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March 24, 2017

House cancels vote on ACA repeal

Daily Briefing

    Read Advisory Board's early take on the latest developments.

    At about 4 p.m. ET, House Speaker Paul Ryan announced that the House would not vote Friday on a GOP bill to repeal and replace major components of the Affordable Care Act (ACA) due to a lack of support.

    And after speaking with President Trump Friday afternoon, the Washington Post's Robert Costa reports that the bill will not come to a vote in the near future.

    According to the Times, as of 12:30 p.m. ET Friday, 32 House Republicans had said they would vote "no" on the measure, which would be 10 more "no" votes than the GOP would have been able to withstand to pass the AHCA. The Times said another nine GOP members said they had concerns or were leaning no, while another 50 were "undecided or unclear."

    Those who said they were opposed to the AHCA included a combination of GOP conservatives and moderates, the Times reports.

    An ultimatum

    CNN reports that Office of Management and Budget Director Mick Mulvaney on Thursday evening delivered an ultimatum in a meeting with House Republicans: Either pass the bill on Friday, or Trump will move on from health care and the GOP will be "stuck with Obamacare."

    The ultimatum came after House GOP leaders on Thursday canceled a planned vote on their bill—called the American Health Care Act (AHCA)—to replace the ACA, after a "marathon day of negotiating" failed to garner sufficient support for the measure, the Times reports.

    Some conservative GOP lawmakers objected to the AHCA over concerns the bill would be too costly and wouldn't roll back enough of the ACA, while some moderate GOP lawmakers objected to the bill over concerns it would reduce constituents' health benefits, the Times reports.

    House leaders would have needed 215 favorable votes to pass the AHCA in the House. With one Democrat expected to be absent on Friday, and no Democrats expected to support the measure, GOP leaders could afford only 22 "no" votes from Republicans.

    Advisory Board's take

    Eric Cragun, Senior Director, Health Policy

    Amid the latest developments, all eyes are one a few key questions now: Will Republican lawmakers continue to work to change the ACA? What regulatory changes to the individual insurance market and Medicaid might HHS make? And what other health policy issues (e.g., drug pricing) will rise to the forefront?

    Despite uncertainty, providers have no-regrets steps

    Providers must watch for the answers to those questions without losing focus on no-regrets strategies that deliver value under any market conditions. Fundamentals including smart physician alignment, cost efficiency, and consumer-focused care are indispensable.

    Learn more about these no-regrets strategies along with the latest policy developments:

    The Daily Briefing's earlier coverage of the AHCA debate continues below

    Revised bill would reportedly roll back federal insurance requirements

    On Thursday, the White House and House GOP leaders reportedly agreed to change the bill so that it would scrap the ACA's so-called "Essential Health Benefits" provision beginning in 2018 in response to pressure from the conservative House Freedom Caucus. The provision mandates that insurers cover 10 broad categories of services for plans sold in the individual and small group markets.

    Those categories include hospitalization; ambulatory care; and services for  emergencies; preventive care and wellness; mental health and substance use disorders; pregnancy, maternity, and newborn care; and rehabilitation. According to HHS, "Specific services covered in each broad benefit category can vary based on your state’s requirements."

    Several news outlets have reported that under the new version of the AHCA,  states would set benefit requirements. Some insurers have expressed concern that the 2018 timeline would not give them sufficient time to design plans and set prices.

    Lawmakers from both parties also have expressed doubts that the Senate would be able to repeal the ACA provision under the budget reconciliation process it plans to use to pass AHCA. Reconciliation rules allow a bill to circumvent a potential filibuster only if it is limited to provisions that affect spending and revenue. Politico reports that Senate Republicans could see if the chamber's parliamentarian prohibits them from repealing the ACA provision or could try to pass a separate health plan entirely. 

    According to the Times, opponents of the ACA's essential health benefits provision say it increases insurance premiums. Proponents counter that repealing the measure would allow insurers to offer bare-bones policies, and note that it wasn't uncommon for plans before the ACA went into effect to not cover maternity coverage, mental health care, and prescription drugs.

    Removing the provision also could weaken protections for individuals with pre-existing conditions, since insurers could decide to not offer services that are often utilized by individuals with chronic conditions who are more costly to insure, the Times' "The Upshot" reports.

