Perspective: Election 2016


FinerfrockBy Bill Finerfrock and Nathan Baugh

You may know where Donald Trump stands on building a wall, or where Hillary Clinton stands on mandating equal pay for women, but what about their healthcare proposals? While perhaps not the dominant issue it once was during the Affordable Care Act (ACA) debate, federal healthcare policy may be significantly altered again as a result of this election. While it is not our role to promote Trump over Clinton or vice versa, we do feel that AHRA members should understand what to expect given the potential outcomes of the election.

Of course, any true election analysis is complicated by the numerous potential combinations of who controls the White House, Senate, and House of Representatives. While the presidential candidate’s platforms are important to examine, the make-up of the Senate and the House will play a large part in determining what policy proposals actually make it across the finish line.

 

No Matter What

MACRA Implementation

There are certain policies that, regardless of what happens in November, are widely expected to continue. Most notably, the Medicare payment reforms initiated by last year’s passage of MACRA (Medicare Access and CHIP Reauthorization Act) enjoy bipartisan support. However, the implementation of these reforms will continue to be a hot topic in the healthcare industry for the foreseeable future. The legislation gives the administration significant authority to develop the granular details for how the law will function. A new administration would be able to tweak those provisions—ie, reducing the reporting period from a year to 90 consecutive days. Barring an act of Congress, MACRA is here to stay.

Cadillac Tax Delay or Repeal

One aspect of the ACA that we expect to be revisited is the 40% excise tax on expensive employer health benefit plans colloquially referred to as the Cadillac Tax. The tax has already been delayed for two years by Congress and both business and labor interests have joined forces to support eliminating the tax altogether. The tax was designed to discourage individuals from picking the most expensive (and most generous) health insurance. Such “Cadillac” plans often had low deductibles and co-pays which economists argued led to overutilization of healthcare and higher healthcare costs. While the Cadillac Tax is certainly unpopular, Congress may find it difficult to replace the $87 billion of revenue the tax is projected to generate over ten years.1

Site-Neutral Payment Policies

Another issue that will likely be revisited by Congress is the so-called “site-neutral” payment policies. You may recall that in 2015 Congress passed a budget deal which stated that newly established off-site hospital outpatient departments (HOPDs) would no longer get paid via the hospital outpatient prospective payment system (HOPPS), but rather under the physician fee schedule. Earlier this year, the House Energy and Commerce Committee sought feedback from the healthcare community on further site-neutral provisions which is indicative of Congressional appetite to revisit these payment policies. AHRA remains opposed to further cuts to imaging payments and is working with other organizations to ensure that the Medicare payment for the technical component of imaging is economically viable.

 

Democratic Landslide

Lowering the Medicare Enrollment Age to 55

Hillary Clinton represents, in many ways, the continuation of Obama’s healthcare policies. She is proposing to retain the core components of the ACA such as the individual mandate and the laws against denial due to pre-existing conditions. One of her more significant proposals is to allow Americans 55 or older to enroll in Medicare. The concept is that the younger, healthier enrollees could opt-in to Medicare which would bring in additional premium dollars to the program, while simultaneously costing Medicare less than the older beneficiaries enrolled. This could also help stabilize the State and Federal Health Insurance Exchanges by removing a significant portion of the most expensive population from the risk pools.

Public Option

An item that most Democrats pushed for in the initial debate around the ACA, the public option would involve the creation of government insurance to compete against commercial insurance plans in the individual market and potentially the group market. Republicans see this as a stepping stone towards a single-payer system and are very much opposed to the concept. This would require a very large democratic landslide to be feasible.

 

Republican Landslide

Repeal of Affordable Care Act

This would be very likely if Republicans sweep the White House, Senate, and House of Representatives. Even if Republicans did not have the votes to replace the ACA, they could use a procedure known as “reconciliation” to effectively halt the ACA in its tracks. Most notably, Republicans could use this process to eliminate the individual mandate and would no longer penalize employers if they don’t offer health insurance to their employees. They would also be able to eliminate the federal funds for states that expanded Medicaid, which may force states that chose to expand Medicaid to go back to their old eligibility requirements.

Selling Insurance across State Lines

Republicans may push to change the law that currently prohibits the sale of health insurance across state lines. Such a change would allow small businesses, associations, or groups more purchasing power when negotiating with insurance companies on behalf of their employees. Proponents argue that this would also allow for more competition among insurance companies.

Block Grants to States for Medicaid

Block-granting Medicaid involves devolving power to the states regarding Medicaid coverage decisions. Republicans argue that a block grant system would be more efficient and provide states the opportunity to innovate their Medicaid programs. The federal government would provide a lump sum payment to each state based on their Medicaid enrollees, and it would be up to the states to design the rest. The block grant payments, while indexed for inflation and population growth, would reduce federal spending on Medicaid. Democrats argue that states would be forced to reduce benefits and would not be able to make up in innovation what they lose in federal dollars. It would likely require strong Republican majorities to pass.

 

Divided Government

Perhaps one of the most likely outcomes, a divided government would halt many of the above policy proposals and largely retain the status quo. However, one significant piece of legislation that could emerge from a divided government is the 21st Century Cures Act, which dramatically reforms and streamlines the FDA drug approval process while simultaneously increasing funding for research at the National Institutes for Health. Happy election year!


Reference

Congress of the United States Congressional Budget Office. “Budgetary and Economic Effects of Repealing the Affordable Care Act.” June 2015. Available at: http://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/50252-Effects_of_ACA_Repeal.pdf. Accessed August 8, 2016.


This article was originally published in the September/October 2016 issue of Radiology Management.

Bill Finerfrock is the president and owner of Capitol Associates, a government relations/consulting firm based in Washington, DC, who has partnered with AHRA on their regulatory affairs issues. Nathan Baugh is an associate with CAI. They can be contacted at bf@capitolassociates.com and baughn@capitolassociates.com

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