Snapshot: State Leaders Talk AHCA

twitterOn March 7, NASHP issued a chart summarizing how the American Health Care Act, passed out of House committees the day before, differed from the Affordable Care Act (ACA). In addition, NASHP held a summit with state leaders to discuss those changes and how they might affect states. These leaders represented the diversity of states and the breadth of agencies and officials engaged in state health policy. Several questions and concerns emerged after a preliminary review of the bill:

1. What will be the financial impact of the bill on state budgets and on consumers? Concerns included both the Medicaid per capita cap proposal and the move away from advanced premium tax credits (APTC) and cost savings reductions to be replaced by less generous tax credits.

2. Assumptions that the bill would provide insurance market reforms to make coverage less costly need to be carefully analyzed- what are the trade-offs? Once mandates are eliminated and expansion rolled back, who will be in the individual market? How will states respond to the gap created when the individual mandate is effectively eliminated but the requirement for continuous eligibility is not yet in place? Can the individual market withstand the transition? Can the Stability Fund achieve its goals and what are the financial obligations of states to help finance it?

3. The move to reform Medicaid assumes the program is broken. Education is needed about the strength of the program, the importance of coverage expansion and the breadth and reach of the program. Does Congress fully understand the successes of Medicaid and the creativity alive in states in program redesign and payment and delivery reform?

4. The bill shifts financial risk for Medicaid to the states without specifying what flexibility would be included. State leaders were quick to note the need to balance risk and flexibility; flexibility may not yield savings sufficient to justify the risk of limited funding and they raised questions about how supplemental payments will be treated in a per capita cap.

5. The bill is silent on the future of federal demonstration funds and the important initiatives they fund in the states such as better serving those dually eligible for Medicare and Medicaid and restructuring how care is delivered and paid for.

6. The bill is silent about the underlying health care cost drivers such as pharmaceutical pricing.

7. The repeal of the Prevention and Public Health Fund will have a significant negative impact in states who rely upon it for addressing chronic diseases, supporting public health infrastructure, disease surveillance and the capacity to respond to public health crises like opioid addiction or Zika.

8. Implementing the bill, should it be enacted, will challenge states.

  • If the ACA taught us nothing else, we learned it is challenging to make significant technological and programmatic changes quickly. Moving from APTC to tax credits, for example, will require deliberation and careful transitioning. The ACA set up new eligibility and other processes that need to be undone and redone.
  • Budgeting for a per capita cap Medicaid will be challenging, particularly given the unpredictability of health care costs and the threat of an annual “clawback” requiring states to pay back the federal government should caps be exceeded.
  • Tracking the coverage of enrollees will require work to document whether a Medicaid member had been continuously enrolled for all but a month or that others are privately insured with a lapse in coverage no greater than 63 days

9. The requirement for continuous enrollment and the removal of actuarial values from benefit plans could disproportionately affect persons with mental and physical disabilities who need comprehensive care and who may be challenged to navigate the complex health coverage field

10. The bill could return us to a day when the individual market was characterized by lower premiums but narrow benefits and high deductibles. States raised concerns that the proposed market reforms could disproportionately affect – and raise prices –in rural and frontier areas. Continuing risk mitigation and carefully structuring the State and Patient Stability Fund will be important

NASHP will continue to convene leaders as the American Health Care Act is debated and as the Administration provides additional information about Phases 2 and 3 of the reform proposal. Our goal is not to make judgements about the policy proposals but rather to identify barriers and opportunities for states as they contemplate how they might implement the proposals.

Support for this work was provided by the Robert Wood Johnson Foundation. The views expressed here do not necessarily reflect the views of the Foundation.