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Tuesday Mar 14, 2017

Repeal and Replace? A Look at American Health Care Act

"Every day is a winding road."

The long promised and much anticipated legislative effort to "repeal and replace" the Patient Protection and Affordable Care Act is underway. On March 6, House Republicans introduced the American Health Care Act (AHCA).

After a lengthy process, both the Ways & Means and Energy & Commerce committees approved the legislation on March 8 and 9, respectfully. The two committees considered more than 100 amendments, but no meaningful reforms were made to the proposal.

The next step in the legislative process calls for the House Budget Committee to compile the two committee bills into a single bill, approve it, and then send it for consideration by the full House of Representatives. We anticipate the Budget Committee will conduct its work this week, and the full House will consider it as early as the week of March 20.

The AAFP wrote letters to the Ways & Means  and Energy & Commerce committees on March 7. In our letters, we shared our evaluation of the AHCA based on the health care reform criteria we outlined in a Dec. 28 letter to House and Senate leadership. We laid out several recommendations and summarized our comments as follows:

"The AAFP has significant concerns with the AHCA as drafted and is deeply troubled by the negative impact it would have on individuals, families, and our health care system writ large."

Those concerns were underscored this week when the Congressional Budget Office estimated that the number of uninsured would increase by 24 million people by 2026 as a result of the proposal.

The following is a summary of the proposal divided into two categories, provisions in current law that are maintained and those that are altered or repealed.

Consumer Protections and Insurance Reforms -- The AHCA maintains consumer protections under current law that prohibits insurance companies from discriminating against individuals and families based on age, gender, race and socioeconomic status in their underwriting activities.

Pre-existing Conditions -- The proposal maintains provisions in current law that protect individuals from being discriminated against in coverage and benefit determinations based on their current or historical health status or health conditions.

Essential Health Benefits -- The proposal leaves the essential health benefits in place for all commercial insurance plans.  However, it is anticipated that the Trump Administration will attempt to repeal or modify the EHBs through the regulatory process.

Prevention Services -- The proposal maintains current law that requires all insurers (public and private) to provide preventive services and certain vaccines independent of patient cost-sharing.

Health Insurance Marketplaces -- The proposal maintains the Health Insurance Marketplaces, or exchanges as they are more commonly known. The presence of the exchange infrastructure will allow plans to be sold on the individual market and provide a framework for administering the tax credits created by the proposal.

Center for Medicare & Medicaid Innovation -- The proposal maintains CMMI. We anticipate that the Trump Administration will use its administrative authority to modify the CMMI scope of work, but we are pleased that CMMI will continue to provide a platform for delivery system and payment innovation.

Patient-Centered Outcomes Research Institute -- Similar to CMMI, PCORI survives the repeal effort -- at least for the time being.

Individual and Employer Mandates
-- The proposal does not repeal the mandates.  Instead, it rolls the penalties to $0, which is essentially the same as repealing them.

Premium and Cost-Sharing Subsidies -- The AHCA repeals ACA premium tax credits, cost-sharing subsidies and small-business tax credits, beginning Jan. 1, 2020. During interim period (2018-19), any excess tax credits will be recaptured, and use of tax credits expanded to some off-exchange coverage.

Tax Credits -- The proposal establishes a new system of advanceable tax credits to help individuals and families purchase health insurance, beginning Jan. 1, 2020. The tax credits will be available to all Americans, including qualified legal aliens, in the individual market. Tax credits range from $2,000 to $4,000 per year based on the age of the individual. Tax credits can be combined up to $14,000 per family. Individuals with incomes of $75,000 or less and families with joint income of $150,000 or less receive the full tax credit. The credits phase down gradually.   

Consumer Protections & Insurance Reforms -- The AHCA provides $100 billion to states to establish "high-risk pools" to assist high-need, high-cost patients with their health coverage costs. The proposal expands the "rating bands" from 3:1 to 5:1, thus allowing older people to be charged more for their insurance and repeals the ACA metal-level plans actuarial value standards, meaning there is no minimal value placed on the benefits that must be offered.

