Manatt on Health Reform: Weekly Highlights

CBO finds that the number of uninsured would nearly double under the American Health Care Act; CMS's new Administrator is confirmed; and New Mexico and Massachusetts move to protect reproductive healthcare under ACA repeal.


Verma Confirmed as CMS Administrator

The Senate confirmed President Trump's nominee for CMS Administrator, Seema Verma, by a 55 to 43 vote. Verma was most recently a healthcare consultant who helped develop alternative Medicaid expansion waivers in Indiana and Kentucky.

House Repeal Bill Clears Committee Markup, Moves to Budget Committee

The American Health Care Act (AHCA) advanced through the House Ways and Means and Energy and Commerce Committees on Thursday following 16 hours and 27 hours of debate, respectively. Energy and Commerce adopted one minor technical amendment; all other amendments were defeated in both committees. The bill now advances to the House Committee on the Budget for a vote in the coming days. House leadership has signaled it expects to hold a floor vote by the end of March.

CBO Scores the American Health Care Act

The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) project that the American Health Care Act would increase the number of uninsured relative to the ACA by 14 million in 2018 and by 24 million by 2026, while reducing the federal deficit by approximately $337 billion on net between 2017 and 2026. The savings would primarily come from $880 billion in reduced federal Medicaid spending (a 25% reduction) and net savings of $312 billion on federal Marketplace subsidies. CBO also estimates that individual market premiums would be 15% to 20% higher relative to the ACA until 2020, then 10% lower, on average, than premiums under the ACA between 2020 and 2026. However, premiums would be higher for older enrollees and those in high cost areas. CBO notes that coverage under the House bill would have higher deductibles and cost-sharing and lower actuarial values relative to the ACA.

National Stakeholders and Governors React to House Repeal Bill

Lawmakers, governors and other national stakeholders are weighing in on the House repeal and replace bill, with many expressing concerns, and others noting support. Those expressing concern include the American Medical Association and AARP, several hospital groups, most Democratic governors and members of Congress, and some Republican members of Congress. President Trump and HHS Secretary Tom Price have been generally supportive of the bill's framework, while statements from independent and Republican governors were mixed:

  • Alaska. Governor Bill Walker (I) believes the bill will shift Medicaid costs to the State, which he said the State "is not in a position" to absorb.
  • Arkansas. Governor Asa Hutchinson (R) said in a CNN interview on Tuesday that he does not support the bill "as it stands," adding that "it cannot be the end product" if the bill passes out of the House, as reported by Politico.
  • Maine. Governor Paul LePage (R) criticized the bill for preserving some of the ACA's provisions, including maintaining Medicaid expansion until 2020.
  • Maryland. Governor Larry Hogan (R) argued that the bill must be changed to preserve access to health insurance.
  • Michigan. Governor Rick Snyder (R) is concerned that the plan will drive up Medicaid costs and said that the bill does not reflect governors' input.
  • Mississippi. Governor Phil Bryant (R) stated that he was disappointed with the bill's similarities with the ACA and that he will be working with the State's congressional delegation "to end Obamacare once and for all."
  • Nevada. Governor Brian Sandoval (R) said repeal and replacement of the ACA "should be a governor-led effort" but instead the Republican repeal proposal "doesn't include anything that the governors have talked about."
  • Ohio. Governor John Kasich (R) restated his opposition to the ACA, but reiterated that "phasing out Medicaid coverage without a viable alternative is counterproductive," and puts Medicaid enrollees at risk.
  • Vermont. Governor Phil Scott (R) voiced concerns with the bill stating that it "appears [the bill] would have a detrimental effect on Vermont…We take this seriously."

Studies Examine Impact of the American Health Care Act

New studies released this week highlight the potential impact of the American Health Care Act (AHCA), including effects on coverage levels, affordability, and state costs.

