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March 15, 2017

Anthem CEO pens support for parts of the House GOP's ACA replacement plan

Daily Briefing

    Anthem, the nation's second largest health insurer, has praised parts of the House Republicans' plan to repeal and replace the Affordable Care Act (ACA).

    The letter from Anthem CEO Joseph Swedish to the House Energy and Commerce and Ways and Means committees was sent Thursday, before the Congressional Budget Office on Monday projected the House GOP bill, called the American Health Care Act (AHCA), would increase the number of U.S. residents without insurance by 24 million by 2026. An Anthem spokesperson on Wednesday declined to comment on the letter and CBO's projections.

    24M more would be uninsured under House GOP bill, CBO estimates

    Letter details

    In the letter, Swedish wrote that changes included in the bill would benefit both health insurance companies and U.S. residents by helping insurers to remain in the health insurance exchanges established under the ACA and to provide individuals with coverage options. He wrote that "it is increasingly difficult" for health insurers "to remain in the exchange market under its current structure."

    Swedish, whose company is currently fighting a lawsuit filed by the Department of Justice over its proposed merger with Cigna, told insurers that without "significant regulatory and statutory changes," it will begin to "surgically extract" itself from the 14 states where it sells plans on the individual market.

    "The time to act is now," he added.

    Swedish called for lawmakers to swiftly act on the legislation, calling some of its provisions "essential," such as those to:

    • Create tax credits that U.S. residents could use to purchase health plans both on and off of the exchanges; and
    • Repeal the ACA's health insurance tax.

    Further, Swedish wrote that additional changes—beyond those that can be included in the AHCA under  the budget reconciliation process that Republican leaders intend to use to pass the bill—are needed to ensure the exchange market's stability, such as ensuring insurers will receive the ACA's cost-sharing payments in 2018 and 2019. He wrote, "Without these changes, the market will continue to deteriorate in 2018 and therefore I am writing to offer my support for moving this process forward as quickly as possible."

    Swedish wrote that the company still is reviewing how the AHCA would affect both the individual health insurance market and Medicaid. "In particular, we will be seeking to ensure continuation of comprehensive Medicaid benefits, including Medicaid home and community-based services, beyond acute care to all who need them, most notably people with disabilities, older adults, and children and families who depend upon them," he wrote.

    Industry stakeholders, including America's Health Insurance Plans (AHIP) and the Blue Cross Blue Shield Association, have expressed concerns that the AHCA's proposal to phase-out the ACA's Medicaid expansion and to transition Medicaid to a per-capita allotment model would result in many U.S. residents losing coverage. However, AHIP also said the AHCA contains "a number of positive steps" to help stabilize the health insurance market.

    Experts say insurer support is vital for GOP

    Kip Piper, president of the consulting firm Health Results Group and a former CMS adviser, said Anthem's letter could bolster House Speaker Paul Ryan's (R-Wis.) push to quickly advance the legislation. "If you're trying to get support on the House Floor and Senate, the Anthem letter is a big help," Piper said.

    Axios reports that Republicans need insurers' support because if insurance companies do not think the replacement plan will bolster the insurance market, more could choose to pull out of the exchanges, which would ultimately limit U.S. residents' coverage options. According to the Robert Wood Johnson Foundation (RWJF), the result could be that hundreds of thousands of U.S. residents would have no exchange plan options for the 2018 coverage year. RWJF's Katherine Hempstead said, "A lot of these big carriers have a big impact in their market," adding, "There's not a lot of room to play with if there are exits" (Dickson, Modern Healthcare, 3/10; Haefner, Becker's Hospital Review, 3/10; McIntire, Morning Consult, 3/9; Pradhan, Politico, 3/10; Anthem letter, 3/9; Herman, Axios, 3/13; Luhby, CNN Money, 3/10).

    What you need to know about the House GOP's repeal and replace plan

    Our experts have dug into the GOP's new plan to understand how it will affect you, including its potential big changes to the individual insurance market and Medicaid program. 

    Join us for a webconference on March 17 to learn the details and hear how you can prepare for changes to the ACA. Our last webconference on the politics of health reform filled up in record time, so reserve your spot today.

    Register now

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