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Trump ‘can unleash HHS to bedevil ObamaCare’

March 25, 2017

In a spectacular turn of events, a shortage of support prompted Republican leadership to pull their health-care plan from a House of Representatives vote on Friday. The move means that the Affordable Care Act, also know as Obamacare, will remain in place “for the foreseeable future,” according to House Speaker Paul Ryan.

Democrats, ACA supporters and opponents of the Republican American Health Care Act quickly hailed the development as a victory. But what was a legislative battle now is likely to move into the executive realm and the Department of Health and Human Services, led by longtime ACA opponent Dr. Tom Price.

Experts say there is plenty that President Donald Trump’s administration can do to undermine the ACA. And any poor deterioration in the performance of the ACA could give Republicans a new opening: Trump indicated Friday that he might re-visit health care after Obamacare “explodes.”

“It’s going to be interesting to see how they balance the responsibility for ensuring the government functions with their hatred for the law,” said Spencer Perlman, director of health-care research at Veda Partners. “If they want to completely sabotage it they probably could, and call it a self-fulfilling prophecy.”

The latter is all the more likely because the ACA works best with the help of administrative support and resources. Think of the ACA as a plant, one that requires light and tending-to, that gets inherited by a downright hostile owner.

The best example of this occurred during enrollment for 2017 exchange plans. The months-long enrollment period began under former President Barack Obama’s administration, which passed the ACA, and ended under President Trump’s administration.

Enrollment, which had looked like it was on track to surpass previous years, dropped off following the transition, which many attributed to a dearth of marketing and promotional activity under Trump.

 

 

Plus, the ACA’s problems — which may have helped elect Trump — still exist. Many insurers, including UnitedHealth Group Inc. UNH, -0.18% Humana Inc. HUM, -1.26% and Aetna Inc. AET, -0.83% have exited the exchanges on which many participants purchase health insurance, contributing to a 25% on average increase in premiums.

“The biggest thing that needs to be done is figuring out some way to attract young, healthy people” to exchange plans, Perlman said.

But HHS, under Price’s leadership, seems unlikely to try to improve the law. And “purposefully sabotaging the exchanges and the ACA probably isn’t difficult,” said Perlman. And for that matter, HHS is “probably the only game in town right now” that can do it.

Health insurers inherit the bulk of Friday’s political uncertainty. They have until June 21 at the latest to submit bids for participating in the ACA’s exchange, with the 2018 enrollment period beginning at the start of November.

Health insurers “need a stable market, stable rules and a broader pool — none of which has been fixed yet, nor does it seem likely it will be in time,” Sheryl Skolnick, Mizuho Securities’ director of research and senior health-care analyst, told MarketWatch in early February.

 

HHS can easily employ administrative and regulatory actions to undercut the ACA, though it can’t implement something in direct opposition to the law, Perlman said.

Two of the agency’s most powerful tools, ironically, came about through the ACA.

The Centers for Medicare & Medicaid Services’ Innovation Center has “huge authorities” which could be used to make changes to Medicaid, Perlman said. And another ACA creation, the Independent Payment Advisory Board, has “extraordinary powers” that Price can use without “a lot of legal or statutory limitation,” he said.

Then there are the ACA subsidies, which make exchange plans affordable to middle and low-income individuals. If HHS declined to appropriate them, it would “immediately destroy the exchanges,” Perlman said. It’s also possible, though unlikely, that tax reform — Republicans’ next project — could reverse the subsidies, he said.

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