The Republicans released their health care plan to replace Obamacare on March 6th and the response has been decidedly mixed. While much of the criticism falls into the realm of partisan politics, the bill's particulars do have many in the health care industry concerned about what lies ahead.
In fact, several major doctor and health care associations have come out against the plan, including the AMA, the American Academy of Pediatrics, the American Academy of Family Physicians, and the American Hospital Association. Most of the criticism is based on assumption that the American Health Care Act (AHCA) will strip millions of Americans of their insurance coverage under Obamacare, especially those covered under the Medicaid expansion.
The Congressional Budget Office estimates that up to 14 million people will lose coverage by 2018 and 24 million by 2024. While those numbers sound enormous, it should be noted that the CBO is notoriously bad at projecting coverage outcomes. When Obamacare was scored, the CBO projected that 24 million people would be enrolled in the individual exchanges by 2016; the actual figure was roughly 11 million.
How the AHCA Affects Patient Load
The uninsured are far less likely to get routine and preventive medical care, only seeking treatment for acute illness and injury—and most often in emergency rooms. If more Americans go without coverage, the thinking goes, patient care will shift dramatically toward emergency room physicians and away from primary care doctors such as family practice physicians and pediatricians.
In practice, however, this is may not be the case. The broad Medicaid expansion under Obamacare was supposed to decrease emergency room visits by providing more low income people access to primary care, but the reality was quite the opposite. According to a 2016 study by the Journal of the American Medical Association, ER visits increased 40% among those covered by Medicaid. At the same time, outpatient doctor visits also increased, although not at the same rate.
Medicaid Under the AHCA
The vast majority of the increase in uninsureds comes as a result of changes to the Medicaid program. Under the AHCA, Medicaid funding to the state moves to a capitated system, with a set amount released to the state for each person covered by the program. This move is designed to radically transform the program, scaling back the expansions under Obamacare.
Practices who see a large number of Medicaid patients may experience some reduction in revenue streams. It's important to note, however, that fewer than 66% of providers currently treat patients with Medicaid and fewer than 47% accept new patients covered under the program.
On the other hand, hospitals who treat a high number of Medicaid patients may actually see their revenue increase, as the Republican plan actually reinstates the disproportionate share payments that were curtailed under Obamacare.
The Patient and State Stability Fund
The bill sets up a new fund to help states bridge the gap created by Medicaid rollbacks. Specifically, money will be doled out based on each state's medical loss ratio and relative share of incurred claims. The $100 billion fund is earmarked for:
- cash assistance for high-risk individuals
- lowering the cost of insurance for high-utilization individuals
- promoting preventive, vision, dental, mental health, and substance abuse care
- reimbursing entities that provide these preventive services.
What TrumpCare Doesn't Do
The new bill does not repeal many of the insurance reforms under Obamacare, specifically:
- coverage for pre-existing conditions
- guaranteed renewal
- dependent coverage to age 26
- essential health benefits for maternity care, prescription drugs, mental health coverage, and other requirements under Obamacare
In addition, the new plan maintains caps on annual out-of-pocket costs and removes annual and lifetime benefits caps.
The bottom line
It is unclear at the moment how the Republican bill will affect the increased regulatory and reporting burdens under Obamacare, but given the new administration's commitment to reducing regulations, it's highly likely the bill will reduce them. There's also a strong push to eliminate the Independent Payment Advisory Board (IPAB), the regulatory body with authority to order mandatory cuts in Medicare reimbursement rates.
We are carefully monitoring all developments as the legislation makes its way through congress so that we can best advise providers on how the final bill will affect them. If you have questions about your reimbursement under TrumpCare, contact us today for a free consultation.