Practice Management

The beginning of the end

Will President Trump’s efforts to repeal the Affordable Care Act mean the end of efforts to lower costs, improve quality?


 

No matter on which side of the aisle you sit, and even if you’d prefer to just sit in your car and check Instagram, the results of the November election were likely a surprise. Speculation abounds by pundits and so-called experts as to what a Trump presidency means for health care in this country. The shape and scope of health care initiatives that a Trump administration will attempt to advance in place of the Affordable Care Act (ACA), which has likely met its demise, is unknown at the time of this writing. How Trump’s new initiatives fare in Congress and then get translated into practical changes in health care delivery and financing is even more muddled.


Dr. Weijen Chang
Dr. Weijen Chang

The U.S. medical community has remained largely silent, which is wise given the lack of evidence that would support any rational prediction, but perhaps it’s easier to pronounce judgment from across the pond. The Lancet recently reported the comment of Sophie Harman, PhD, a political scientist at Queen Mary University in London, who told an audience at the London School of Hygiene & Tropical Medicine to “ignore the dead cat in the room.”1 I spent 6 months of my residency in the United Kingdom, and this phrase never came up in my travels across the wards, streets, and pubs of the mother country. Apparently, the “dead cat strategy” is a legislative maneuver to distract attention from a party’s political shortcomings by raising a ruckus about a salacious or social hot-button topic. In this case, the dead cat may just be the carcass of Obamacare, exuding the fetor of millions of people losing their health insurance.

The BMJ, another respected U.K. journal, offered the pronouncement by Don Berwick, MD, former administrator of the Centers for Medicare & Medicaid Services, that Trump’s election would be “disastrous” for U.S. health care, but not much else.2

Figure 1. Cumulative increases in expenses, earnings
Whatever @realDonaldTrump has in mind, the truth not publicized by either party is that the drift of health care costs to patients and families, even amongst the insured, has already been killing household budgets. It has happened via a thousand cuts, in the form of increasing copays and deductibles, and is likely to get worse. Twenty million Americans gained insurance through either Medicaid expansion or subsidized health insurance as a result of ACA, which led to an overall reduction in out-of-pocket costs for Americans on the whole.3 But the pain of out-of-pocket costs spiked in certain situations: Average deductibles for covered employees were $1,478 in 2016, up 12% from 2015 and 49% compared to 2011.4Single-coverage deductibles over this period of time rose cumulatively by 63%.

Out-of-pocket health care expenses for patients and families insured under Medicaid and its ACA-mandated expansion decreased to, on average, less than $500 per year; however, 19 states, all with Republican governors, blocked the Medicaid expansion.5 This denied more than 2.5 million people Medicaid coverage in these states; the overwhelming majority of these people remained uninsured. Uninsured people incur significant out-of-pocket costs when they do require health care, and have worse outcomes.6,7 The end of ACA throws Medicaid expansion in any state, with its protections to limit out-of-pocket expenses, into doubt.
Before the ACA expanded Medicaid coverage, patients faced significant wait times and travel costs associated with the low numbers of providers accepting Medicaid’s low reimbursement rate.8 These numbers had begun to improve after the ACA increased primary care physicians’ Medicaid reimbursements to Medicare rates in 2013 and 2014, but only a limited number of states will continue the increases after the end of federal subsidies.

For people who purchased plans on the ACA’s marketplace, out-of-pocket exposure is capped in 2017 at no more than $7,150 for an individual plan and $14,300 for a family plan before marketplace subsidies. Even those who qualified for cost-sharing deductions, with incomes between 100% and 250% of the federal poverty level, had out-of-pocket caps that varied widely depending on plan and state. For example, in 2016 at the $17,000 annual income level, out-of-pocket caps could range from $500 to $2,250.9

Clinician concern

On a provider level, incentives to reduce readmissions and limit health care–associated harm events mandated by the ACA may soon evaporate, throwing into question many quality metrics pursued by health systems. In response, will health system administrators abandon efforts to reduce readmissions and hospital-acquired conditions (HACs)? Or will health systems, despite the lack of a Medicare penalty “stick,” move forward with efforts to reduce readmissions and HACs? There’s no question of what would benefit the pocketbooks of our patients the most – every hospitalization results in significant direct out-of-pocket costs, not to mention lost productivity and income.10

It seems unlikely that a Republican-led government will pursue efforts to decrease out-of-pocket expenses. More likely, new proposals will aim to provide tax benefits to encourage use of health savings accounts (HSAs), continuing the shift of health care to employees.11 HSAs benefit employers, who pay less for the health care costs of employees, but are associated with worsened adherence to recommended treatments for patients.8,12

A 2016 study analyzed health care policies considered by Trump, including the following:

  • Full repeal of the ACA.
  • Repeal of the ACA plus tax deductions of health insurance premiums.
  • Repeal of the ACA plus block grants to states for Medicaid and Children’s Health Insurance Program (CHIP).
  • Repeal plus promotion of selling health insurance across state lines.

