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by Meg Marshall
Published on March 29, 2017

Over the past few weeks, Americans have watched as the drama played out with a proposal from Republicans in the U.S. House of Representatives to repeal and replace the Affordable Care Act (ACA). On Friday, the American Health Care Act (AHCA) was pulled from consideration on the House floor, which ended the momentum for Republicans to use a simple majority to pass their repeal-and replace-proposal.

Afterward, President Trump tweeted that the way forward was to let "Obamacare explode." However, this week Republican leadership in the House indicated repeal-and-replace discussions aren't over, and they will soon release more details on their strategy. This leaves many inside and outside the beltway asking: "Now what?"

While the ACA lives to see another day, there are critical issues that require attention. We've seen premiums, deductibles and out-of-pocket expenses increase, lower overall enrollment in exchanges, and less competition with fewer health plan choices. In February, Humana announced they will not participate in the exchange market in 2018. Other insurers face similar tough decisions in the coming weeks as they consider their rate filings and consider whether to pull out of the exchanges.

While the AHCA (or any iteration thereof) has been shelved for the time being, a two-pronged approach can still be used to achieve some Republican campaign promises while making changes to stabilize the market. This approach includes administrative actions by the executive branch, such as enforcing the individual mandate, and legislative advancements by Congress.

How the executive branch may bring change to the ACA

ACA's scope of authority: The HHS Secretary

Newly confirmed HHS Secretary Tom Price and CMS Administrator Seema Verma have ample opportunity to make substantive changes through authority granted by the ACA. For example, the ACA contained approximately 1,500 citations that begin with the phrases "the Secretary shall" or "the Secretary may," and resulting regulations could be changed through the rulemaking process to reflect new policy, including changing the annual enrollment period. Additional activities could include maintaining the exchange website and restoring ACA outreach.

State flexibility for Medicaid

Recently, Price and Verma wrote to governors encouraging them to consider "the next wave of innovative outcomes" for their Medicaid populations through Section 1115 waivers, which included reviewing work requirements and cost-sharing plan designs that include health savings account-like options. Nineteen states have refused expansion, which would move an arguably less healthy population out of the exchanges. We've seen some non-expansion states express interest recently, including Kansas, North Carolina and Maine.

Cost-sharing reductions for households

The administration may additionally influence future coverage outcomes through cost-sharing reductions. These subsidies, used to purchase insurance in the exchange, were made available to households earning between 100 and 250 percent of the federal poverty level through the ACA. Many households rely on these subsidies to purchase affordable coverage. In 2015, 57 percent of exchange enrollees received the reduction.

A commitment by the Trump administration to continue these payments along with appropriate funding from Congress would go a long way to stabilize the insurance market. This is currently at issue in pending legislation (House v. Price, formerly House v. Burwell) where the U.S. House of Representatives argues that Congress never appropriated the money to pay the insurers. Should cost sharing reductions be ended without any replacement, insurers would incur significant losses and be expected to exit the individual market.

How Congressional action may bring change to the ACA

The second prong relies on new bipartisan legislation or other legislative vehicles to advance changes to the ACA. The most pressing issue will be funding the federal government past April 28, when the current continuing resolution ends.

While bipartisan legislation seems far-fetched in the current environment, there are opportunities for legislators to reach across the aisle. Last week, the House passed legislation making it easier to purchase health insurance across state lines and enabling small businesses to form association health plans. Both the Children's Health Insurance Program and FDA user fees must be reauthorized by the end of fiscal year 2017, and the bipartisan issues of telehealth and addressing current anti-kickback laws may see more attention in the coming months. And of course, the 2018 budget process begins in May.

Health care reform beyond the ACA

We also expect HHS will soon turn its attention toward other, non-ACA issues. The administration has affirmed its intent to bend the cost curve by addressing prescription drug pricing and supporting the continued movement toward value-based and bundled payment programs.

Also compelling is President Trump's executive order to create a commission to address the ongoing opioid crisis. HHS will soon get to work on health IT-related issues facing providers, such as Meaningful Use Stage 3, hardship exemptions for 2016 and the implementation of MACRA Quality Payment Programs, which require action to define approaches for quality, access and transparency.

The health care industry is innovative and resilient, embracing a collective responsibility to make the U.S. health care system better. We don't expect the government to solve every problem. Even though it may feel like the defeat of the AHCA signaled continuation of the status quo, health care will remain a persuasive topic for some time.

Perhaps now we will see a renewed interest in policymakers setting aside partisan differences to focus on the common goal of making the U.S. health care system less expensive, less fragmented and less broken.

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