Changes in Healthcare - After the Big Surprise #NextUpforACA

After the initial Shock & Awe, the emotions change to Worry!! We do not know much about the Trump Healthcare policy except that it will be GREAT. The Uncertainty and Unknown is bound to cause some anxiety.

But this is not new for those of us in healthcare. We are used to constant change, be it positive or negative, driven by regulation or innovation. Think back to the passage of HIPAA and the numerous changes to the implementation timeline, or the ACA and the changes that came after the regulations were finalized or ICD-10 and the numerous timeline changes after many were ready and some who never were. In the end we are used to adapting to the changes that come our way.

Given control of the White house, senate and house, it is clear that the GOP agenda of “Repeal and Replace” will take shape in some form #NextUpforACA. However, the practical reality is that they are unlikely to impact coverage for 2017 that will be active by the inauguration. The earliest possible change is likely to be for 2018 effective dates (Assuming they will look for the earliest date to make good on their campaign promise). The current speculation is that the Trump Healthcare policy will likely be based on the Speakers – A Better Way – Healthcare - Policy paper. When you take away the partisan rhetoric and Obamacare bashing in there here is a cheat sheet of the major principles within the policy paper and the fundamental changes from ACA

GOP Platform vs. ACA

For Medicare and Medicaid, most of the changes are not proposed in the short term. There will be atleast 2 years for the suggested changes to be planned and implemented.

As the comparison indicates, the changes between the proposals are largely variations of similar concepts and if made holistically will amount to minor disruption.   

Major cost issues not addressed:

The missing piece though is that none of the changes address the major challenges in Obamacare and its implementation that have allowed costs to continue rising significantly and resulted in significant losses for Insurers leading them to stop offering individual coverage:

-      Post regulation changes that allowed pre-ACA plans to remain active created a dysfunctional risk pool. Healthier people kept leaner pre-ACA policies, while sicker individuals jumped onto better coverage. The concept of full flexibility in benefit design without any minimum requirements will make this problem worse

-      Risk adjustment programs – The defunding of the risk corridor and reinsurance programs required during the transition period coupled with a faulty risk adjustment program drove substantial losses. Insurers have faced 2-3 years of losses. Competition will thrive in a market where the economics work to everyone’s advantage. Without a viable economic model, the increase in competition is unlikely.

-      Lack of any provisions to control price escalation by pharma allowed significant price increases directly impacting premiums.

Looking Ahead

The key goals of Obamacare or the GOP Healthcare Reform proposal is the same – “Provide Access to Quality Healthcare at a Reasonable cost and build a system that can sustain over the long haul”. Insurers and Providers share the same objectives. If we can all align on what we want for our society and focus on common-sense regulations (for plans, providers and the population) that balance the economic realities important to everyone, we will be successful. The foundational concepts being similar should simplify the implementation so long as we can align on doing what is right.

Change is HARD and particularly emotional in the highly charged environment we are in. Lets focus on the common goals and we can make the change effective without the anxiety!!