Pulling the plug on Healthcare in the US – Dissecting the Regular Facts from the Alternative Facts

Pulling the plug on Healthcare in the US – Dissecting the Regular Facts from the Alternative Facts

 

With all cards on the table, is this Pay or Play 2.0?

 

Where do we stand now?

New changes in the last 24 hours were made among them:

1. Repeal the 10 essential health benefits mandate (Conservative Caucus)
2. Add an addition $15B into a flexibility fund (for states to manage Medicaid) (Coverage Caucus – side note here – Senator Cassidy R-LA – who worked with Senator Collins R-ME on a separate bill is heading the coverage caucus as they are working to keep coverage in the Medicaid programs)
3. Keep the .9% Medicare tax for high-income earners making over $200,000 filing single for six more years – this would be to keep bringing in new revenue (This was originally in the bill to sunset as of 2018, then adjusted to sunset this year but looks to be sunsetted in 6 years)

 What else did I miss?

Earlier this week, additional changes were made to the bill as it was attempted to garner enough votes to pass on the floor of the House.  Most of these are changes in implementation dates to appeal to different parts of the House GOP.

1. Moving the repeal of the Tanning & Medical Device tax from 2018 to 2017
2. Moving the repeal of the business tax cap for executives in health insurance companies from 2018 to 2017
3. Sunset new Medicaid expansion for states that have not expanded from 2020 to 2017 (Kansas is currently trying to expand Medicaid as we speak)
4. NY Representatives add an amendment to move $2.3B Medicaid costs from local (county – excluding large metropolises like NYC) to the State Budget
5. Lower the medical expense deduction from 7.5% under the original bill now to a new low of 5.8% and to move up implementation from 2018 to 2017
6. Delay Cadillac tax from 2025 now pushed out to 2026
7. Repeal the maximums and over the counter medication bans on Flexible Spending Accounts from 2018 to 2017
8. Increase the HSA limits to maximum out of pocket costs from 2018 to 2017

What does this all mean?  Well, to be absolutely frank – not much, if they don’t have the votes today.  What does it mean in the future, though, EVERYTHING.  

I don’t think you will find someone who doesn’t think we have work to do on the ACA.  I am the first to say it.  I also think that we have to get a bi-partisan committee to work together with consumer groups; AARP; AHIP; AHA; AMA and the healthcare consulting (i.e. the broker) community.  We are in the battle on a daily basis.  We know what can work and what should work and this needs to be done right and it needs to be done soon.

There are good ideas out there and we have to approach this on a more macro level and look at the outside forces that are affecting the current delivery system, i.e. lowering the cost of pharmaceuticals by introducing competition; providing incentives for smaller companies to do more development on generic alternatives; banning pharmaceutical companies from shelving generic patents when they become available; more efficient medical record data sharing; cutting out redundancy; providing affordable medical malpractice insurance programs to incent OBGYNs and other speciality providers who want to provide care but can’t afford the malpractice premiums; identifying high-cost chronic conditions and look at possibly pooling them into a national program such as Medicare, as we do with End Stage Renal Disease; providing TRANSPARENCY to the consumer by giving them the means to shop for a procedure with outcomes and cost as easily as they can today with houses; technology and cars; getting more funding and education to fight the opioid epidemic.

We cannot continue to kick the can down the road, adjust the programs to suit a small group of interest.  The health of this country is at stake; the health of its citizens are at stake and millions of jobs are at stake.  We need to pull this out of the halls of Congress and get the experts, who manage this, at the table now before it is too late.  

There are solutions, there is a way – but we have to do this together with experts and support it as a country.  This is one thing neither party should own but every party should want to see succeed.  


 

CBO Releases Report Showing 52 Million to be Uninsured under AHCA, 7 Million to Lose Employer-Sponsored Insurance

CBO Releases Report Showing 52 Million to be Uninsured under AHCA, 7 Million to Lose Employer-Sponsored Insurance

From NAHU Washington, DC


The Congressional Budget Office (CBO) released their report on the American Health Care Act (AHCA) on Monday, indicating that 14 million Americans would lose their existing healthcare coverage by next year under the AHCA, growing to 24 million in the next 10 years, to bring the total uninsured population to 52 million. This amounts to a net increase of 4 million uninsured from before the ACA was signed into law, when 48 million were uninsured. The plan would also reduce the federal deficit by $337 billion by 2026, with $880 billion in reduced Medicaid spending and $673 billion cut by eliminating the ACA’s subsidies. In place of those subsidies, the CBO projects that the AHCA tax credits would cost the federal government $361 billion over 10 years. The CBO is the nonpartisan group tasked with determining the cost of legislation to the federal government, both in a loss of revenue and increase in spending.