Continuous Coverage -- The AHCA replaces the individual mandate with a continuous coverage provision. Under this proposal, individuals who had a lapse in coverage greater than 63 days would face a 30 percent surcharge penalty on their premium for 12 months.

Medicaid -- The AHCA proposes substantial structural changes to the Medicaid program and its financing. First, it repeals the current option for states to cover adults above 133 percent of the federal poverty level, effective Dec. 31, 2019. Individuals currently enrolled under the Medicaid expansion remain eligible so long as they maintain continuous enrollment. The proposal repeals the enhanced match rate for newly eligible Medicaid beneficiaries on Dec. 31, 2019. The proposal repeals the essential health benefits (EHBs) for state Medicaid plans and requires states to re-determine eligibility for their expansion population every six months. Starting in 2020, Medicaid is transitioned to a per-capita financing model.

The proposal provides $10 billion over 5 years (2018-22) to non-expansion states for safety-net funding and enhanced provider payments and restores some of the previously reduced Medicaid disproportionate share payments to hospitals.

Health Savings Accounts -- The proposal expands the availability and role of Health Savings Accounts (HSA).  Effective Jan. 1, 2018, the proposal increases allowable contribution limits from $2,250 to $6,550 (self-only coverage) and $4,500 to $13,100 (family coverage). This allows HSA enrollees to use HSA dollars for all out-of-pocket expenses up to the limit of a high-deductible plan.

As the Sheryl Crow said, "Every day is a winding road." Please remember this is step one in a long legislative process. There are many miles left to travel. Please be assured that the AAFP will continue to advance recommendations that we believe would improve the proposal and our nation's health care system. I encourage you to engage with your legislators using our Speak Out  tool. Your voice is important.


How can you believe anything the government tells you. The last government projection was off by 50%. It is tainted by liberals and results are manipulated.

Posted by Edward McClendon on March 14, 2017 at 11:39 AM CDT #

A good and sensible summary of the proposed changes, thank you. What I find ironic is that those who supported this president the most (middle and low income) stand to lose the most and those who were least likely to support him (higher income) will be the least effected. And those whose income is over $250,000 for a family will get a tax break with the repeal of the 0.9% payroll tax and the 3.8% investment income tax.

Posted by William Santoro on March 14, 2017 at 12:39 PM CDT #

The overall gist of it is still free-market based and intra-state accountability. The pendulum swings between the service side (doctors, hospitals, pharmaceuticals, laboratories, nursing homes) and the insurance side (CMS, United Health, Kaiser - sort of). There were earlier attempts to unite both sides like Kaiser's all-in-one package but the massive M&A on the private side was too much. The end result of the M&A are transfers of ownership and power on the private side, and the reaction from which is to be seen. Meanwhile, I applaud the AAFP and all those in the trenches out there in doing what it takes to take care of the patients, despite an imperfect payment system that's unbalanced. At least in ideology, the medicine side of taking care of patients doesn't change very much from a day-to-day of "just doing my job to the best of my ability and capacity." To me that's speak to a very high level of professionalism as well.

Posted by Michael N., MD on March 14, 2017 at 12:42 PM CDT #

This bill, as well as other ACA alternatives thus far, fail to negate the spiraling premiums caused in turn by the spiraling costs due to the lack of true market dynamics between patients (consumers) and health care entities (doctors, hospitals, medications). Other key weakness of reform efforts thus far: without the individual mandate, you can't eliminate adverse selection (that is, pre-existing illnesses exclusions). Without adverse selection, your markets collapse. Yet we all know that adverse selection is dead on arrival. Thus, a conundrum exists.

Proposal: look at the individual mandate as a tax, which is what the Supreme Court said about the ACA 'mandate'; and thus levy a tax on the people who don't buy insurance. Justify this because of the likelihood they will require government assistance in the case of a catastrophic illness or emergency; and make sure the tax is not burdensome. But also make the minimal kind of insurance qualifying for the tax exemption (ie, previously called 'mandate') to be a truly catastrophic insurance plan, not a premium insurance product (ie, previously called 'ACA-certified' insurance plan); and make open enrollment periods for premium insurance products to be only every 3 to 5 years, not merely annually (which encourages people to wait until they get sick to enroll). Employers would have the option however of open enrollment with any new employee, just as always has been the case.

