Mitchell & Mitchell on Health Care and the Trump Agenda, Part 2: What Are the Realistic Options for Repeal & Replacement of the ACA?
This is the second post in an ongoing series regarding changes in health care that may take place—and actual changes that do take place—with the new Trump administration. The likely implementation issues to be encountered for both potential and actual changes are described, based on detailed methods of analysis. The emphasis is on what these shifts mean for legal practices and how attorneys may prepare in the most effective ways.
The political commitments by the new administration of President Trump and the Republican members of Congress to repeal and replace the Affordable Care Act (ACA), also known as Obamacare, are running up against the constraints of reality. The ACA was passed into law as a complex master plan that sought to achieve change across the health care system.
The ACA was presented in two basic parts: part one involved Medicaid expansion for adults, while part two involved subsidized health insurance purchased through new Health Benefit Exchanges.
As it turned out, part one was basically “more-of-the-same” added to the existing Medicaid framework, but the redesign became partially derailed by a Supreme Court decision that concluded states could choose to opt-in or reject the expansion. Based on political and financial situations, many states chose not to go ahead. Part two turned out to be so complex that outcomes seemed to take on a life of their own. Widespread reactions over the individual mandate to obtain coverage, the rapid expansion of out-of-pocket costs (for policies, through both premiums and deductibles), and use of very restrictive provider networks resulted in an unstable outcome.
Over 2010-2016, this approach to change demonstrated numerous fallacies, including the failure to adequately anticipate how the public and organizations involved would perceive and react to the plan.
In this setting, political commitments have been made to repeal and replace the ACA. But this is easier said than done. The ACA “master plan” approach to health care change has shown itself to be so complex and unwieldy that efforts to come up with an alternative master plan promise to produce a whole new set of unexpected and unwanted outcomes, with a new round of public and organizational reactions to be considered. And the designers of potential replacement plans will want to undertake detailed analysis of the likely reactions to complex changes, in order to develop a realistic understanding of what is likely to happen.
The ACA lessons of the past six years (as described in the first post of this series) illustrate that another master-plan approach is likely to have its own full range of unwanted reactions that reshape program outcomes.
What are the other real options for change at this time? The advocates of repeal and replace can limit their changes to fine-tuning, but this is probably not politically acceptable. The ACA might be repealed with a few new ideas passed into law (that may provide an incomplete alternative): the possible offering of health insurance across state lines, expanded use of Health Savings Accounts, and use of high-risk pools for those with pre-existing conditions are all being considered in this category, but do not provide a complete plan and have the potential for creating their own host of problems.
It’s possible that legislators could conclude that it may be best to move toward simplified strategies that are less ambitious in terms of government control over the health care system. Attorneys may then advise individuals and organizational clients as to how they can best adapt to the simplified situation, based on lessons learned from the past. Health law practices may then be able to move on their own to develop the most effective strategies available for specific client situations.
Another approach is to give up on detailed redesign of the health care system entirely, and to directly address the basic problem at hand: how to assure that health insurance is available to the public, and that people can afford to buy reasonable insurance. Drawing on the past lessons learned, legislators may conclude that it might be best to apply a tax credit or voucher approach: take all the tax dollars allocated to the ACA, distribute them to individuals through credits or vouchers for specific amounts (dependent on income), and allow insurance companies to offer products that address the resultant market. The whole insurance sector could become a large Exchange. Companies might be directed not to consider pre-existing conditions so long as policies are maintained in effect, in order to motivate the purchase of insurance and to protect individuals who have insurance. Some type of high-risk pool would likely be required for those refusing to spend their credits or vouchers on insurance.
This post was written by Ferd H. Mitchell and Cheryl C. Mitchell, Thomson Reuters authors and attorney partners at Mitchell Law Office in Spokane, Wash. They are active in elder law and health law practice areas and have been working together on programs and activities on behalf of the elderly and in health care for more than 25 years. During their studies, they have visited and evaluated the health care systems of Japan and several countries in Europe to learn how the needs of the elderly are assessed and met in other countries, and they have been better able to understand the U.S. health care system and related care issues from these visits. More about the lessons learned from the ACA and issues involved in health program changes may be found in the 2017 edition of the authors’ book, Legal Practice Implications of Changes in the Affordable Care Act, Medicare and Medicaid, published by Thomson Reuters. More about these methods of analysis may be found in Mitchell & Mitchell, Adaptive Administration, published by Taylor and Francis. Part one of the series can be read here.
The views and opinions expressed in this post are those of its authors alone.