Health Care Reform More Challenging Than It Seems

Health care reform discussed at Premier Inc’s 6th Annual Specialty Pharmacy Executive Retreat.

With the transfer of the government from Democrats to Republicans, substantial changes are inevitable. Since the government is responsible for approximately 50% of health care payments, their stake in implementing successful health care reform is critical to the prosperity of the new administration.

While the Affordable Care Act (ACA) brought some beneficial changes to the health care space, it has also failed to meet certain benchmarks, which is why Republicans have long sought to repeal the law. Prior to President Donald Trump taking office, GOP leaders made promises to repeal the ACA shortly after he took office.

Following the introduction of the ill-fated American Health Care Act (AHCA), GOP leaders were met with bipartisan criticism. The reality is that health care is a giant portion of what drives the US deficit and debt, which makes it a budgetary battle, according to Blair Childs, senior vice president, public affairs at Premier Inc, who discussed these issues at the session “Washington Update: Trump, ACA, Rx Pricing,” at the 6th Annual Specialty Pharmacy Executive Retreat.

A major divider among Republican lawmakers was the issue of Medicaid expansion, since many governors chose to expand their programs, and did not want to lose coverage gains and federal funding. This, in addition to other factors, may have been a major contributor to the defeat of the AHCA.

“It creates this incredible political friction for the Republicans,” Childs said during the session. “That’s why this has been so difficult.”

The main goal of the AHCA was to alter the current budget by repealing ACA provisions, including the individual mandate. If the law has passed, it would replace budgetary and timeline framework, according to the presentation. Device, insurance, and Cadillac taxes would also be repealed.

Had the AHCA or other legislation been passed, the next step would be to replace legislation through reconciliation, which could not be accomplished through the first step of budget reconciliation. This second step needs to gain bipartisanship, and may have presented lawmakers with another major challenge due to the rift between parties.

The final step to implementing healthcare legislation is President Trump issuing executive orders to roll back ACA regulations, according to the presentation.

However, the AHCA was pulled in the House at the last minute over concerns that the law would not receive enough Republican votes.

Conservatives criticized the bill primarily due to tax credits and Medicaid expansion, although other factors may have also been involved. While the AHCA would have cut subsidies and used only tax credits, conservatives felt this was creating another entitlement program. Even though funding for Medicaid expansion states would be cut in a few years, some GOP lawmakers felt this reform was not significant enough.

Trump has also made the case for speeding drug approvals, where there is currently a 4-year backlog on generic approvals, according to the presentation. This would also bring more biosimilars to the market faster. More biosimilars and generic drugs would promote competition and could lead to lower drug prices.

For the time being, GOP leaders have not made concerte plans to revise the bill to gain more support from their parties in the immediate future. However, Childs said during the presentation that if the bill fails, lawmakers may lose momentum for other reform.