The biggest cause of the increase in the uninsured rate is due to the elimination of the individual and employer mandate penalties. The report estimates that after the initial fallout of 14 million uninsured in 2018, 2 million additional individuals would opt against enrolling in coverage each year thereafter. The employer-based market would also see a noted change, with the CBO projecting that roughly 2 million fewer people would enroll in employment-based coverage in 2020, which would grow to roughly 7 million in 2026, and that “over time, fewer employers would offer health insurance.” The employer-based market currently enrolls more than 175 million Americans in health insurance coverage and NAHU strongly supports measures to maintain this system.

The CBO basis their assumption of the gradual erosion of employer-sponsored insurance on the loss of the mandate penalties and that the AHCA’s tax credits would be available to a broader group of individuals than those under the ACA. Further, “some employers would choose not to offer coverage and instead increase other forms of compensation in the belief that nongroup insurance was a close substitute for employment-based coverage for their employees.” The drop in coverage is also due partly on the employee’s behalf, as “fewer employees would take up the offer of such coverage in the absence of the individual mandate penalties.” Previous CBO reports similarly expected that the ACA would result in a drop in employer-based coverage, a projection which has not occurred.

CBO projects that federal revenues would be reduced by $883 billion over the next 10 years, largely by eliminating the vast majority of the ACA’s taxes. Of this, $275 billion would come from eliminating the net investment tax, $145 billion from the health insurance tax (HIT), and another $592 billion would come from taxes unrelated to health coverage proposals. The CBO also projects that delaying the Cadillac/excise tax until 2025, as written in the AHCA, would cost the federal government $49 billion in lost revenue.

Republicans tasked themselves with coming up with a reconciliation bill that would reduce the deficit by a minimum of $2 billion over 10 years, meaning that the score by the CBO meets this requirement and allows Congress to continue pursuing this bill. House Speaker Paul Ryan (R-WI) responded to the score saying that he was “encouraged” and that the increase in the uninsured was due to repealing the ACA’s individual mandate penalties. Ryan noted, “We are saying the government is not going to force people to buy something they don’t want to buy. If we end the Obamacare mandate that says you must buy this plan, then guess what? People aren’t going to buy it.”


 

Looking further into the AHCA: What stays; market reforms; premium credits and tax changes

As the Northeast is being hit with Stella, I thought it a good time to outline, in greater detail, the American Health Care Act, which is set to replace the Affordable Care Act (ACA).

 

Let’s start with the things that are not being impacted by the bill:

1. Out of Pocket Maximums – the maximum you pay in copays; deductibles and coinsurance before your coverage bumps to 100% and you pay no more out of pocket (2017 Maximums: $7,150 for single/$14,300 for family) on plans that offer Essential Health Benefits (EHB)
2. Prohibition on lifetime maximums on plans that offer Essential Health Benefits (EHB)
3. Requirements to cover pre-existing conditions
4. Coverage for adult children up to age 26
5. Guaranteed availability and renewability of coverage

Repealing the Employer and Individual Mandates
The ACA currently requires an employer with more than 50 full-time eligible employees to pay or play (the employer mandate) and an individual mandate.  The mandates would still exist under the AHCA; the bill would just reduce the penalties to zero – retroactively back to January 1, 2017.  

The AHCA would impose a new surcharge in the market, effective for open enrollment for 2019 for individuals, called the “Continuous Coverage Incentive.” In an attempt to limit adverse selection, this “incentive” would allow insurance carriers to add a 30 percent late-enrollment surcharge to the premiums of anyone who allowed their coverage to lapse for more than 63 days, in the past 12 months.  So, instead of barring someone who develops an illness during the year, who decided not to enroll during open enrollment, it would allow them into the pool, if they paid 30% more on their premium for that given policy year.  The surcharge would drop at their annual open enrollment.