This approach gets rid of major weaknesses of the ACA - namely, specifying a premium insurance product as a mandatory baseline - while ensuring an equitable incentive to participate.

Market forces will ensure that drugs prices; imaging / lab / physician services; hospitalization costs; etc. will drop dramatically. The removal of insurance from the day-to-day operations of health care will seriously cut red tape and increase efficiency, further cutting cost and adding value. And, importantly, health insurance - and routine health care - would truly be affordable for all Americans.

Let the current, partisan-fraught House bill die its natural death; and let us work with those members of Congress who want to work with doctors on a bipartisan solution that is outside the box - and outside the beltway - but that would really work.

Posted by James Walker, MD on March 14, 2017 at 12:48 PM CDT #

This is a reform, not a repeal and replace. But, politically it sounds better to the conservative base to repeal and replace. And as usual, the elephant in the room is not being addressed. That would be cost. We currently have the most expensive health care per capita in the world and a lot of it is wasteful. We overpay for new drugs, hospitalization, imaging and procedures. It will take allowing Medicare to negotiate drug prices, a completely transparent(ala Amazon) cost listing and utility type regulation to lower costs.

Posted by Thomas G Smith on March 14, 2017 at 12:56 PM CDT #

1.The focus should be on reducing the paperwork burden that all FP'S have to deal with on a daily basis.
2. The prior authorizations have to stop for generic medications; I will not fill them out in the future.
3. I keep reading about the focus being on just the patients; I am an independent physician, it would be nice if some of the focus were on non-organized medical groups.
4. If I could get half my patients to pay 700 dollars per year, I would make more money than accepting insurance payments, and would save the patients money as well..

Posted by William Farr M.D. on March 14, 2017 at 01:04 PM CDT #

No offense but the AAFP despite member disapproval was a big, I mean BIG proponent of the ACA......

I don't trust the AAFP any more than I do the AMA's position on anything political.

If it wasn't for Board Certification I would have left the AAFP Just like i Left the AMA years ago.

Posted by Charles Bess on March 14, 2017 at 01:10 PM CDT #

I stand firmly with Dr. Charles Bess on this matter. Well stated, amigo.

Posted by Allan Spence on March 14, 2017 at 01:32 PM CDT #

Everyone focuses on the ACA bill. What about the HITECH Act signed into law 2/17/2009 which changed physicians lives forever? How much money has been spent on EHR's and do any studies analyse cost/benefit ratio's? Who introduced and supported the passage of this and how much have they received from EHR lobbyists? There is now "Big Health" just like "Big Oil" etc. physicians have to be able to Provide care. Primary care physicians want to actually see their patients and not spend time on the computer and/or manage extenders.

Posted by SharonB on March 14, 2017 at 01:35 PM CDT #

@Dr. Farr above, the prior authorizations and other purposely obstructive measures, as well as those intended to be more carrots than sticks, would largely disappear if we jettison mainstream 'premium' insurance in lieu of catastrophic plans, and have patients pay market prices for their drugs and tests and visits - except in truly catastrophic circumstances. It is time we call for this true health care reform option to be discussed.

Posted by James Walker, MD on March 14, 2017 at 01:51 PM CDT #

I also agree with Dr. Bess.

In addition to protection for patients, how about protection for physicians? Where's the TORT REFORM that physicians have been asking for for years, and has never been addressed by either side of Congress? And it appears the AAFP has forgotten about it also.

The AAFP is so concerned about patients, it forgets who pays its bills. Its members. They should be representing US. Patients have plenty of other groups fighting insurance/healthcare reform. We need new leadership in AAFP represent us, to make our specialty GREAT AGAIN.