    Dylan Scott writes for STAT News that repealing the ACA provision might result in healthy individuals purchasing less comprehensive plans and sick individuals purchasing more generous plans. "That could send the market into a 'death spiral,'" Scott writes, in which "insurers raise the price of the more generous coverage sick people are buying, because they are more expensive to cover. That could eventually drive coverage out of reach for many of them."

    Despite the reported concession, several Freedom Caucus members Thursday afternoon said the change was not sufficient to win their votes, and that they wanted the bill to also repeal other ACA requirements, including that insurers not deny coverage based on pre-existing conditions, Politico reports.

    Confusion over essential health benefit repeal language

    However, University of Michigan Law School professor Nicholas Bagley and Washington and Lee University School of Law professor Timothy Jost both contend that the bill changes as written would not necessarily fully repeal the ACA's essential health benefits provision.

    Jost and Bagley both write that the amendment as written would continue to require HHS to define essential health benefits for certain purposes, such as for capping out-of-pocket spending.

    Bagley writes for the Incidental Economist that the amendment "just tacks on a provision saying that, for 2018 and beyond, 'each state shall define the essential health benefits with respect to health plans offered in such state, for purposes of" the section of IRS code that addresses the eligibility for tax credits.

    Bagley contends that the amendment is ambiguous as to whether "state-defined essential health benefits [would] also have to cover the 10 categories of benefits" and "be the same as those in a 'typical employer plan,'" as required under the ACA.

    And he writes that, "In a weird echo of the argument in King v. Burwell—if a state hasn't defined the essential health benefits, it seems that no one in the state is eligible for tax credits."

    Additional changes to the bill

    Meanwhile, the White House and House GOP leaders also have agreed to other changes to AHCA, including to:

    • Provide an additional $15 billion in 2020 in funding that states could use to increase substance misuse, mental health, and maternity care;
    • Use AHCA's $100 billion state innovation fund for additional purposes, including behavioral health and maternity and newborn care; and
    • Delay repealing the ACA's 0.9 percent Medicare tax on higher-income individuals from 2017 to 2022.

    The updates would be in addition to the changes outlined Monday by House leaders in a so-called manager's amendment, including provisions to allow states beginning in fiscal year 2020 to choose whether to receive Medicaid funding via block grants or per capita allotments and to encourage states to adopt Medicaid work requirements.

    CBO on Thursday issued a new score of the AHCA that factored in the manager's amendment, finding that the bill would reduce the deficit by billions more than previously predicted but that it would still lead to 24 million more people being uninsured by 2026.

    However, CBO is not expected to release a new score that would account for the latest changes before Friday's planned House vote, Bloomberg reports.

    Bill would face uncertain future in Senate

    If the AHCA were to pass the House, Politico reports that its fate would be uncertain in the Senate, where "top Republicans are making no promise that the last-ditch changes to win over conservatives [would] fly in the more centrist" body.

    Republicans hold 52 seats in the Senate, and Vice President Pence could vote to break any ties.

    In addition, the Senate parliamentarian may decide that certain provisions, such as stripping the ACA's essential health benefits, cannot be included as the chamber attempts to pass the measure via reconciliation.

    Senate Finance Committee Chair Orrin Hatch (R-Utah) said, "There's only so much they can get through over there. And we'll have to see what we can do."

    (New York Times, 3/24; House et al., Bloomberg, 3/24; Kapur et al., Bloomberg, 3;23; Hirschfeld Davis et al., New York Times, 3/23; Bade et al., Politico, 3/23; Everett/Haberkorn, Politico, 3/23; Scott, STAT News, 3/22; Sanger-Katz, "The Upshot," New York Times, 3/23; Lee et al., CNN, 3/24; Jost, Health Affairs Blog, 3/24; Diamond, "Pulse," Politico, 3/24; Cancryn tweet, 3/23; CMS website, accessed 3/24; website, accessed 3/24; Bagley, The Incidental Economist, 3/24; Lee tweet, 3/24; Swan, Axios, 3/24; Dawsey tweet, 3/24; Corn tweet, 3/24).

    Navigating the first 100 days of the Trump administration


    Since Donald Trump won the presidential election in November, health care reform has since quickly risen to the top of the GOP's policy agenda—and heath care executives are grappling with a new sense of uncertainty.

    While many unknowns will remain across the next few months and potentially even years, the first 100 days of the Trump administration will provide significant insight into the direction of reform efforts. Read our briefing to learn what five key issues you should watch.

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