GOP senators, governors, rethinking American Health Care Act

Republican Senators are reportedly rethinking the American Health Care Act's elimination of the individual mandate and its provision to turn Medicaid into a state-run program.

Senate Finance Committee Chairman Orrin Hatch said Wednesday he is open to delaying the repeal of the individual mandate in the Affordable Care Act that requires consumers to have health insurance, according to The Hill.

Hatch told reporters he wouldn't mind postponing repeal of the mandate until after 2020, or even indefinitely. Other Republican senators reportedly agreed.

"I don't mind the individual mandate being expanded," Hatch said, according to The Hill. "But it all comes down to budgetary concerns and how it's going to be written."

The Congressional Budget Office is expected on Monday to release the cost estimate and effects of the American Health Care Act.

The AHCA, which narrowly passed the House, is now in the Senate, where it faces a more uphill battle.

[Also: Paul Ryan delays American Health Care Act vote amid mixed GOP support]

The bill would get rid of the individual mandate and Medicaid expansion. It would turn Medicaid from an entitlement program to one funded by federal block grants to states, capped based on the number of beneficiaries.

Some Senators are talking about maintaining the ACA's Medicaid expansion program, but subjecting it to spending limits, according to The New York Times.

The bill needs the votes of the 20 Republican Senators that come from states that have expanded Medicaid, the Times reported.

Reuters reported that about a dozen Republican governors, led by Gov. John Kasich of Ohio, are pushing their own proposal crafted in February. Their plan would also maintain Medicaid expansion while limiting spending for certain populations.

Legislators opposed to passage of the AHCA say it would leave millions of beneficiaries without health coverage.

The House debate focused on allowing states to get waivers to ACA provisions that mandated health insurers cover essential benefits and pre-existing conditions.

The American Health Care Act would allow states to get waivers for that coverage. States with waivers would set up federally-funded high-risk pools to help those with pre-existing conditions afford premiums. Under the AHCA, insurers would be able to increase premiums for consumers with pre-existing conditions and for older adults.

Consumers would be able to deduct the cost of their health insurance premiums from their taxes.

Under the GOP plan, a state can apply to Health and Human Services for a waiver that would be good for ten years, and then set up a high- risk pool.

The bill has $130 billion set aside for the risk pools, and other $8 billion in an amendment to cover people who let their coverage lapse, resulting in a 30 percent surcharge on their premiums for one year.

But it's not enough, said two healthcare experts.

[Also: GOP adds AHCA amendment to allow states to opt out of essential benefits, pre-existing conditions]

Either consumers will not be able to afford the coverage, or they will find that insurers will be unable to cover all conditions, said  healthcare attorney Eric Cheung, a partner at Ervin Cohen & Jessup LLP in Los Angeles.

"As a consequence in high risk pools, insurance becomes far too expensive for those who need it," said Cheung, who represent hospitals, medical groups and physicians.

Before the ACA, high-risk pools really weren't working for the states that had them, according to Sally Pipes, president and CEO of the Pacific Research Institute in San Francisco.

Maine has been held up as an example of a state that had a high-risk pool that worked, prior to enactment of the ACA.

In Maine, an individual with a costly condition was flagged for the risk pool, paid regular premiums and got regular  coverage, according to a report by Kaiser Health News.

[Also: House Republicans look to Maine's 'invisible high-risk pool' as model for future legislation]

Their medical bills were paid through a state nonprofit entity funded by the insurance premiums paid by consumers within the high-risk pool and a $4-a-month surcharge on all policyholders in the state.

The high-risk pools did keep costs down in the individual market, where Anthem was the largest insurer, according to the report. Without it, Anthem would have increased rates more than 20 percent rather than the less than 2 percent experienced in Maine.

But the program was better funded that what the federal bill would give states, said those interviewed.

In the United States, about six million of the 18 million people in the individual market have pre-existing conditions, according to Pipes. It's a small enough number to be a feasible program to fund, she said.

She believes many states will want to keep essential benefits and pre-existing condition coverage, and opt against getting a waiver.
"I would think a major state like California, New York, they don't want to get rid of the essential benefit plan," Pipes said. "It will be Obamacare as usual in California."

Pipes has been in healthcare since 1988, previously working in Canada, which has a government-run healthcare system.

"It doesn't work all at all," Pipes said.

The government spends 11 percent of its GDP on healthcare but the  demand is so much greater than the supply that the average wait time from seeing a primary care physician to specialist is five months, she said.

Twitter: @SusanJMorse