Posted by Kim Merriman MD on March 14, 2017 at 02:18 PM CDT #

Thanks so much for the summary.What is really wrong with individual mandate for health insurance while we tolerate mandatory insurance for cars?.
Most industrialized countries,England,Germany,France and our neighbor Canada have SINGLE PAYOR system and they all have better health outcome than us here in the US with this complicated,never understood and problematic health Insurance system.It will be like MEDICARE FOR ALL.In a way we already have a single payor system for Medicare and Medicaid all we need to do is accommodate the say 30% to 40% of people that do not qualify for Medicare or Medicaid.

Posted by Christian Nwankwo MD,MPH,FAAFP on March 14, 2017 at 02:33 PM CDT #

I agree with Dr. Bess and Meriman. The AAFP stopped lobbying for its members and has sold out to the Democrat party. If it was not for the extortion to keep us as members I would have left long ago.

Posted by Paul Gettinger on March 14, 2017 at 02:38 PM CDT #

Excellent summary. Fairly presented. I appreciate that. Likely to be a big fight in the Senate.

Posted by Ken Brummel-Smith, MD on March 14, 2017 at 02:54 PM CDT #

I agree with Dr. Bess and Dr. Farr. I have just started to read these articles. I can not believe the lack of attention to the physicians who are really "In the Trenches". I have been in practice for 30 years and am dismayed number of FP's quitting private practice and going to shift work at urgent cares. Does the AAFP even care about the burnout rate of it's membership? Where is my lobbyist?

Posted by Sharon Bertroche MD on March 15, 2017 at 02:13 PM CDT #

I finally quit the AAFP after I realized that AAFP membership is not required to maintain board certification, which is done through the ABFM. Why give almost $800 per year to an organization that no longer represents my interests? I can track my CME using other means. I quit the AMA years ago for the same reason.

Posted by Michael Hilts on March 16, 2017 at 09:23 AM CDT #

In a given year half of patients between the ages of 20 and 55 are not seen by a doctor and generate no cost to the insurance plan. Yet their premiums paid by their employer cover the cost for the other half of patients that are seen and allow the insurance company their 12% profit margin. For the uninsured both Obamacare and the new ACA plan disproportionately cover those that have medical conditions and generate costs. There are not enough incentives or penalties to get the healthy half to purchase insurance. Insurance companies leaving Obamacare is due to that adverse selection. Any new system that does not generate enough premiums or get subsidized enough for the true costs will not be sustainable either. Eliminating coverage for tens of millions will reduce cost but at a political cost. This notion that everyone will be covered with lower cost, lower deductibles, better care, and allowing pre-existing conditions is intellectually dishonest. The actuaries will confirm that it is financially impossible.
Not an easy issue to be sure, but stop insulting our intelligence with false promises based on false premises.

Posted by Martin Scheidt MD on March 16, 2017 at 10:10 AM CDT #

Dr. Betroche asks: "Does the AAFP even care about the burnout rate of it's membership?"

In a word, no. They mention it very occasionally (who can forget the profound insight of "schedule more date nights?"), but in terms of actions that address the root causes - nothing, zippo, nada. To do so might ruffle a little plumage at CMS and the insurers, and that's the LAST thing our leadership wants to do.

Any organization that truly represents its membership would see a burnout rate of 60% and climbing as an existential crisis that takes priority over everything else. The AAFP yawns and returns to its preferred work of indoctrinating us into the box-checking and data collection inanities required by MACRA.

Posted by R Stuart on March 16, 2017 at 10:47 AM CDT #

Thank you to the Board and Dr Filer for standing up for liw income patients and clearly outlining the potential loss in access to care that will occur with the AHCA as it currently stands. We simply cannot cut costs and improve access with our current fragmented and unwieldy system, ACA or not. It is intolerable to imagine 24 million losing coverage. It is also unimaginable that we, as providers of care, will be able to stand the increasing time and energy spent on unnecessary administrative tasks that were meant to improve quality and save costs. Access to insurance, be it employer or government sponsored, does not equal access to needed preventive, acute and chronic care. When are we going to finally join the rest of the civilized world and adopt simpler and less costly nationalized health program. It would benefit both our patients and those of us who practice full scope of primary care. It's time folks!