This change could hurt the risk pool, by allowing individuals to leave the risk pool and only join when they have an illness and cause the cost of care to skyrocket faster than premium receipts, thereby causing premiums to soar the following year.  It could also cause insurance carriers to totally exit the individual market and consumers could end up with no choices in certain counties across the country.

Tax Credits instead of Subsidies
Currently, anyone who shops in the individual state exchange could be eligible for premium tax credits and cost-sharing reductions, based on their income. The AHCA would repeal these subsidies in 2020.

They would be replaced with transferable, monthly tax credits to all individuals who purchase insurance in the individual market and unsubsidized COBRA coverage. 

This new tax credit would be refundable or could be used in advance.  The credits would have an additional qualifier, outside of income, they would also be based on age.

In a nutshell, the credits would work as follows:

Income: if you file taxes as a single, the maximum income is $75,000 and jointly it is $150,000 – after these thresholds, the credits phase out.

Tax Credit Thresholds (per year) and capped at $14,000 per family:

The AHCA would also repeal the ACA’s small business tax credit program that is in place for smaller businesses to incent them to offer coverage, as the Employer Mandate was for large group employers only.

Premium Ratios to adversely affect older Americans
The bill also changes the ratio of premiums for older Americans.  Currently, rates, are either a 1:1 ratio (rates are the same regardless of age) or they have a ratio rating model.  That ratio rating maximum is capped at a 3:1 ratio, so, for example, Plan A costs – $300 for a 22-year-old, then that same plan cannot cost more than $900 for a 63-year-old.  Under the new bill, this ratio would rise to 5:1 so the premium would be $1,500 for that same 63-year-old.

Taxation (this is a long one folks)

Some of the good stuff – 

Cadillac Tax: the ACA had built in an excise tax of 40% on high-cost employer sponsored health coverage effective in 2025 (note, this was already pushed off from an original implementation of 2018 to 2020).  Data showed that 26% of all employers would have been affected by this tax and in 2015, there was a bipartisan support to repeal this.  It was never repealed and is still being kicked down the road, with hardly any support from either side of the isle.

Over the Counter Medications (OTC medications): the ACA limited tax-advantaged products, such as Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) from paying for medications that were not filled with a prescription.  This ban on OTC medications would be repealed as of 2018.

Spending Limits on FSAs: The ACA capped the amount of money an employee could put aside on a tax-free basis at $2,500.  The AHCA would repeal this as of 1/1/2018.

Health Savings Accounts Enhancements: Increase the maximum HSA contribution limit to the maximum out of pocket maximums; allow the account to cover charges that occur 60 days before the account being opened.

Some of the ‘huh why would you do this’ stuff – 

Additional Medicare Tax: The ACA, to increasing funding for Medicare, implemented an additional .9 percent tax in 2013, on individuals who’s wages were more than $200,000 a year.  (this is adjusted based on filing jointly or married).  The AHCA would repeal this tax as of 2018. Let’s just look at this for a moment.  

If I made $250,000 a year, I would be paying an additional $2,250 a year in Medicare tax.  If I were in this situation, I would be happy to pay an additional $187.50 a month to fund Medicare, which is currently insuring my mother.   The IRS website shows that in 2014, approximately 6.4% of filed returns were over $200,000 a year.

Some of the ‘What the heck’ stuff – 

Other tax repeals or changes: in 2018, the AHCA would repeal the tanning bed tax (10%); the medical device tax (2.3%); the tax on certain brand pharmaceutical manufacturers and it would LIFT the limit on the business deduction for insurance company salaries. Currently, that business deduction is capped at $500,000 in salary, and it would be removed.

As you can see, I have only touched on the market reform and taxation portions of the bill.  There is a huge piece of the bill, and that is the ‘Modernizing Medicaid.’  It is essentially rolling back the Medicaid expansion provided through the ACA, and offered in 32 states, and replacing it with block grant funding. There is a good blog that outlines the details of this Keeping an Eye on Affordable Healthcare.  

As you can see, there are a huge amount of moving pieces and many stakeholders demanding their voices be heard.  The most important voice, I feel in this chorus, is you, the consumer.  We need to understand what the ACA offered and balanced that with a thoughtful program that will not throw millions off of their healthcare coverage, make care more affordable and balance that with the costs to deliver care.  And it starts with facts and education. 


