What’s Next After Health Care Bill’s Failure in Congress?
Despite controlling the presidency, and both houses of Congress, the Republican’s bid to repeal and replace the Affordable Care Act (ACA) failed. The Republican’s replacement bill - the American Health Care Act (AHCA) - was pulled before proceeding to a vote in the U.S. House of Representatives, as it apparently lacked the votes to pass. Here’s what businesses need to know now that this (first?) attempt to repeal the ACA failed.
Despite years of pledging to repeal the ACA, and passing many repeal bills during the Obama presidency, Republicans could not reach consensus within their caucus with regard to the AHCA. In particular, conservatives within the party, the so-called “Freedom Caucus,” did not support the bill.
The proposed legislation suffered a crippling PR blow when the Congressional Budget Office (CBO) came out with an analysis that stated that the number of persons with health insurance coverage would be reduced by 14 million in 2018, 21 million in 2020, and 24 million by 2026. The CBO also projected a 15 percent to 20 percent increase in premiums over the next two years under the new legislation. Other controversial components of the AHCA involved the phase out of the Medicaid expansion and the addition of a requirement that able-bodied adults work in order to receive benefits. Despite trying to fashion a bill that would appeal to both moderate and conservative elements of the party, the AHCA died under criticism from both factions.
The debate over the Affordable Care Act is by no means over. In the last week, Republicans - led by Vice President Pence - have been working to reach a compromise on new legislation.
House Speaker Paul Ryan has described the renewed talks as "conceptual" in nature, but here’s what is being discussed according to the Washington Examiner:
The compromise would allow states to opt out of forcing insurers to cover 10 essential health benefits in plans, including maternity care and hospitalization. The states could also opt out of forcing insurers to comply with a community rating mandate, which today requires them to offer the same rate to an entire geographic area, and bars them from charging sicker people much more. But the states would have to get a waiver to opt out of either regulation, and it remains unclear what that waiver would entail...Meadows added that the mandates for insurers to cover people with preexisting conditions and letting kids stay on parents' plan until 26 years of age will remain in place. However, the community rating mandate was a key driver for ensuring coverage for people with preexisting conditions. Without the mandate, insurers could charge people with preexisting conditions exorbitantly high prices, making coverage hard to achieve. A community rating, which forces insurers to charge the same rate throughout a geographic area, would ensure that insurers couldn't charge a person with preexisting conditions [vastly higher rates].
Despite discussions about a potential compromise, it does not appear that any deal is imminent that would satisfy the different factions within the House.
In the meantime, the ACA remains in effect. Just because the AHCA was pulled doesn’t mean that existing problems with the ACA are going away, however. Indeed, last week another major insurer announced its intention to exit most ACA insurance markets in the coming year. According to a Reuters report:
Anthem Inc is likely to exit from a large portion of its Obamacare individual insurance markets next year, Jefferies analysts said, nearly a week after Republican leaders pulled legislation to overhaul the U.S. healthcare system.
Anthem is one of the few health insurers that still sells plans under Obamacare. Humana Inc, Aetna Inc and UnitedHealth Group Inc pulled out after reporting hundreds of millions of dollars of losses.
We will continue to keep you posted about new developments in the ongoing saga involving the federal government’s attempts to remake the U.S. health insurance marketplace. If you have any questions, please contact Gary J McRay or another member of our Healthcare Group.
Gary has nearly 40 years of experience and has earned a reputation for handling sophisticated transactions for hospitals, managed care organizations, HMOs, health insurers, physician groups and other provider entities and for helping his clients stay on top of complex regulatory issues, such as Anti-Kickback Statute, Stark II, Medicare, Medicaid, and BCBSM reimbursement appeals.View All Posts by Author ›
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Best Lawyers® 2020
Congratulations to the attorneys of the Health Care practice group at Foster Swift Collins & Smith, PC for their inclusion in the Best Lawyers in America 2020 edition. Firm-wide, 42 lawyers were listed. Best Lawyers lists are compiled based on an exhaustive peer-review evaluation and as lawyers are not required or allowed to pay a fee to be listed; inclusion in Best Lawyers is considered a singular honor. Health Care practice group members listed in Best Lawyers are as follows:
- Gilbert M. Frimet, Southfield
- Richard C. Kraus, Lansing
- Gary J. McRay, Lansing
- Jack A. Siebers, Grand Rapids/Holland
- Jennifer B. Van Regenmorter, Holland
To see the full list of Foster Swift attorneys listed in Best Lawyers 2020, click here.