Here's what the White House can do to dismantle Obamacare even if Congress doesn't go along

http://www.cnbc.com/2017/03/17/heres-what-hhss-tom-price-can-do-to-dis
BYBertha Coombs
Friday, 17 Mar 2017 | 5:33 PM ET
Nicholas Kamm | AFP | Getty Images

As chairman of the House Budget Committee, Tom Price spent the last seven years trying to muscle through a repeal of Obamacare. Now, as Health and Human Services Secretary, that health-reform law, the Affordable Care Act, may give Price a lot of the leeway he needs to roll back its regulations.

"There are 1,442 citations in #ACA where it says "The Secretary shall…" or "The Secretary may…" @HHSGov, we'll look at every single one," Price noted in a tweet Friday.

What the secretary could do

Health policy analysts say the ACA gives the secretary the most discretion when it comes to enforcing reporting regulations for insurers, hospitals and physicians, in particular.

"Some of the paperwork requirements and data collection that have been layered on people over the last seven years, I wouldn't be at all surprised if that got eased up," said James Capretta, a resident fellow and Milton Friedman Chair of the American Enterprise Institute. "It could make it easier for providers to change, adapt and cut their costs."

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Price could also provide businesses with regulatory relief when it comes to Obamacare fees and taxes. The Obama administration initially delayed the health insurer tax on premiums that's built into the law to fund subsidies. The implementation of the employer mandate was also delayed, while the so-called Cadillac excise tax on high-cost plans was pushed back more than once.

"The employer mandate was delayed quite a bit by the Obama administration, and made much (weaker) than people anticipated. They could do that even more from the perspective of the Trump administration," said Capretta.

Already, Price has proposed stricter enrollment rules to prevent people from abusing Obamacare plan protections, by incurring high medical costs and then failing to pay their premiums.

The move was in direct response to what health insurers have been asking for to help stabilize the individual market.

What the secretary can't do

However, when it comes to giving insurers more flexibility over the types of plans that they can offer in order to bring down premium costs, the Trump administration's hands are tied without a repeal of the legislation.

One of the key things critics point to in the ACA is the requirement that every plan include 10 essential health benefits, among them free preventive care, mental health and pregnancy coverage.

"It says that the essential health benefits have to be very similar to a typical employer plan," said Craig Garthwaite, a professor at Northwestern University's Kellogg School of Management. "Most employer plans don't differ that much on health benefits. To the extent that they do, it's really on the margins."

Insurers have also argued that if they can charge older enrollees up to five times more than younger people, they can make premiums more attractive to young adults. But the ACA limits so-called age band rating so they can only charge older enrollees three times more.

"I don't see a way to purely through the regulatory process really do a lot to bring down premiums," Garthwaite said.

What the secretary must do

Price has already used his regulatory discretion to extend the deadline for health insurers to submit rate plans for 2018 until June. But insurers say the administration needs to do more to secure the individual market next year.

An Anthem executive said CEO Joseph Swedish told President Donald Trump and Secretary Price in a private meeting this week that he welcomed the rollback on taxes and fees the administration is proposing, but also pushed to maintain some Obamacare measures.

"We'd like to see… cost-sharing subsides continue, that the Medicaid is appropriately funded," said John Gallina, Anthem chief financial officer at the Barclays Capital health conference this week. "And we feel very good, very encouraged by the fact that the president and his team are listening and actually making change based on feedback that the industry is providing."

During the Obama administration, Republicans in Congress sued to block Obamacare cost-sharing subsidies that help low-income exchange enrollees pay for out-of-pocket costs. Their federal lawsuit has been put on hold, but is still pending.

Insurers say removing those cost-sharing subsidies before a transition to a new system will immediately destabilize the market, because enrollees will likely drop their plans.

"What really needs to happen is providing a stable environment for insurance carriers and consumers," said Sarah Collins, vice president for health-care coverage and access at the Commonwealth Fund. "Part of that is… to resolve the suit over the cost-sharing reduction payments."

Collins also said that financial stabilization mechanisms are also key for maintaining the individual market.

The ACA provided three programs that were intended to help offset insurers' losses on high-cost enrollees in the first three years of Obamacare, but Republicans also fought funding for those programs.

"The premium stabilizers… turned out not to be what the insurers thought," she explained, because they were paid only a fraction of what was expected. "That had a major effect on small insurers in particular."

Some insurers have sued the government in order to recover the funds they say were promised under the law's so-called risk adjustment program. If the Trump administration chooses to settle the claims, some policy analysts think it could buy some good will with insurers to keep them in the market next year.

"It would depend a lot on whether they could get the risk adjustment to work," said health policy Professor Laurence Baker, senior fellow at the Stanford Institute for Economic Policy Research. "They might be able to do that, but that would be a new frontier for everybody to figure out how to do that... and are plans prepared to buy into it?"

But politically, that's not likely to happen any time soon, while the GOP repeal plan vote hangs in the balance.

"It's possible the administration could say, you know what, 'you're right. You should have been paid for this'," American Enterprise's Capretta said. "That would run counter to some of the rhetoric of the last seven years, so hard to do that."

"We should pay them," in order to insure the future of the individual market, said the Kellogg School's Garthwaite.

"If I'm worried about one thing broadly, it's whether the insurers are going to be willing to trust the regulatory process, going forward," he said "Any replacement we try to come up with demands that private insurers be there to try to provide health insurance. At a certain point, they're not going to come back."

And there's no law requiring insurers to provide coverage in the individual market.

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