Rob Bujan 

Pulling the plug on Healthcare in the US – Dissecting the Regular Facts from the Alternative Facts

Dismantling the employer option . . . and then there were none    There is a well known English nursery rhyme by Mother Goose, about an egg that sat on a wall and had a great fall.  All the king’s horses and the all king’s men could not put that poor egg back together again. As we have been following the repeal and replace of the Affordable Care Act (ACA) or aka – Obamacare, the elimination or capping of the employer tax-exclusion on employer sponsored benefit programs, has been brought up again.  This idea has been floating around for the last couple of years as a way to increase revenue and now looked at as one potential revenue funding option in a replacement to the current Affordable Care Act (ACA). So what is the employer tax – exclusion? Currently employees are NOT taxed on the employer paid portion of their benefits for income and payroll tax purposes. Under this new regulation, the employer paid portion of premiums could end up being considered taxable income.  In addition, the employer could face higher FICA (Federal Insurance Contributions Act) matches, which would be an added financial burden to the employer.   FICA is made up of the employer and employee both contributing equal shares of Social Security Tax (6.2%); Medicare Tax (1.45%) for a total of 12.4% and 2.9% respectively.  Currently there is a cap on Social Security, so once you have paid this tax on $127,200, you no longer pay the 6.2% Social Security tax.  You can find more information on this and additional taxes HERE. We are sitting in a precarious situation if we start to look changing or altering the current employer model, as part of the repeal and replace.  The Kaiser Foundation has data showing 156 million Americans covered through employer based plans through the end of 2015.  As of 2017, approximately 175 million Americans receive healthcare through the employer based model. Remember the risk pools?  The employer based market is heavily involved in helping to balance risk pools by spreading out the costs of the healthy and unhealthy covered employees. If the employer has no incentive to offer these benefits to their employees, or they end up costing both the employee and the employer more money, the employer could easily have their employees go to the individual marketplace to purchase their coverage by offering a salary increase to the employee to offset some of the costs.  This would mean higher income taxes to the employee.  The costs in the individual market are higher; the choices are lower and employees would lose the benefit of having their employer advocate in coverage disputes. If Congress decided, instead, to cap the employer-tax exclusion, this would in turn, cause the employer to look at providing less rich benefit to employees, to stay underneath the maximum premium cap so not to trigger a tax.  This would push employees to higher out of pocket costs and possibly shift the cost of the premium from the employer to the employee at a faster rate then we are seeing today. The employer-sponsored health insurance is a valuable benefit and a keystone to the American worker and a financial foundation for the healthcare system today.  If we attempt to upset this model, while undergoing additional repeal and replacement options, we run the risk of the entire system breaking, just like that egg.  And there is not a king nor a horse strong or powerful enough to be able to pick it up, once the system has fallen off the wall.   ]]>

10 Things to Know About New York State Paid Family Leave

10 Things To Know About New York State Paid Family Leave     Paid Family Leave is coming to New York in 2018. ShelterPoint Life has put together a great 10 point overview:   1 – PFL is available for the following qualifying events: Having a child, adopting or fostering a child, caring for a sick family member, or caring for a family member after a qualifying military leave event.   2 – When returning from PFL, you are entitled to return to your same or comparable position without loss of benefits you would have accrued otherwise.   3 – Even new Dads will be able to use it! PFL’s bonding benefit is for both men and women.  4 – If you’re having (or adopting) a baby in 2017, you can still take some bonding time after PFL goes into effect next year.   5 – Most employees in New York will get it.   6 – If you already have health insurance through your employer, they will maintain your health insurance coverage for the duration of the time you’re away from work.   7 – PFL will benefit employees at organizations of all sizes, not just organizations with more than 50 employees, as FMLA does.    8 – Once in effect, New York will have one of the most comprehensive family leave programs in the nation.   9 – The first year PFL is in effect (2018), you can take up to eight weeks of paid time off with 50% compensation of your salary up to 50% of the state’s average weekly wage.   10 – The benefit increases every year for the first 4 years ]]>

Pulling the plug on Healthcare in the US – Dissecting the Regular Facts from the Alternative Facts

Pulling the plug on Healthcare in the US – Dissecting the Regular Facts from the Alternative Facts  

