The Sacramento Bee: States – like Congress – are divided on replacing Obamacare

January 23, 2017
BY LESLEY CLARK, SAMMY CAIOLA, BRYAN LOWRY AND DANIEL CHANG

McClatchy Washington Bureau

WASHINGTON 

Senate Republicans say they’ll insure more Americans than President Barack Obama’s 2010 Affordable Care Act and do it more cheaply – by giving power to the states.

But just like the political divide that cleaves Congress, the states seem likely to look at the latest health care proposal with a partisan eye. In Republican-led Kansas, one lawmaker was quick to embrace the idea. But in blue-state California there was caution, as Senate Republicans unveiled a new replacement plan that its sponsors hope will draw support from across the aisle. It would allow states to make the choices on health care.

“I personally think that’s the way we should go,” said Kansas state Rep. Dan Hawkins, a Republican from Wichita, who chairs the the state House Health and Human Services Committee. “I think each state is different and for us to try and do one-size-fits-all across is part of the problem. Quite frankly, I think we could have handled it much better.”

But in California, where health advocates after President Donald Trump’s election continued to aggressively push enrollment in Medi-Cal and Covered California, and state officials have vowed not to let years of enrollment efforts go to waste, there were questions about the details. Legislative language was only released late Monday.

“For me, the absolute most important aspect of anything proposed at the federal level is the federal dollar and what’s going to be coming – is it less, or the same, or more?” said California state Sen. Ed Hernandez, D-Azusa, chairman of the California Senate Health Committee. “If they truly want to allow states to continue on within the (Affordable Care Act), then give us the same amount of money we’ve been receiving, and don’t block grant us, and we can make it work.”

California Insurance Commissioner Dave Jones called it an illusion.

“The Republicans offer the illusion of access, while denying actual health insurance coverage provided by the Affordable Care Act,” he said. “It creates the illusion that somehow those states that have enacted the Affordable Care Act will have the opportunity to continue to do so, but they’ll be denied the funds to do so. And for states that are offered an alternative approach, the illusion is the offer of access to health savings accounts that most Americans don’t make enough to save into in any meaningful way.”

Sens. Bill Cassidy, R-La. and Susan Collins, R-Maine, unveiled their Patient Freedom Act of 2017, suggesting it could attract bipartisan support. But Democrats, who have vowed not to cooperate with efforts to dismantle former President Barack Obama’s signature health care law unless there is a viable alternative, said the plan falls well short of a full replacement plan.

“It is nearly impossible to keep the benefits of the Affordable Care Act without keeping the whole thing,” said Sen. Charles Schumer, D-N.Y., the Senate minority leader. “Ultimately, this proposal is an empty facade that would create chaos – not care – for millions of Americans.”

Collins, one of several senators who have urged their colleagues to come up with a plan to replace the 2010 law as they prepare to dismantle it, said she’s been talking to colleagues on both sides of the aisle in hopes of picking up support.

“We have had expressions of interest,” she said, declining to name any lawmakers for fear of putting them “too far out front.”

She noted that Sen. Dick Durbin, D-Ill., on the Senate floor had called the plan “much more reasonable” than other Republican proposals. But Durbin went on to say that the Senate could only have a “constructive conversation” if Republicans refuse to vote to repeal the law unless there is a replacement.

The Cassidy/Collins proposal, a Durbin spokesman said, is still “a very far cry from covering all the people the Affordable Care Act does in all the same ways.”

Sam Halabi, a professor for the University of Missouri law school, said the Patient Freedom Act may be politically popular but that it lacks the necessary details to determine whether it will succeed at making health care more affordable.

“It is a shrewd first move that looks like it’s keeping some important benefits of Obamacare while fulfilling this promise that Trump and the Republican party made to the American public to at least repeal the parts the public didn’t like,” Halabi said.

Halabi said the Patient Freedom Act never addresses the economic feasibility of repealing the individual mandate while preserving the prohibition on denying coverage due to a pre-existing condition.

