Fate of Medicaid expansion is top of mind for providers in Trump healthcare plan, experts say

House Speaker Paul Ryan, R-Wisconsin, released the GOP’s A Better Way plan for ACA replacement prior to the election.

Insurers and payers are moving forward in a new world of healthcare uncertainty amid president-elect Donald Trump's promise to repeal and replace Obamacare.

After the election, the number one concern for providers is what happens with the Affordable Care Act's Medicaid expansion, according to Christopher Kerns, executive director, Research at Advisory Board.

Prior to Medicaid expansion, hospitals bore a greater portion of bad debt from patients who couldn't afford the services.

Providers are concerned they will have to shoulder more of the cost of care due to cuts in Medicare reimbursement, a decrease or elimination of subsidies for the exchanges, and the repeal of the individual and employer mandate, he said.

Insurers are also questioning the future of subsidies on the individual exchanges and what it all means for the viability of the plans they offer, Kerns said.

While Trump talks about a seamless transition between Obamacare and the GOP's A Better Way, or whatever plan replaces the ACA, insurers have yet to say whether they will continue to provide plans under Trump's proposal to take away coverage mandates while keeping the ACA policies of not denying coverage based on a pre-existing condition.

Actuaries have reportedly said that doing away with the mandates while ensuring coverage would lead insurers either to enact excessive premiums or go out of business.

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"I can't imagine it would be seamless," said Kim Buckey, vice president of client services at DirectPath. "Those are some of the more expensive provisions for insurers to implement. My understanding is that it would then require providers to provide coverage at community rates. Insurers are already losing money."

In a "60-Minute" interview Sunday night, Lesley Stahl asked Trump  if he would make sure that people with pre-conditions were still covered.

Trump told Stahl, " Yes. Because it happens to be one of the strongest assets."

Trump also wants to keep the provision that adult children living with their parents can remain covered under their parents' plans up to age of 26.

"(It) adds cost, but it's very much something we're going to try and keep," Trump said.

Then there's Trump's position to allow health insurance to be sold across state lines, which has been touted as a way to lower costs for consumers.

The move is allowed now in many states, and insurers are not taking advantage of it, according to Kerns. This is because insurers would also have to build a provider network in the new area.

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"We don't see a lot of companies big on the uptake," Kerns said. "If this does become nationwide we might see all of that. As of now, in states that allow it, we have not seen a huge interest."

Industry expert Richard Mayhew of balloon-juice.com told the Los Angeles Times that if a law was passed granting a national license to any insurer in any state, the state with the weakest regulatory structure would have 98 percent of the viable insurance companies headquartered there within nine months.

Low-regulation policies would allow insurers to cherry-pick healthier customers, leaving sicker patients at the mercy of in-state insurers who would charge them higher prices, Mayhew told the LA Times. In-state regulators wouldn't have jurisdiction over the out-of-state insurers.

A GOP led House, Senate and Executive Office is certain to move the $3 trillion a year healthcare industry away from the federal government towards private enterprise, state governments and consumers.

Trump is a proponent of high deductible health plans and health savings accounts that roll over to future years if not used, according to Buckey. But the bottom line is that consumers would bear more of the cost of their healthcare out-of-pocket.

House Speaker Paul Ryan, R-Wisconsin, who won a second term as Speaker on Tuesday, released the GOP's A Better Way plan for ACA replacement prior to the election.

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Ryan wants to privatize Medicare, experts say, providing a fixed dollar subsidy or tax credit that seniors would use to purchase insurance. Currently, Medicare pays a percentage of the cost.

Under Ryan's plan, Medicare would become a voucher program, Kerns said.

Consumers could turn to Medicare Advantage, the privately-run managed care plan already popular with both insurers and members. About a third of beneficiaries choose MA over the traditional fee-for-service Medicare and historically, the GOP favors expanding it, Kerns said.

Ryan wants to increase subsidies to MA plans and allow insurers to create their own packages of services and benefits instead of offering identical coverage, according to Forbes.

"Medicare Advantage is one lever to move beneficiaries to a private plan, but still use public dollars," Kerns said. "Medicare Advantage provides consumer choice in a defined contribution plan."

The future of the Centers for Medicare and Medicaid Services Innovation Center remains uncertain under the new administration. Some Republicans want to get rid of it, believing CMMI oversteps its authority as it takes power away from Congress to enact policy.

If CMMI is abolished, it plunges value-based initiatives for accountable care organizations into uncertainty, the all-payer models being run in Maryland and Vermont, and Pioneer and Next Generation models.

While these programs are being run through CMMI, if there is no tax implication, there is no way to eliminate them using budget reconciliation, according to Kerns.

"I've seen reports they're likely to remain intact," Kerns said. "They're part of statute, not part of CMMI."

However, he said, if CMMI is eliminated, there may be no infrastructure for such programs, he said.

Kerns remains optimist that whatever comes from a repeal and replacement plan to the ACA, providers and payers will adapt, as they did in 2010 with the enactment of Obamacare.

"What we've seen in the industry is a remarkable adaptability," Kerns said. "They've been able to adjust to changes in the marketplace. Yes, this is another shock, I have a lot of confidence that health systems and physicians can adapt to this."

"There's been a lot of head banging and conjecture," said Buckey,  who has more than 30 years of experience in healthcare. "No one has clear answers. Pretty much all we know is president- elect Trump is changing healthcare. What that actually looks like remains to be seen." 

Twitter: @SusanJMorse