The 21st Century Cures Act

By Rob Bujan    Oh goody!  Another bill to repeal and replace the ACA!   nope, wrong. This is one of the last bills that President Omaba signed into law before leaving office.  The 21st Century Cures Act is packed with investments for improved healthcare.  There are some great programs to address the heroin and prescription opioid epidemic; improve mental health; improve the timing on drug trails within the FDA and accelerate cancer research discoveries. It also had a program included that allows employers to provide an account to give to employees to shop for their health insurance plans in the marketplace or directly with an insurance carrier in the individual market. For many years, brokers have been using  Health Reimbursement Arrangements (HRA) coupled with a high-deductible plan.  An employer would put a plan with a $4000 deductible for hospital care, for example, have copays for medication and doctor visits. About 20% – 25% of employees in a group setting drive approximately 80% of high-level (inpatient) claim costs, so the employer could fund the deductible for the employee if they had a claim that processed against the deductible, which would normally be less frequent than office visits or pharmacy claims.  The premium would be lower, and the employer would use those savings to fund the deductible.  The HRA money was used only if a claim entered the deductible mode.  The money was not taxable money to the employee if they used it. Some employers also used these accounts to allow employees to purchase individual health plans to give employees a choice and not administer benefits.  These were also known as Premium Reimbursement Accounts (PRA)  The ACA actually did away with this program as they did not want employers to adversely select against folks who could drive up claim costs, and they did not want employees who could get a subsidy in the marketplace to use that subsidy and receive tax free money from their employer.   The new bill allows HRA stand alone account to pay for premiums for employers with less than 50 employees.  With some new mandates, they can curb some of the abuse that they felt could occur under the original model.  If an employer decides to offer this, the employer must offer it to all their employees (no discrimination).  They are NOT allowed to offer a group product next to this reimbursement program (to protect the risk in the group market), and employees must identify they have this reimbursement if they shop in the marketplace and get an advance premium tax credit (APTC).  The APTC would be reduced dollar by dollar so there is no double dipping.  The maximum amounts that employers could provide to employees would be $4,950 for employee-only coverage and $10,000 for employee/spouse; employee/child or full family coverage.   The goal of this was to get more small group employers who might not be participating in offering group coverage, to do so.  It would also increase the individual market and strengthen it by adding more individual to the risk pool, again keeping that pool full.  The reality is though; this might be a fix that is a little too late.  The individual markets in many states have been hit hard with carriers dropping out; rates increasing due to the medical loss ratios (claims paid versus premiums received) running higher than expected; and an overall lack of choice in the individual marketplace.  Most individual plans are in-network only; have local networks with only national coverage in case of a true emergency. Group coverage offered through an employer is still going to give you larger network access; more carrier offerings and in most cases, lower group rates.   While the 21st Century Cures Act looked good on paper, it is not going to be enough to breathe life back into the individual market without incentives for more competition and a leveling off of rates.  The individual market needs both the state and the federal government to come together to work on a better program for those that don’t fall into Medicaid; Medicare or have employer-based coverage.  Why don’t we get a discussion about this going and work on fixing one piece of the market at a time?  That is how we really could provide a safe and thoughtful way to enhance and adjust our current state of the ACA. ]]>

Revised Form I-9 Now Available

The revised Form I-9, Employment Eligibility Verification, is more user-friendly than ever. Here are some of the features:

• Employees and employers completing it on the computer will see helper text for each field.
• Employees and employers completing it on the computer can choose from drop-down lists for acceptable documents, calendars, states and countries.
• Employers can enter information in a new “Additional Information” field, instead of in the margins.
• Employees who use multiple preparers and translators have additional space.

Print the revised form directly from the USCIS website or download it to your computer using the latest free version of Adobe Reader.

Also, employers should continue to follow existing storage and retention rules for their previously completed Form I-9.

Remember: By Jan. 22, 2017, employers must use the revised form. Visit I-9 Central for more information.
E-Verify Records Disposal

In April 2017, USCIS must dispose of E-Verify transaction records over 10 years old, (records dated on or before Dec. 31, 2006).

From now through March 31, 2017, E-Verify employers may download these transaction records from the Historic Records Report.

Historic Records

Republicans Face Dilemma on Timing of Health-Law Replacement

Do they act before or after the 2018 midterm elections? Either choice carries political risks

The Wall Street Journal
By Stephanie Armour and Kristina Peterson
Dec. 9, 2016 7:00 a.m. ET

WASHINGTON—Republicans united in their desire to overturn the Affordable Care Act are divided over whether to replace it before or after the 2018 elections, a choice that holds political peril either way.

