Emerging Federal Health Policy Changes: Understanding proposals and assessing impacts on Oregon’s Health System Transformation Presentation to the Health Care Workforce Committee March 8, 2017
Overview • Collaborative Analysis by OHA & DCBS of Federal Proposals & Impacts • Update on Congressional Actions and Potential for ACA Changes in Current Congressional Session – Budget Reconciliation process and ACA repeal • Examining Elements of High Profile ACA Alternative Plans – Focus on Medicaid reforms & other OHA priorities – Broad Highlights of Key Proposals 2
Congressional Timeline for Repealing and/or Replacing ACA Keeps Changing • Congressional work possible throughout 2017, into 2018 • Scope of repeal & replace remains unclear – Full, stand-alone repeal appears unlikely – Several targeted repeal & replace proposals introduced – No clear consensus intra-GOP or between House & Senate – Only broad Presidential priorities outlined in congressional address • Many challenges facing congress: – Fully repealing entire ACA requires 60 votes in US Senate – Congressional leaders & administration have not agreed upon replacement proposal – Bipartisan set of Govs & Senators from states w/ Medicaid expansion 3
Budget Reconciliation – Multi-Step Process Now Underway • First step: House & Senate enacted a budget resolution – Resolution DOES NOT repeal ACA; provides framework to repeal parts of ACA through process requiring only 51 votes in Senate • Reconciliation bill starts in House – drafts emerging – Limited to budgetary items & may not be able to repeal some policy & regulatory provisions of the ACA – Final bill dependent on Senate rules & parliamentary decisions – Provisions not able to go through reconciliation process require 60 votes in the U.S. Senate • Drafts of House bill emerging includes aspects of “replace” • GOP Governors from expansion states also weighing in 4
Prominent ACA Alternatives - Summarized Ryan Price Hatch Cassidy/ Draft House Collins Plan Mandates Repeal Repeal Repeal State option Repeal Medicaid Block Grant / Repeal Per-Capita State opt: ACA Per-capita per-capita Cap Expansion Cap or HSA-based cap, no enhanced expansion $ Yes Yes Yes No No X-State Sales Age-Based Age-Based Age-Based ACA cont OR Age-based, Tax HSA-based refundable Credits? Higher Higher Higher Roth HSA (post- Higher HSAs Contributions Contributions Contributions tax, pay 4 Contributions premiums) 5
House Reconciliation Plan Emerging • Eliminates mandates and ACA’s taxes, fees, and penalties • Focus on high-deductible, health savings account plans • Replaces ACA subsidies with age-based tax credits • Innovation grants to states for high risk pools & more • Caps tax-exclusion for employer health plans • Medicaid reforms to cap funds, eliminate expansion • Eliminates funding to prevention and public health fund, prevents fed funds to planned parenthood, adds funding for community health centers 6
Draft House Plan: Consumer Protections • House bill keeps: – Guaranteed renewal, eliminating lifetime/annual benefit caps, maintaining dependent coverage up to age 26 and eliminating pre- existing condition exclusions and medical underwriting • Limits Guaranteed issue protections to consumers who maintain continuous coverage for 12 months – Those without continuous coverage could be charged 30% more • Eliminating Essential Health Benefits Requirements – Could shift responsibilities to states to define coverage reqs. • Increases age-rating band to 5:1 (currently 3:1 per ACA) • Age-based, refundable tax credits ($2,000-$4,000) replace ACA’s credit structure in 2020 7
Draft House Plan: Medicaid Reforms • Enhanced federal funding for expansion expires in 2020 – Already enrolled people continue to generate higher match, other enrollees funded at regular FMAP • Creates per-capita caps starting in 2019 – Caps federal funding on per-enrollee basis – Set federal allotment for enrollees based on their eligibility category – Elimination of essential health benefits removes some Medicaid requirements – Broad flexibility may require separate legislation, executive action • Removes 6% federal funds bump for some community- based, long-term care services (1915 k option) 8
House Medicaid Reform Considerations • Congressional debate RE: ACA’s Medicaid expansion – 31 expansion states want to protect $ (many with R Gov/Sen) – Non-expansion states want new funding added to baseline – Status of ACA’s CHIP funding bump is unclear • Federal caps would affect states differently – States already taking steps to reduce spending growth (Oregon) could be disadvantaged – States with higher Medicaid spending could disproportionately benefit from caps & federal flexibility – Ultimate impact on Oregon will depend on details not yet available – especially regarding expansion funding 9
Potential Challenges / Opportunities • Reduced federal investment likely shifts costs to states – Medicaid, tax credits for private coverage, public health funds, etc … • Reduced federal regulatory oversight shifts regulatory authority back to Oregon – BUT, cross-state sales of health insurance limits states ability to regulate their own insurance market • Added state flexibility may be good for Oregon given historical focus on innovative health policy • Potential executive branch changes to waiver processes & allowable provisions may create opportunities / challenges • Uncertainty related to federal budget process 10
Questions? 11
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