistant director for health and human resources at the Congressional Budget Office, told Bloomberg Law Feb. 12.

Repeal Won’t Happen This Year

Moreover, Antos said, “We certainly won’t see that happen this year.” The Senate was unable to pass repeal legislation in 2017 with 52 Republicans, and now there are only 51 Republicans in the Senate, he noted.

Unlike previous Republican budgets, there is no claim to try and balance spending and revenues over a 10-year period, Antos said. “It’s hands off Medicare,” which President Donald Trump pledged to protect during his presidential campaign, Antos said.

The ACA currently requires individuals receiving advance payment of the premium tax credit for exchange plans to have a 90-day grace period to pay their premiums. The budget proposal would reduce that to 30 days.

Congress has already repealed the individual mandate in the ACA, causing health insurers to worry that many healthy people who previously may have faced a penalty for not buying qualified insurance will forgo coverage. That could leave the ACA exchanges with an even higher share of older, sicker enrollees than is already the case.

The mandate that larger employers provide coverage for full-time employees is still in place under the ACA.

Budget Agreement Increases Funding

“The budget is coming out in an environment where Congress just passed a major budget agreement with substantial increases for opioid abuse,” as well as for the National Institutes of Health, Dan Mendelson, president of Avalere Health in Washington, told Bloomberg Law Feb. 12. He referred to the budget agreement enacted Feb. 9. Mendelson was associate director for health at the Office of Management and Budget under President Bill Clinton.

The Department of Health and Human Services has flexibility to make many changes to the ACA through regulations, “and they’re using that flexbility,” Mendelson said. The agency is considering numerous waivers for the Medicaid program, including allowing work requirements, drug formularies and more restrictive provider networks, he said.

“They can do all that outside of the legislative process,” Mendelson said. “I expect they will continue to do that.”

Drugmakers Likely ‘Feel Pretty Good’

Brian Rye, senior health policy analyst with Bloomberg Intelligence, told Bloomberg Law Feb. 12 that drugmakers are likely to “feel pretty good” about the budget proposal.

“Most of the emphasis seems to be on the supply chains,” such as a proposed requirement that pharmacy benefit managers pass on negotiated discounts to Medicare patients, Rye said.

“They seem to be a lot more interested in the patient’s out-of-pocket costs rather than headlines on the list prices of drugs,” Rye said. The budget proposal doesn’t include anything that would give the government more power to negotiate drug prices, he said.

While it’s not likely that Republicans will try to repeal the ACA again, Rye said Democrats may push for Medicare for all in the upcoming 2018 congressional elections. That could spur Republicans to try to return to health care before the end of the year “as a means to get their base excited to come to the polls,” he said.

To contact the reporter on this story: Sara Hansard in Washington at shansard@bloomberglaw.com

To contact the editor responsible for this story: Kendra Casey Plank at kcasey@bloomberglaw.com

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