On the first day of the Trump presidency, 1/6th of the U.S. economy, or $3.2 trillion, revolved around healthcare.1 Twenty millionpeople gained healthcare coverage after the Patient Protection and Affordable Care Act (“ACA” or “Obamacare” to opponents)—roughly half the number of uninsured that the ACA sought to cover.2 In October 2016, President Trump promised during a rally in Sanford, Florida, that “My first day in office, I am going to ask Congress to put a bill on my desk getting rid of this disastrous law and replacing it with reforms that expand choice, freedom, affordability.” One hundred days later, he is woefully short of that goal—and for good reason given the magnitude of the undertaking and the human costs of giving and then taking away. This Article first reviews where healthcare reform is nationally today and then charts some guideposts going forward.
I. Healthcare Reform on Life Support
The public was, at best, divided about whether to repeal and replace or simply modify the ACA, just as they were divided over Trump vs. Clinton.3 Most wanted to continue feel-good pieces of the ACA, like the insurance reforms allowing students to stay on a parent’s insurance until age twenty-six. 4
The ACA also erased the practice of “experience rating”—that is, charging people who pose higher risks a higher amount, like we do with reckless drivers and auto insurance—so that no one would ever be denied or priced out of health insurance for a preexisting condition (although smokers could be charged more). And, the ACA removed the lifetime cap on what can be spent on any one patient, creating a far-harder-to-price open-ended promise. Under the ACA, “most newly insured are forced into Medicaid, not private insurance.”5
Not surprisingly, the cost of insurance on the exchange jumped significantly. For example, just focusing on the “bronze” plan, 2017 average annual premiums increased 21% for those not eligible for government subsidies, combined with average deductibles as high as $6,000. Americans voted with their wallets.
Still, 5 million of the poorest said no to coverage through the ACA, even though they might qualify for subsidies or free Medicaid coverage. Whether for economic reasons or political spite, state legislators in nineteen states refused to expand their Medicaid safety nets to encompass people who fall at 400% of the federal poverty line or below, declining the significant financial carrots extended by the ACA—and were backed up in that choice by NFIB v. Sebelius,6 which found the ACA’s financial penalties for declining to expand Medicaid too coercive.
In the face of this complexity, President Trump promised to fix Obamacare on Day One, then he promised the first 100 days, then he said “[s]omebody put out the concept of a 100-day plan,” he did not.
The initial plan floated by Republicans, known as the “AHCA,” arrived stillborn at Congress. Its major provisions were to repeal the individual and employer mandates from the ACA, keep some of the ACA’s more popular reforms, such as protections for enrollees with preexisting conditions and allowing adult children to stay on their parent’s plan until age twenty-six. Changes included decreasing and modifying premium tax credits by 2020 and increasing the ratio that insurance companies can charge older enrollees for premiums compared to younger enrollees (aka “age band rating”). The nonpartisan Congressional Budget Office found that Medicaid enrollment would drop “because some states would discontinue their expansion of eligibility, some states that would have expanded eligibility in the future would choose not to do so, and per-enrollee spending in the program would be capped.”
A slow IV drip of news reported that “House GOP leaders scrambled . . . to muster support for their plan…[Speaker Paul] Ryan and his allies spent [days] floating the potential modifications — at the request of the White House — to members.” The president’s groundless optimism ran into coalition politics: Speaker Ryan, Vice President Pence, and the White House scrambled “to gauge whether the amendments could win over skeptical conservatives without repelling moderates, who are wary of political blowback if the bill moves too far to the right.” And that blowback was real.7
The leadership did little, some would say nothing, to build a groundswell of support for their vision. To the Democrats’ “79 bipartisan hearings and markups [of the ACA] over the period of an entire year” in the House of Representatives alone, Republicans had exactly zero public hearings on the AHCA. Meanwhile, emerging in members’ districts were real Americans who would lose healthcare coverage under the AHCA or a straight repeal of the ACA.