Posted by Andrea DeSantis on March 16, 2017 at 01:29 PM CDT #

I find it very very ironic that we all stood around with our hands in our pockets when the first unintelligible disastrous bill came up. Passed after a "couple good old boy" midnight sessions and comments like "we'll figure out what is in it after we pass it" with nary a peep from the press or organized medicine about how much the "american People must know". Now we are picking this one to bits. Both will make us employees of the federal government in a few years and no one seems to care. Both are disasters for our patients. Medicare stringently hampers our ability to help the poor and these both are worse. I am glad I am nearing retirement.
Good luck all you young bucks and welcome to some politician telling you who to see and what you can do to take "care" of your patients (socialization). Too bad you have no experience with "private" practice.

Posted by Christian Madsen on March 16, 2017 at 09:18 PM CDT #

Over my 30 years of practice, I have owned my own practice, help start a physician led primary care group, transform it into a multi-specialty group, watch it emerge into a hospital/administration run practice and am now teaching residents at a Federally Funded Health Care Clinic. The only time which I could practice efficient high quality care to my standard was when I was in charge. I had great frustration with administrators trying to run clinics. They had no idea what we needed. Now I have even greater frustration with the Federally run clinic. We can't even get blood that was drawn for testing to the hospital lab. No one knows where it went. We have non- working computers and the solution is to take our best IT person and transfer him into the department entering data for MACRO/meaningful use. It is impossible to practice quality medicine in this environment. Those who want a single payor government run system may not have experienced the joy of being in a highly efficient quality practice.

Posted by Sharon Bertroche MD on March 18, 2017 at 10:35 AM CDT #

In reply to Dr. Bertroche:

"Those who want a single payor government run system may not have experienced the joy of being in a highly efficient quality practice."

I don't think it's a matter if "what if" currently. CMS/the government, at the current sticker price in healthcare, the economic inequality, the increasingly growing number of elderly patients becoming dependent with multiple chronic diseases, regardless of what type of system - free market or socialized, will PAY as if the country has no other choice, and we have tried a lot of them already. Call it what you will, a tax, a voucher, entitlements, the government is already paying a lot... and asking for more...

It's not who or how much we going have to pay, or even who else could afford the current sticker price in American healthcare if not the government.

The fight is how to allocate the US annual income (growing GDP) so as to be fair. We are a rich country, so the US healthcare system has many lives. It's not a doom situation.

I agree that a government system is not efficient, nor it is profitable (it's not designed to be so), but that's not why they are fighting right now, in my opinion.

The ACA started with a lot of smart people, mostly market, public policy theories, population medicine on paper and wishful thinking (a website that would automate administrative tasks with the level of satisfaction like Amazon).

ACA 2, or Trumpcare, will have more data coming back from the trenches. They are starting to even ask the questions "what can hurt the patient?" and "what doesn't deliver care and add more costs?" Prior to this, it was mostly good intention and high hopes.

More is to come, I'm sure... We all share the success stories, perhaps far and few in between, perhaps unique (indigent communities in Colorado). How we have been dealing with failures so far is pretty much like most mergers and acquisitions - take the best practices and get rid of the old ones and replace them with new people. It doesn't solve anything, but it at least will stop the failure, like a blood clot in your leg, to get worse and do real damage... The time to put on anticoagulant is now. The time to change it is now. By 2050, it'll be a dog fight if we don't resolve this issue logistically.

Personally I would like to see more acknowledgement of failures. It's one measurement of accountability. Failure is never a theory, and indifference is never a market solution.

Posted by Michael N., MD on March 19, 2017 at 01:36 PM CDT #

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About the Author

Shawn Martin, AAFP Senior Vice President of Advocacy, Practice Advancement and Policy.

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The opinions and views expressed here are those of the authors and do not necessarily represent or reflect the opinions and views of the American Academy of Family Physicians. This blog is not intended to provide medical, financial, or legal advice. All comments are moderated and will be removed if they violate our Terms of Use.