FEDERAL POLICY UPDATE Obamacare: Repeal & Replace 1001 G. St, NW | Washington, DC | 20001 | www.wscdc.com

ACA Fast Facts ACA Status Report Repeal & Replacement Major Elements Coverage & Insurance Reforms Health Insurance Exchanges Medicaid Expansion ACA Status Report Successes Challenges/Criticisms Repeal & Replacement ACA’s Greatest Enemies Take Control of Washington GOP Leadership Objectives Getting the Votes American Health Care Act What Now? American Health Care Act 2.0 Use of Executive Branch Authority

Seven Major Elements Coverage and Insurance Reform Signed by President Obama on March 23, 2010 Coverage and Insurance Reform Medicare/Medicaid Payment Changes Delivery System Reforms Workforce/Graduate Medical Education Wellness and Prevention Disparities, Comparative Effectiveness Regulatory Oversight/Program Integrity

Coverage & Insurance Reforms State-Based Health Insurance Exchanges Government-regulated marketplaces for private insurance coverage. Administered by federal government or state government 10 essential health benefits Coverage Reforms (e.g. pre-existing conditions) Federal subsidies 100%–400% of the federal poverty level.

Coverage & Insurance Reforms (continued) Medicaid Expansion State option to extend eligibility childless adults with income up to 138% FPL 100% federal share phases down to 90% in 2019. Pre-Expansion Medicaid Eligibility limited to low-income children, pregnant women, parents of dependent children, elderly, disabled. Federal share: 50%–75% (NJ 50%)

Coverage & Insurance Reforms (continued) Medicaid Expansion by State WY WI* WV WA VA VT UT TX TN SD SC RI PA OR OK OH ND NC NY NM NJ NH* NV NE MT* MO MS MN MI* MA MD ME LA KY KS IA* IN* IL ID HI GA FL DC DE CT CO AR* AZ* AK AL CA Adopted (32 States including DC) Not Adopting At This Time (19 States) Source: Kaiser Family Foundation

Coverage & Insurance Reforms (continued) New Jersey Medicaid Program Expansion Effective 2014 Eligibility Percent of FPL Children 355% Pregnant Women 205% Parents 138% Childless Adults Seniors/ Disabled 100% Mandatory Services Hospital Inpatient/services Laboratory tests/X-rays Screening/Diagnostic Home health care Physician services Nurse-midwife services Family planning Nursing facilities Optional Services prescription drugs, dental, optometry, chiropractic etc.

Successes 26 million Americans covered Uninsured rate reduced by 50% Nationally 26 million Americans covered 12 million: Medicaid Expansion Enrollment 13.8 million: ACA Exchanges Uninsured rate reduced by 50% Hospital uncompensated care down 25% ($10 billion) 12M 13.8M UNINSURED 50% 25%

Successes (continued) New Jersey 800,000 people covered 547,000: Medicaid Expansion 249,000: New Jersey ACA Exchange Uninsured rate reduced by 50%

Successes (continued) Passaic 14,570 47,846 Bergen 31,845 40,820 Sussex 4,399 5,667 Successes (continued) Essex 19,498 69,780 Warren 2,926 5,512 Morris 13,647 14,224 2016 Health Insurance Marketplace and Medicaid Expansion Enrollment Statewide 249,395 546,896 Total enrolled in marketplace plans Total enrolled in Medicaid Expansion Hudson 19,045 58,489 Somersest 9,113 10,007 Union 14,491 34,620 Hunterdon 3,973 3,368 Middlesex 24,169 42,489 Mercer 8,257 19,416 Monmouth 18,727 26,737 Camden 13,792 45,101 Burlington 11,055 20,186 Gloucester 7,334 16,775 Ocean 16,124 38,053 Salem 1,322 4,106 Atlantic 8,695 24,256 Cumberland 2,730 12,809 Cape May 3,683 6,635

Challenges/Criticisms Insurer exchange participation varies widely by state 5 states have only 1 insurer Premium increases vary widely by state 2017: 1% to 145% Enrollment is 50% of what was predicted Insurers lost $2 billion in 2016