Major newspapers like the New York Times and the Washington Post put a human face on these fiscal decisions. Ironically, many who would bear the cost of reform had voted for President Trump. Consider Martha Brawley of North Carolina, “she and her husband could barely afford their current premiums, and her deductible of $3,500 a year is far too high. Still, she added, ‘it’s better than owing $20,000 or $30,000.’” Before Obamacare, Martha did not have any coverage, “and didn’t go to the doctor;” “she and her husband voted for Mr. Trump . . . because [she] thought he would make it better.”
As problematic, the states that had expanded Medicaid were sure to lose the package of carrots that induced them to expand Medicaid in the first place.8 This bare fact drove a wedge between Republicans concerned about fairness between the states and those whose states stood to lose nothing if the ACA was repealed.
In other words, President Trump and Speaker Ryan ran headlong into a classic public-choice problem. The initially proposed AHCA bill would have made several changes to what health insurers can charge enrollees who purchase insurance on the open insurance market, as well as changing what benefits their plans must cover. The end result would create changes that would likely be advantageous to younger and healthier enrollees, who want more basic (and less expensive) benefits, while making it much more expensive for older, and potentially less healthy, enrollees who rely on the ACA for coverage.
Dogged by the enormity of the task, Speaker Ryan announced that the AHCA would not be pursued. Rumors of its death were overblown. On April 12, 2017, President Trump said, “I think we’re doing very well on health care. It’s been very much misreported that we failed with health care.”
II. Resuscitating Healthcare Reform
In the renewed push to overhaul the ACA, Congress should pay attention to not only the economics and fairness of back-walking social support that Americans have come to rely on, but also to how well the doctor-patient relationship is working in the current climate. Doctors are overwhelmed with the pace of change. In 2015, the Annals of Internal Medicine reported that 49.2% of physician time was spent on electronic health records and desk work during the day, in addition to an extra one-to-two hours each night during their personal time, leaving just 27% of their time to providing direct clinical face time to patients.
Physicians report an “alarming rate of burnout and dissatisfaction.” Surveying over 14,000 physicians across more than thirty specialties about “burnout”—defined as a loss of enthusiasm for work, feelings of cynicism, and a low sense of personal accomplishment—Medscape, in 2017, found that 51% of all physicians experienced burnout, up from 40% in 2013—a 25% increase in the space of four years. The main causes: doctors are flooded with “too many bureaucratic tasks” and are “spending too many hours at work.”
The move to electronic health records, into which the Centers for Medicare and Medicaid Services (“CMS”) poured billions of dollars in incentives, has played a role. Physicians say that it is changing the doctor-patient experience:
[T]he electronic health record (EHR) that I am obligated to use . . . interrupts me with text boxes to remind me of every possible drug interaction whenever I order a prescription. It makes me commit to a diagnosis as a heading before I can enter anything the patient tells me. And the “meaningful use” criteria force me to click box after useless box to generate a turgid document.
Patients have noticed the change. One legislator we recently visited with said, “My doctor talks to the screen.”
Physicians are wrestling with a sea of changes, together with carrots changing to sticks as the ACA is further implemented. CMS is beginning to reduce payments to physicians and hospitals that do not comply with various CMS initiatives. For example, in 2012, CMS started imposing a penalty on physicians who do not meet e-prescribing (“eRX”) levels. In 2015, CMS began imposing penalties for not complying with EHR implementation standards, after first giving incentive payments for “meaningful use” of EHRs. Also in 2015, CMS began levying penalties based on its Physician Quality Reporting System (“PQRS”), in which physicians report quality measures that they select from a CMS list.
Hospitals are not exempt from penalties, either. For example, since October, 2012, CMS, through the Hospital Readmissions Reduction Program, has cut payments to those hospitals that see the return of an excessive number of patients within thirty days after discharge for specified conditions.
On the near horizon is a proposed mandatory pilot program designed to reward or penalize hospitals for their economic performance in managing a patient’s ninety-day cost of care related to acute myocardial infarction, coronary-artery-bypass graft, and surgical hip/femur-fracture treatment, in addition to a similar program launched last year related to joint replacement.
While CMS sees these types of changing payment models as part of its overall shift from “volume to value,” hospitals and physicians are finding that they can be penalized for events outside their control. They express frustration that these types of reimbursement models are not being adequately tested prior to implementation.