Waiting until after the midterms could pose a political risk to the most conservative Republicans who campaigned on the repeal and whose constituents want the law to be gone as quickly as possible.

But passing a hastily-written replacement for the complex law could create chaos in markets and leave millions without health insurance. Some Senate Republicans believe putting a new system in place could take until 2019 or longer.

Along with likely legislative action by Republicans in January to dismantle parts of the ACA, President-elect Donald Trump is expected to take executive action that would weaken parts of the law. House Republicans also are likely to seek to cut off federal funding for Planned Parenthood Federation of America.

Midterm elections tend to disfavor the party that controls the White House, and Republicans are aware of the drubbing Democrats took in 2010, after they enacted the law with almost no Republican support.

“One of the lessons we learned from Obamacare is that partisan legislation is not sustainable and what we need to do is go back to the old-fashioned way” of reaching bipartisan consensus, Senate Majority Whip John Cornyn (R., Texas) said this week.

A transition period would be aimed at preserving health insurance for the roughly nine million consumers who get tax credits to offset premiums. “There needs to be a reasonable transition period,” House Speaker Paul Ryan (R., Wis.) said Thursday. “It’s just premature to suggest that we know exactly how long this transition will last.”

Some House Republicans insist a replacement can be done in two years or less. Their calculus is that getting rid of the law early in 2017 with a short or no transition period would force action on its replacement. “The only way this gets done is if our backs are against the wall,” said Rep. Mark Meadows (R., N.C.), chairman of the conservative Freedom Caucus.

Senate Republicans have indicated they want Democratic buy-in for their health-care overhaul. Finance Committee Chairman Orrin Hatch (R., Utah) said “three years would be better” for a transition, but acknowledged there is pressure from the House to move faster.

If House Republicans who want a speedier replacement defect, the House could lack enough votes to push through a three-year replacement plan. The clash also reflects the difficult path ahead for Mr. Ryan, who wants to keep the GOP united in its repeal and replacement plan.

“This election showed that people want things done now,” said Rep. Roger Williams (R., Texas). “People in America deal in real time and they want real-time solutions.”

Democratic leaders have signaled they are unlikely to cooperate, at least in the initial repeal phase, while some in the party up for re-election in 2018 in conservative-leaning states may feel pressure to fill the void if the law has been repealed.

“They have nothing to put in its place, and believe me, just repealing Obamacare even though they have nothing to put in its place and saying they’ll do it sometime down the road will cause huge calamity from one end of American to the other,” said Sen. Charles Schumer of New York, the next Democratic leader.

Each party will face political headwinds going into the 2018 midterms. Senate Democrats will be defending 25 of 33 seats in play, putting them at a disadvantage.

But Republicans will have political ownership of the health-care law at a time it is likely to still be in flux—and possibly in turmoil. And because they will control Congress and the White House, any voter angst could favor the Democrats in a sort of reverse dynamic of 2010

Senate Republican Leaders Vow to Begin Repeal of Health Law Next Month

THE NEW YORK TIMES
By ROBERT PEAR
DEC. 6, 2016

WASHINGTON — Senate Republican leaders, after meeting with Vice President-elect Mike Pence, said on Tuesday that they would move immediately next month to start repealing the Affordable Care Act, despite qualms among some of their members.

“The Obamacare repeal resolution will be the first item up in the new year,” said Senator Mitch McConnell, Republican of Kentucky and majority leader.

Republicans have not fleshed out a plan to replace the 2010 health care law, President Obama’s signature legislative achievement. But on Tuesday they laid out their principles for a replacement plan and said they would try to minimize disruption for the 20 million people who have gained coverage under the law.

Senate Republican leaders appeared to agree with House Republican leaders on a “repeal and delay” strategy, which could keep parts of the health law in place for several years, as Congress works with the administration of Donald J. Trump to devise a replacement.

The Senate Republican strategy would start the repeal process in early January and could defer the effective date for several years, but not all party members were on board.

“They have to be done together,” said Senator John McCain, Republican of Arizona, referring to efforts to repeal and replace the health law. “We don’t want to have people left out.”

Democrats vowed to fight for preservation of the health law, on which public opinion has been deeply divided for six years.