Not surprisingly, all four scenarios resulted in significant increases in out-of-pocket expenses for those in individual insurance plans.13

Although at the time of writing, the “replace” segment of “repeal-and-replace” is not known, Mr. Trump’s nominee for Secretary of Health and Human Services (HHS), Rep. Tom Price (R-Ga.), has given a hint of what he would champion based on his prior legislative proposals. Along with his support of increasing accessibility of armor-piercing bullets, reduced regulations on cigars, and opposition to expanding the State Children’s Health Insurance Program, he proposed H.R. 2300, “Empower Patients First Act.” This would eliminate the ACA’s Medicaid expansion and replace it with flat tax credits based on age, not income, which turns out to offer greater subsidies relative to income for those with higher incomes. A 30-year-old would, on average, face a premium bill of $2,532, along with a potential out-of-pocket liability of $7,000, with only a $1,200 credit to cover this from Mr. Price’s plan.14

In sum

So what’s a conscientious advocate for the physical and financial health of patients to do? Beyond political action, hospitalists need to keep abreast of the effect of changes in health care policy on their patients, as unpleasant as it may be. Do you know what the copays and out-of-pocket costs are for your patient’s (or your own) health care? Knowing how your recommendations for treatment and follow-up affect your patient’s pocketbook will not only help protect their finances, but will also protect their health, as people are less likely to be compliant with treatment if it involves out-of-pocket costs.

And easy as it would be to simply tune out the partisan rancor, stay engaged as a citizen, if for nothing else, the benefit of your patients.

Dr. Chang is pediatric editor of The Hospitalist. He is associate clinical professor of pediatrics at the University of Massachusetts, Worcester, and chief of pediatric hospital medicine at Baystate Children's Hospital, Springfield, Mass. Send comments and questions to Weijen.ChangMD@bhs.org.

References

1. Horton R. Offline: Looking forward to Donald Trump. The Lancet. 2016;388[10061]:2726.

2. Page L. What Donald Trump would do with the US healthcare system. BMJ. 2016;353:i2996.

3. Uberoi N, Finegold, K. and Gee, E. Health Insurance Coverage and the Affordable Care Act, 2010-2016. Department of Health and Human Services, ASPE Issue Brief, 2016 March 3.

4. Claxton G, Rae M, Long M, Damico A, Whitmore H, Foster G. Health Benefits In 2016: Family Premiums Rose Modestly, And Offer Rates Remained Stable. Health Aff (Millwood). 2016 Sep. doi: 10.1377/hlthaff.2016.0951.

5. Ku L, Broaddus M. Public and private health insurance: stacking up the costs. Health Aff (Millwood). 2008;27:w318-327.

6. Waters H, Steinhardt L, Oliver TR, Burton A, Milner S. The costs of non-insurance in Maryland. J Health Care Poor Underserved. 2007 Feb;18[1]:139-51.

7. Cheung MR. Lack of health insurance increases all cause and all cancer mortality in adults: an analysis of National Health and Nutrition Examination Survey (NHANES III) data. Asian Pac J Cancer Prev. 2013;14[4]:2259-63.

8. Gillis JZ, Yazdany J, Trupin L, et al. Medicaid and access to care among persons with systemic lupus erythematosus. Arthritis Rheum. 2007;57[4]:601-7.

9. Collins SR, Gunja M, Beutel S. How Will the Affordable Care Act’s Cost-Sharing Reductions Affect Consumers’ Out-of-Pocket Costs in 2016? Issue Brief (Commonw Fund) 2016;6:1-17.

10. Leader S, Yang H, DeVincenzo J, Jacobson P, Marcin JP, Murray DL. Time and out-of-pocket costs associated with respiratory syncytial virus hospitalization of infants. Value Health. 2003;6[2]:100-6.

11. Antos J CJ. The House Republicans’ Health Plan. Bethesda, MD: Health Affairs Blog, Project HOPE; 2016 June 22.

12. Fronstin P, Roebuck MC. Health care spending after adopting a full-replacement, high-deductible health plan with a health savings account: a five-year study. EBRI Issue Brief 2013 July:3-15.

13. Saltzman E EC. Donald Trump’s Health Care Reform Proposals: Anticipated Effects on Insurance Coverage, Out-of-Pocket Costs, and the Federal Deficit. The Commonwealth Fund September 2016.

14. Glied SA, Frank RG. Care for the Vulnerable vs. Cash for the Powerful – Trump’s Pick for HHS. N Engl J Med. 2017;376:103-5.

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