For example, many of these programs were rolled out with limited advance information, leaving physicians and hospitals struggling to adequately prepare for the reporting requirements. Providers’ ability to successfully comply with these penalty programs is inextricably linked to the sophistication of their EHR system and that system’s ability to extract and report data. Finally, both hospitals and physicians believe that outdated self-referral, fraud, and abuse laws, particularly the Stark law, throw barriers in the way of the kinds of collaboration needed to be successful in redesigned structures of care.
Regarding episodic payment, newly confirmed Secretary of Health and Human Services (“HHS”) Dr. Tom Price echoed the sentiments of many physicians when he previously criticized CMS for this approach and has now delayed the planned implementation date.
The selection of Dr. Price as HHS Secretary has been polarizing, drawing both support and criticism from the medical community. A recent visit to Washington to meet with legislators, however, confirmed that many are looking to Secretary Price to lead the way on many healthcare-reform efforts, and they expect him to collaborate widely with his former congressional colleagues who make up the GOP Doctors Caucus.
Whatever happens legislatively, one thing seems highly likely: HHS, under Secretary Price, will undo politically divisive aspects of the ACA, such the contraceptive coverage mandate (“Mandate”) that has been so deeply contested.9 President Trump campaigned on promises to end the Mandate.10 As late as 2012, Secretary Price responded, when asked what would happen to “low-income women . . . if this rule is rescinded?”: “Bring me one woman who has been left behind. Bring me one. There’s not one . . . The fact of the matter is this is a trampling on religious freedom and religious liberty in this country.”
In confirmation hearings, Secretary Price said that he would want a system where “women and all Americans have access to the care and kind of coverage they want.” Under that more nuanced stance, the Mandate might stay intact.
But, the draft of an Executive Order rumored to be under consideration by the Trump administration would suggest otherwise. It would require HHS and other federal agencies that enforce the ACA to “immediately issue an interim final rule that exempts from the preventative-care mandate set forth in 42 U.S.C. 300gg-13(a)(4) all persons and religious organizations that object to complying with the mandate for religious or moral reasons.”11
This holds an important lesson for health policy. Because the notion of “essential health benefits” does not appear in the ACA, only in regulations, this core element of preventative-care services can be undone by regulation after a notice and comment period—and almost certainly will.12
Many political commentators expect Secretary Price’s HHS to rip out root-and-vine regulations on other controversial topics, too, like the access of transgender persons to healthcare services under § 1557 of the ACA.
Regulations promulgated under ACA § 1557 prohibit discrimination on the basis of gender identity. Late last year, the U.S. District Court for the Northern District of Texas, in Franciscan Alliance, Inc. et al v. Burwell, enjoined those regulations nationwide. HHS’ Office for Civil Rights does not now enforce those regulations and will not while the injunction remains in place. Given the rancor around these questions, it would be stunning if HHS, under Secretary Price, did not take the further step of repealing the regulations so only the ACA prohibition remains.
III. Conclusion
What discussion there has been around healthcare reform has largely accepted the constraints established by the Obama administration in the ACA. The whole edifice of the ACA rests on cross-subsidies from the healthy to the sick, and the healthy are not taking the offer. It is difficult to imagine that healthcare reform can be meaningful—or achievable—without going back to scratch and thinking about what it means to have a doctor-patient relationship and what we value in a healthcare system. For that conversation to work, we need to slow matters way down so that a transparent and honest discussion of what Americans’ value—and what is due to one another, and what we can afford, and what is sustainable—can unfold.
* Robin Fretwell Wilson is the Roger and Stephany Joslin Professor of Law and Director of the Epstein Health Law and Policy Program at the University of Illinois College of Law. Ryan Graver is the President of MedAxiom Ventures. Larry Sobal is the Executive Vice President of Business Development for MedAxiom Ventures.
1 17.8% of gross domestic product consisted of health spending and 2015 expenditures equated to $9,990 per person.
2 Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), amended by Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 through May 1, 2010.
3 Donald Trump received 306 electoral votes and 61,201,031 popular votes, while Hillary Clinton received 232 electoral votes and 62,523,126.