“Bring it on!” Senator Chuck Schumer of New York, the next Democratic leader, said to Republicans. “Just repealing Obamacare, even though they have nothing to put in its place, and saying they’ll do it sometime down the road will cause huge calamity from one end of America to the other.”

Many health policy experts say the law has been beneficial. But Senator John Thune of South Dakota, the No. 3 Senate Republican, said: “It’s well documented, everybody agrees, both Republicans and Democrats, that Obamacare has serious problems. I would say it’s been a failure, and I think the American people agree.”

After repealing the law, Mr. Thune said, Republicans will proceed step by step to develop a replacement, built around four principles: States, not the federal government, should have the primary responsibility for health policy. Patients and doctors should be “in control.” There should be more competition among health plans, so consumers would have more choices. And small businesses should have more discretion and flexibility to configure health benefits for their employees.

After their lunch on Tuesday with Mr. Pence, many Senate Republicans were energized. After the inauguration of Mr. Trump, the schedule will be “very aggressive,” said Senator Michael Rounds, Republican of South Dakota.

But other Republican senators were still mulling their strategy.

Senator Bob Corker, Republican of Tennessee, suggested that it might make sense to repeal and replace the heath law at the same time, and that there could be pitfalls in deferring a replacement for several years.

“People are trying to figure out the best route,” Mr. Corker said. “It’s not really repeal if it’s still in place for three years.”

Senator John Barrasso of Wyoming, a member of the Senate Republican leadership, said Congress would need time to develop a replacement.

“Health care has been driven into the ditch by President Obama and this health care law,” Mr. Barrasso said. “It will take time to get the cart out of the ditch.”

Senator Susan Collins, Republican of Maine, said she supported efforts to repeal and replace the health law, but not Republican efforts to cut off federal funds for Planned Parenthood clinics. Last December, she voted against a budget bill that would have repealed major provisions of the health law because it would also have terminated funds for Planned Parenthood.

“Under the incoming administration, Republicans and Democrats will have a new opportunity to fix Obamacare, and there is a lot to fix,” Ms. Collins said on Tuesday, noting that premiums for health plans on the exchange in her state were increasing an average of 22 percent next year.

Insurers aren’t drinking GOP health reform Kool-Aid

Nov 16, 2016 | By Dan Cook BenefitsPro

As the nation holds its breath in anticipation of the Republican Party’s reform of health care reform, insurers have already moved into the hyperventilation stage.

The health insurance industry is one that, historically, has evolved by increments.

Yet since the passage of the Patient Protection and Affordable Care Act, it has been asked to change by leaps and bounds. But now, with an incoming president and Congress that have vowed to undo the ACA with no replacement plan to offer, the industry doesn’t know what to brace for next.

Outgoing President Obama neatly summed up the dilemma facing the nation in an interview with the media the other day. “If they can come up with something better that actually works, a year or two after they’ve replaced the ACA with their own plan, and 25 million people have health insurance and it’s cheaper and better and running smoothly, I’ll be the first one to say that’s great,” he said.

While there’s been no shortage of criticism of the ACA’s structure, most insurance authorities say its basic components were, in theory, solid. The ACA offered truly affordable health insurance to those with pre-existing conditions and others who, due to their age and other factors, were previously facing budget-busting insurance premiums—if they could get coverage at all.

The poor were finally able to “buy” basic coverage, and insurers’ profits were somewhat protected by the “buy-or-pay-a-fine” law included to extract money from those who might not want coverage so that the subsidy pool could be filled.

Republicans say they intend to continue to offer affordable coverage to those with pre-existing conditions. (The poor will apparently be on their own again, at least based on current GOP statements.) But they do want to eliminate the “mandate.”

But insurers fear that, without the stick of the mandate, the carrot of pre-existing coverage just won’t work. And they will face the choice of either plummeting profits or escalating premiums—or both.

President-elect Trump and others in his party have floated various “solutions” to creating a mandate-less national health system. But insurers who spoke to The Hill poked large holes in all of them.

In a tweet reported by The Hill, the Kaiser Family Foundation’s Larry Levitt laid out the challenge facing the GOP: “There is a bipartisan desire to guarantee insurance for pre-existing conditions. Sadly, there’s no magic pixie dust that makes it easy.”

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