Health Care

Healthcare industry at odds over Senate proposal

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The Senate’s ObamaCare repeal bill has turned the U.S. healthcare industry against itself.

Hospitals and doctors have mobilized aggressively against the bill, sending letters to Republican Senate leaders and flooding Capitol Hill with lobbyists. Providers are primarily concerned about the $772 billion the bill would cut from Medicaid.

{mosads}The proposal includes deep cuts to Medicaid and would fundamentally reshape the program from an open-ended government commitment to a system of capped federal payments that limit spending.

On the other side of the debate are large insurers and their lobbying group, America’s Health Insurance Plans. The Senate bill has some policies the insurers like: $140 billion in tax cuts and $50 billion over the first four years to stabilize ObamaCare’s insurance markets. The bill also contains more than $60 billion to help insurers cover high-cost patients.

Anthem was one of the first insurers to endorse the Senate bill.

“We believe the Senate discussion draft will markedly improve the stability of the individual market and moderate premium increases” because it appropriates billions of dollars in short-term funding to shore up the exchanges, provides cost-sharing reduction funds and eliminates a tax on health insurance plans, Anthem said in a statement.

The BlueCross BlueShield Association also endorsed the stabilization funds in the bill.

“We are encouraged that the draft Senate legislation funds cost-sharing reductions, which help those who need it most with out-of-pocket costs, so they can access care,” the group said. “The state stability and innovation program will also go a long way in helping to cover the costs of caring for those with significant medical needs.”

Some Senate Republicans were quick to seize on the industry’s support. But others, like Sen. Rand Paul (R-Ky.), decried the bill’s “bailouts” to the insurance industry and demanded the legislation be changed.  

The divide within the medical community over the healthcare bill is a striking departure from the debate over the Affordable Care Act (ACA).

Seeking to neutralize industry opposition, the Obama administration sought to bring payers and providers together in support of the Democratic legislation — and largely succeeded.

All the major players made sacrifices, but they all got something in return. Hospitals and doctors were able to decrease their uncompensated care, while insurers gained access to a larger population of customers who could buy coverage with a government subsidy.

But the debate over the Senate’s Better Care Reconciliation Act has shattered that detente within the industry.

“Although they are at loggerheads now, payers and providers had made progress under the ACA,” said Andrew Selesnick, an attorney at the law firm Buchalter in Los Angeles. “There are always going to be divergent views and always tensions that exist [between payers and providers], but this new bill just exacerbates it.”

Selesnick said the divisions between payers and providers “significantly decreases” the changes of success for the bill. “People in the industry have a much different view” of healthcare than Republicans, he said.

Jeff Myers, president and CEO of Medicaid Health Plans of America, said he’s not surprised there are such divisions among the healthcare sector. He said the limitations of the reconciliation process, which Republicans are using to pass the bill, makes it almost impossible to make sure the needs of every industry are addressed.

“Reconciliation makes that kumbaya moment very hard,” Myers said, because under reconciliation, changes have to be budget neutral.

“While everyone was giving up something [during the ObamaCare debate], there was some value in the creation of new opportunities. But they’re not passing out candy here,” Myers said.

The insurers don’t necessarily like the Medicaid cuts in the Republican bill, but on balance, their plans would benefit more from the tax cuts and the market stabilization money the legislation would provide.

Hospitals and doctors, on the other hand, have been campaigning vocally against the legislation.

The opposition from hospitals has been particularly strong. ObamaCare resulted in millions of people gaining insurance coverage, and the Senate bill would undo a lot of those gains. Hospitals still have to treat people, even if they don’t have coverage, so those reductions in uncompensated care would likely disappear. 

When the bill was introduced, the American Hospital Association (AHA) urged senators to “go back to the drawing board.”

“From the onset of this debate, America’s hospitals and health systems have been guided by a set of key principles that would protect coverage for Americans,” AHA President and CEO Rick Pollack said in a statement.

In an interview on C-SPAN last week, Pollack took a veiled swipe at the insurance industry.

“Some sectors of the healthcare field have different types of concerns, because a lot of their concerns have to do on the tax side, and [they] want to see different types of taxes repealed,” Pollack said.

The American Medical Association (AMA) said the bill would violate medicine’s “do no harm” principle.

“Medicine has long operated under the precept of Primum non nocere, or ‘first, do no harm.’ The draft legislation violates that standard on many levels,” AMA Executive Vice President and CEO James Madara said.

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