4 85% favor “[a]llowing young adults to stay on their parents’ insurance plans until age 26.” For a review of the insurance reforms, see Annie L. Mach & Bernadette Fernandez, Private Health Insurance Market Reforms in the Patient Protection and Affordable Care Act (ACA), Cong. Res. Serv. Rep. R42069 (Feb. 10, 2016), https://fas.org/sgp/crs/misc/R42069.pdf.
5 J.D. Epstein, The Government’s Golden Rule: America’s Attempts to Control Health Care Payment, J. Health & Life Sci. L. ___, * 57 (forthcoming June 2017) (on file with authors).
6 Nat’l Fed’n of Indep. Bus. v. Sebelius, 132 S.Ct. 2566 (2012).
7 See Kevin Drum, AHCA Is the Legislative Broccoli That No One Wants to Eat, Mother Jones, (Mar. 22, 2017), http://www.motherjones.com/kevin-drum/2017/03/ahca-legislative-broccoli-no-one-wants-eat; Sy Mukherjee, Why the GOP’s Obamacare Replacement Is Infuriating Just About Everyone, Fortune (Mar. 7, 2017), http://fortune.com/2017/03/07/gop-healthcare-plan-opposition/; Eli Watkins, Groups Lining Up In Opposition To GOP Health Care Plan, CNN Politics (Mar. 9, 2017), http://www.cnn.com/2017/03/08/politics/interest-groups-politicians-american-health-care-act/.
8 “The new plan does appear to include an olive branch to senators in expansion states worried about their constituents. It would maintain the generous federal funding for that population established by Obamacare — but only if the people are enrolled by 2020 and as long as they never go more than a month without being eligible for Medicaid. Otherwise, the law’s Medicaid expansion would end, and people would likely fall out of coverage over time.”
9 For a review of the controversy and the resulting lawsuits, see Robin Fretwell Wilson, “The Erupting Clash between Religion and the State over Contraception, Sterilization, and Abortion,” in Religious Freedom in America: Constitutional Traditions and New Horizons (Allen Hertzke ed., 2014); Robin Fretwell Wilson, “Demystifying Hobby Lobby,” in B. Atkin, International Survey of Family Law 2015 Edition (2015).
10 Jessie Hellmann, Trump Officials Weigh Fate of Birth-Control Mandate, Hill (Feb. 22, 2017), http://thehill.com/policy/healthcare/320166-trump-officials-weigh-fate-of-birth-control-mandate; Tom Howell Jr., Trump Moves to End Obama’s Cost-Free Birth Control Mandate, Washington Times (Jan. 23, 2017), http://www.washingtontimes.com/news/2017/jan/23/trump-moves-to-end-obamas-cost-free-birth-control-/.
11 The draft Executive Order defines a “person” to have the same meaning as in the Religious Freedom Restoration Act, which after Hobby Lobby would include closely held corporations—and defines religious organization “broadly” to include closely held corporations and companies that are “operated for a religious purpose, even if its purpose is not exclusively religious,” without limitation to “houses of worship or tax-exempt organizations” or organizations controlled by or associated with houses of worship.
12 Relying on guidance from the Institute of Medicine about what “preventive services are necessary for women’s health and well-being,” the Obama Administration required coverage of the full range of “Food and Drug Administration-approved contraceptive methods, sterilization procedures, and patient education and counseling.” 76 Fed. Reg. 46621 (Aug. 3, 2011); Coverage of Preventive Services Under the ACA, 77 Fed. Reg. 8725, 8727–28 (Feb. 15, 2012) (to be codified at 29 C.F.R. pt. 54) (citing Inst. of Med., Clinical Preventive Services for Women: Closing the Gaps 16 (2011)). The departments concluded that “[t]he contraceptive coverage requirement is . . . designed to serve the compelling public health and gender equity goals described.” Id. at 8729. No plan can be sold—and no employer can self-insure—unless it complies with the Mandate, although churches and religious nonprofits are accommodated, as are closely held corporations that have religious objections after Hobby Lobby. See 76 Fed. Reg. at 46622–23.