  • A Kaiser Family Foundation issue brief and interactive county-level map estimate that average tax credits under the AHCA would be 36% lower than the ACA in 2020, 41% lower in 2022, and 44% lower in 2027. The Foundation also released a comparison tool that enables side-by-side comparisons of the ACA and Republican repeal and replace proposals, including the AHCA, across a number of factors, such as premium and cost-sharing subsidies, benefit design, individual health market rules, and financing.
  • A Commonwealth Fund fact sheet on high-risk pools, a feature of the AHCA, estimates that covering the approximately 15.4 million Americans with pre-existing conditions in 2014 through high-risk pools would cost the federal government an additional $178 billion per year. Funding for high-risk pools would fall short under House proposals, the authors argue.
  • The Center on Budget and Policy Priorities estimates that tax credits for consumers in 11 high-cost states would be approximately 50% lower under than AHCA compared to the ACA, given that tax credits under the AHCA do not account for geographic variation in the cost of insurance premiums.

Massachusetts: Governor Commits to State-Only Funding for Planned Parenthood

Governor Charlie Baker (R) pledged the State would fund the entirety of the Planned Parenthood League of Massachusetts's $2 million budget for Medicaid services should Congress elect to block federal funding to the organization, according to The New York Times. If passed, the American Health Care Act would prohibit states from using Medicaid funds for services provided by Planned Parenthood clinics.

Montana: Report Details Implications of Medicaid Expansion Repeal

Repealing Medicaid expansion could lead to the loss of coverage for more than 71,000 Montanans, the loss of $284 million in federal funding, and increases in hospital uncompensated care, which declined by 25% with expansion, according to a report prepared by Manatt Health and funded by the Montana Healthcare Foundation. Repeal would also put at risk gains in treatment of substance use disorders and mental health, access to care and specialty services for American Indians, and former inmates' access to coverage and care.

New Mexico: House Approves Legislation to Preserve ACA Birth Control Mandate

The State House of Representatives passed legislation to continue the no-cost access to contraceptives covered in the ACA, and added new access enhancements including one-year refills on birth control pills, over-the-counter birth control, and male contraception at no cost to patients. The bill applies to coverage under a range of individual and group health insurance as well as Medicaid, but not Medicare.

New York: One Million Could Lose Coverage Under Proposed Healthcare Bill

A Department of Health (DOH) analysis found that the American Health Care Act (AHCA) will cause one million New Yorkers to "face significant loss of coverage," in part due to the elimination of the State's Basic Health Plan. DOH projected that the AHCA would shift $4.5 billion in total spending to New York State, counties, and safety net hospitals over the next four years. Additionally, DOH estimated that New Yorkers participating in New York's State-based Marketplace would lose $400 million in premium subsidies.


Colorado: State May Owe Federal Government Up to $43 Million Due to Medicaid Systems Error

Colorado may owe the federal government between $22 million and $43 million after a computer system "erroneously categorized" services provided to some Medicaid enrollees as eligible for the enhanced federal match under Medicaid expansion, instead of the State's standard federal match. The system error dates back to July 2015 and is now being resolved.

Rhode Island: State Appoints New Medicaid Director

Patrick Tigue, former director at the Neighborhood Health Plan of Rhode Island was recently appointed Medicaid Director. Former Medicaid Director Anya Rader Wallack noted that Tigue "has proven himself to be a very effective manager for one of the largest insurers of low- and moderate- income Rhode Islanders."

Texas: Elective Delivery Rates fell by 14% After Change in Payment Policies, Study Finds

The State's Medicaid program eliminated payments to providers for early elective deliveries beginning in 2011, and since the change, the State has seen gains of nearly five days in gestational age and six ounces in birth weight, according to a report in Health Affairs. The analysis also suggests that the positive effects of curbing early elective deliveries are more significant for minority populations. Georgia, Michigan, New Mexico, New York and South Carolina passed similar measures in 2013.



pursuant to New York DR 2-101(f)

© 2022 Manatt, Phelps & Phillips, LLP.

All rights reserved