Challenges/Criticisms (continued) Medicaid non-expansion states leave 5.7 million uncovered Medicaid/Exchange costs higher than expected $677 billion in new taxes, fees and penalties $155 billion in cuts to hospitals 5.7 Million Medicaid/ Exchange Costs Taxes, Fees, Penalties $155 Billion

ACA’s Greatest Enemies Take Control of Washington

ACA’s Greatest Enemies Take Control of Washington (continued) President Trump Betsy DeVos EDUCATION Rick Perry ENERGY James Mattis DEFENSE Tom Price HHS Wilbur Ross COMMERCE Jeff Sessions JUSTICE Ben Carson HUD Sonny Purdue USDA David Shulkin VA Steven Mnuchin TREASURY John F. Kelly DHS Elaine Chao DOT Rex Tillerson STATE Ryan Zinke INTERIOR Andrew Puzder LABOR

ACA’s Greatest Enemies Take Control of Washington (continued) 115TH Congress Democratic Caucus 48 Republicans 52 Democrats 194 241 U.S. Senate U.S. House 51 seats needed for majority 218 seats needed for majority

GOP Leadership Objectives Repeal ACA Make coverage voluntary/affordable Shrink Medicaid spending Transfer regulatory authority to states

Getting the Votes 51 votes to repeal 60 votes to replace 52 Republican Seats 218 votes to repeal/replace 247 Republican Seats Freedom Caucus (ultra conservatives) Tuesday Group (moderates)

American Health Care Act Shifting strategy leads to collapse January Leverage election results to immediately repeal. replace to come later February Moderate Republicans nervous about repealing without a replacement. Leadership scrambles for replacement.

American Health Care Act (continued) Shifting strategy leads to collapse March House Republican leadership unveils American Health Care Act. Moderates rebel: millions would lose coverage.! Freedom Caucus rebels: It’s ObamaCare Lite! Intense negotiations to get needed votes. Leadership abandons moderates, focuses on deal with the larger Freedom Caucus. Last minute negotiations fail; vote scheduled for March 24 is cancelled.

American Health Care Act (continued) Provisions Repeals mandates and subsidies Delays Cadillac tax delayed—other taxes repealed Annual tax credits to purchase coverage $1 billion for high-risk pools Medicaid expansion repealed in 2018 states may continue expansion to receive expansion rates State option for Medicaid to block grants

American Health Care Act (continued) Impact 14 million lose coverage in 2018 24 million lose coverage by 2026 Premium increases 15–20% Medicaid reduced by $880 billion 14 million people lose Medicaid 30% of Medicaid beneficiaries in expansion states would lose coverage.

What Now? American Health Care Act 2.0? Possibilities American Health Care Act 2.0? Use Executive Branch Authority to: Reduce Medicaid Spending Shrink Exchange Enrollment Stem Insurer Losses -$

$15 billion for “invisible high-risk pools” WHAT NOW? (continued) American Health Care Act 2.0 $15 billion for “invisible high-risk pools” Paid to insurers for high cost patients Allow state waivers to opt out of: Essential Health Benefits Community Rating

Co-pays and other cost-sharing Restrict eligibility WHAT NOW? (continued) Executive Action: Reduce Medicaid Spending 1115 waivers to redesign Medicaid programs around conservative principles: Work Requirements Co-pays and other cost-sharing Restrict eligibility Redefine minimum coverage requirements Expand managed care

End enrollment advertising WHAT NOW? (continued) Executive Action: Shrink Exchange Enrollment Options End enrollment advertising End mandate enforcement Shorten/eliminate enrollment periods Eliminate Subsidies

Fund and Extend Risk Corridor/Reinsurance Programs WHAT NOW? (continued) Executive Action: Stem Insurer Losses Options Fund and Extend Risk Corridor/Reinsurance Programs Adjust Essential Health Benefits Encourage states to use ACA 1332 innovation waivers to shift high costs patients from exchanges to high risk pools.

Kyle Mulroy kmulroy@wscdc.com