Senate Republicans are looking to deliver on a campaign promise and repeal the law using a budget resolution that requires just a majority of senators. But replacing major parts of the legislation would require 60 Senate votes – and a number of Democrats.

Collins said the plan is “not perfect” and will require revisions, but she urged her fellow Republicans to ensure that they have plans to replace the health care law before they vote to repeal it.

“If we do not start putting specific legislation on the table that can be debated, refined, amended and enacted, then we will fail the American people,” she said.

The plan would keep some of the more popular elements of the 2010 law: It would keep coverage for mental health and substance abuse, allow young adults to stay on their parents’ plans until age 26 and prevent patients from losing their coverage because they have pre-existing conditions.

But it would strip away the individual mandate that requires everyone to have insurance or pay a fine. Democrats say the plan would be unworkable without the mandate, which spreads risk by covering healthy people as well as those with illnesses.

Under the Collins/Cassidy plan, states would decide coverage for their residents. States could chose one of three options, including keeping the Affordable Care Mandate and its requirements. The state would continue to receive federal premium tax credits, cost-sharing subsidies, and Medicaid dollars.

A second option, which Collins said she would expect most states to embrace, would allow states to continue to receive funding equal to 95 percent of federal premium tax credits and cost-sharing subsidies, as well as a federal match for Medicaid expansion. States could choose to receive funds in various forms, including per beneficiary grants or refundable tax credits, but the money would be deposited in patient-directed health savings accounts.

A third option would allow the states to opt out entirely from the federal program and develop their own health care programs, without federal assistance.

The Congressional Budget Office, which has warned that repealing the health care law could lead to 18 million Americans losing insurance, has not reviewed the legislation, but Cassidy said he believes the plan would “bend the cost curve down” by seeing that states are managing costs, along with the federal government.

The bill does not repeal the taxes that pay for Obamacare, including one on medical devices.

“The revenue is essential,” Cassidy said. “If we repeal all the revenue now, that’s obviously going to create a hole.” He said the taxes could be repealed at a later date, possibly as part of larger tax reform bill.

“President Trump has said he wishes to cover all, take care of those with pre-existing conditions without mandates,” Cassidy said. “For that, you need revenue, bottom line.”

Sam Halabi, a professor for the University of Missouri law school, said the Patient Freedom Act may be politically popular but that it lacks the necessary details to determine whether it will succeed at making health care more affordable.

“It is a shrewd first move that looks like it’s keeping some important benefits of Obamacare while fulfilling this promise that Trump and the Republican party made to the American public to at least repeal the parts the public didn’t like,” Halabi said.

Halabi said the Patient Freedom Act never addresses the economic feasibility of repealing the individual mandate while preserving the prohibition on denying coverage due to a pre-existing condition.

But he’s also not sure about the expanded use of health savings accounts or HSAs.

“The real questions about the proposal are going to revolve around the structure of the health savings account alternatives, and how those are going to work for states,” he said.

Another unknown in the Collins and Cassidy proposal is how states would respond to having greater flexibility to create their own health care systems.

Halabi imagined a future where some states would choose to keep the Affordable Care Act while others developed an alternative model.

“It isn’t clear that states would compete on the things you would want them to compete on,” Halabi said. “So it could end up being that states would ultimately construct their health care systems to as to attract the fewest number of sick or non-wealthy patients.

“It’s just a big question,” he added, “as to what putting states in charge of the system, or block grants to states, is really going to look like and what conditions if any the federal government might impose.”

Caiola of the Sacramento Bee reported from Sacramento, California. Chang of the Miami Herald reported from Miami. Lowry of the Wichita Eagle reported from Topeka, Kansas.

Lesley Clark: 202-383-6054@lesleyclark

Sammy Caiola: 916-321-1636@SammyCaiola

Bryan Lowry: 785-296-3006, @BryanLowry3

Daniel Chang: 305-376-2012@dchangmiami


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