Blue Cross and Blue Shield of Louisiana President and CEO Dr. I. Steven Udvarhelyi hopes politicians keep in mind how all the parts of the Affordable Care Act fit together as they begin to repeal and replace the landmark health care law. “There were a number of interrelated pieces to the Affordable Care Act. So when you decide you want to change one piece and not the interrelated pieces, it creates unintended consequences,” he says. Photography by Collin Richie
With Republicans poised to take charge of both Congress and the White House, they may finally be in position to make good on their oft-stated intention to “repeal and replace” the Affordable Care Act, better known as Obamacare. But local experts say they are unlikely to scrap the ACA entirely.
Lawmakers are under political pressure to keep the most popular elements of the act, while dumping the mandates and fees that arguably make everything else possible. Shortly after being elected president, Donald Trump suggested he was open to amending rather than repealing the ACA, but he has since tapped Georgia Rep. Tom Price, a staunch repeal proponent, as secretary of Health and Human Services.
Dr. I. Steven Udvarhelyi, president and CEO of Blue Cross and Blue Shield of Louisiana, hopes politicians keep in mind how all the parts of the ACA fit together.
“There needs to be an orderly transition,” he says. “There were a number of interrelated pieces to the Affordable Care Act. So when you decide you want to change one piece and not the interrelated pieces, it creates unintended consequences.”
THE GRAND BARGAIN
At its core, the ACA was a grand bargain. Put simply, almost everyone in America was required to buy health insurance. In return, the insurance industry was not allowed to deny coverage to those who needed it most. The second part of that deal is wildly popular; the first, not so much.
So what happens if the guaranteed-issue provision is maintained while the mandate to buy insurance is not? Udvarhelyi suggests the recent price increases for many policies may be a preview.
Except for a few special circumstances, consumers were only supposed to be able to sign up for coverage through the federal exchange during specific enrollment periods. But those rules have not been enforced, insurers say.
People with serious medical needs were allowed to sign up for a policy, pay their bills for a month or two while receiving services, then drop their coverage. That’s not how insurance is supposed to work, and when people can get away with that they drive up costs for everyone else. Wipe out the mandate entirely, while still requiring insurers to cover everyone that asks, and you exacerbate the problem, Udvarhelyi says.
However, he suggests the mandate could be replaced with different incentives. America’s Health Insurance Plans, the industry’s main lobby, suggests a new approach could include late enrollment penalties and waiting periods, along with a greater role for health savings accounts and high-risk pools to cover sick people.
Most of the people buying policies on the federal exchange get subsidies. Congressional Republicans say they want to eliminate those subsidies while also rolling back the Medicaid expansion, which worries a former doctor like Udvarhelyi.
“We’ll lose some of the access gains we’ve had, which I think is a step backward,” he says.
In an email, Louisiana Department of Health officials say they don’t want to speculate about the next president’s health care plans, but note that there have been calls for reducing federal funding for the Children’s Health Insurance Program, eliminating federal funding for Medicaid expansion to low-income adults, and making Medicaid a block grant program. Almost 350,000 Louisiana residents received coverage through the Medicaid expansion, department spokesman Robert Johannessen says.
“The result is many hundreds of people are now getting treated for diabetes, breast cancer and heart disease at considerable less cost than if they were diagnosed later when their illness is more advanced,” he says, adding the department is analyzing the financial impact of the various possibilities and is “committed to working with President-elect Trump’s administration to ensure continued access to affordable health care to Louisiana residents.”
Louisiana Department of Insurance Commissioner Jim Donelon expects several ACA policies—such as guaranteed issue, allowing children to stay on their parents’ policies until age 26, and not having lifetime limits on policy benefits—will survive. He expects the restrictions the ACA puts on the premiums of older policy holders will be loosened, which would likely lead to higher costs for them but lower costs for younger consumers with fewer health risks.
Price says he wants to allow health insurers to sell policies across state lines. But state officials say they know their markets best, and argue interstate sales would undermine Trump’s pledge to scale back the federal government’s role in regulating health insurance.
Donelon fears national health insurers would be domiciled in the most lightly regulated states, resulting in a “race to the bottom.” He says Louisiana does a good job monitoring insurance companies’ solvency, and he wouldn’t necessarily trust every other state to do it as well.
‘KEEP WHAT WORKS’
The Louisiana State Medical Society generally supports repealing the ACA, says executive vice president Jeff Williams, although they want everyone to have coverage of some sort. The LSMS wants to “keep what works”—including guaranteed issue and transparency about how much insurance companies spend on health care versus overhead—and “fix what’s broken,” such as onerous paperwork and reporting requirements for doctors.
While the LSMS has qualms with how the state’s Medicaid program has been managed, a rollback of the Medicaid expansion would hurt doctors who serve low-income patients, Williams says. Medical practices ought to have cash on hand or access to working capital in case they don’t get paid for a while if something changes, he says.
“Really, it’s a waiting game at this point,” Williams says.
Donna Fraiche, a health care attorney with Baker Donelson, says uncertainty about what will happen to the ACA is “keeping the C-suite up at night.” She is telling her clients, which include large health care systems, to create financial models that reflect various possible scenarios. Some have built “systems of wellness” to treat patients with chronic conditions who, if the ACA is dismantled, may no longer be able to pay.
“What’s going to happen when you lose access to those revenues?” she wonders. “Will those patients be turned away?”
The ACA was a “mixed bag” for the health care industry, says Our Lady of the Lake CEO Scott Wester. Louisiana was not an early adopter of the Medicaid expansion, so providers here didn’t benefit as much from the ACA as those in other states, he adds.
Wester wants the next president and Congress to find ways to lighten his hospital’s regulatory burden. But he hopes they preserve ACA initiatives that promote collaboration among insurers and providers to improve quality of care, reduce readmissions and save money.
He says an “accountable care organization” (as the ACA calls such partnerships) including OLOL, Mary Bird Perkins Cancer Center, Woman’s Hospital, the Baton Rouge Clinic and physician groups is “doing great work.” Such organizations seek to reward providers for keeping patients healthy, instead of merely compensating them based on the number of services they perform.
“The ACA changed our landscape, and right when everybody figured out how to work within the new construct, here we are about ready to change it,” Wester says. “It makes a lot of people nervous.