Medicare and Medicaid could face dramatic change

Changes are around the corner now that a new president is at the helm, though it’s hard to sort out how the path to change or replace the Affordable Care Act (ACA)  will be effected. As of inauguration day, there were competing plans from Republicans, and few hints from the new president as to what he will actually propose. Thus far, he is saying his Health and Human Services (HHS) appointee must be confirmed before he’ll reveal details. That could happen in mid-February.

While President Trump said on the campaign trail that he wouldn’t touch Medicare, a statement on the transition team website referring to “modernizing Medicare” appeared and then disappeared. There are plenty of people around the new president who would like a complete overhaul of the program.

What could change?

The House Republicans published a healthcare reform proposal in June 2016. Trump’s nominee for HHS Secretary, U.S. Representative Tom Price (GA), published his own replacement plan in May 2015. Both plans have many of the same elements and may be what the president has in mind. Changes would most likely not take place until at least 2018. Here are some strong contenders for revisions to current policy:

  • Further delays or elimination of MACRA implementation
  • Incentives to allow Medicare beneficiaries to opt out and choose private plans
  • Caps on the government’s share of Medicare
  • Expansion of subsidies for Medicare Advantage managed care, which currently covers about one-third of seniors.

Future of Medicaid

According to the Kaiser Family Foundation, Medicaid and the related Children’s Health Insurance Program (CHIP) cover approximately 73 million Americans. In fiscal year 2015, the programs cost $509 billion with the federal government shouldering 62 percent of the bill.

Expanding Medicaid has been one of the emphases under the ACA. Since the ACA rollout, 31 states and the District of Columbia opted to expand their programs, with the federal government footing the bill for the first three years.

The incoming administration and congressional Republicans have been clear in their desire to limit the federal government’s financial responsibility in Medicaid and to give states more control.

Expansion, funding and CHIP eligibility

While continued expansions may not be possible if repeal occurs, there are state governors from both parties who want to keep the expansions they adopted in recent years and they have been vocal about this wish. Rollbacks of expansion are not likely to occur until the end of 2018 at the earliest, some experts say.

Possible changes include:

  • Block grant or per-capita allotments. States are given a fixed amount of money and they administer the program, which essentially caps federal spending on the program.
  • Changes to CHIP – This legislation is only funded until Sept. 31, 2017. Funding extension recommendations are due in a March 2017 report to Congress. Tightening of eligibility for this program is a possibility.

Much drama, many steps

Despite the drama that would surround any or all of these changes, media coverage leading up to the transition of power shows major differences of opinion among the influential and details to be worked out no matter what the new president and Congress do. The old adage about making sausage certainly applies. While some changes can be made immediately, the rest could well be debated for months before a clear picture emerges. A critical time is May 2017, when insurers must submit 2018 premium rates for approval. If too much uncertainty exists, the deadline could be extended or insurers might simply leave markets where it seems too uncertain to continue.

Providers and health systems will continue to need help navigating clinical and administrative complexities as the industry evolves. ABILITY can be a steady partner during a time of profound change and uncertainty. Check out our resources here.