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THE FUTURE OF What changes will November’s election bring?

Next month, Americans will be casting challenges, some going all the way to the U.S. their votes for a new president and many Supreme Court. With a new leader in the White members of Congress, which will likely House and the potential for a change in control result in new health care policies for of one or both chambers of Congress, what will the country. President ’s be the future of health care in America?

ISSUE BRIEF signature health care legislation, the (ACA—also known as Obamacare), has been in place since 2010 Three Health Reform and has largely been implemented over Proposals the past six years. The law has resulted Democratic presidential candidate Hillary in widespread changes to health care in Clinton has pledged to defend and expand on America, resulting in nearly 13 million fewer the ACA, while Republican candidate Donald adults (age 18–64) without health Trump has stated his intent to repeal the ACA if since 2013, widespread innovation and he becomes the next president. Within the past experimentation in the delivery of health few months, both of the candidates and House care, and upheaval and uncertainty in the regulation of and the Republicans have released plans laying out their insurance markets. priorities for health care reform for 2017 and beyond. A review of these plans makes it clear Since its enactment, some Republican that regardless of who is in control of the White members of Congress have attempted to House and Congress beginning in 2017, health repeal the law more than 50 times, and care and policy in the will continue the law has been subject to multiple legal to evolve. The future is anything but certain. OCTOBER

2016 KHI/16-11 In March 2016, while running for Clinton has stated she intends the Republican nomination, Trump to “strengthen, improve and released a brief, seven-point health build on” the ACA but has care reform plan to: also released her own nine- point health care plan, entitled • Repeal Obamacare and eliminate the individual Universal, Quality, Affordable Health Care for mandate; Everyone. In her plan, she proposes to: • Allow insurance companies to sell health insurance across state lines; • Defend and expand the ACA;

• Allow individuals to fully deduct their health insurance • Bring down out-of-pocket costs, such as premium payments from their taxes; copays and deductibles for consumers;

• Encourage and support the use of health savings • Reduce the cost of prescription drugs; accounts by individuals to cover some health care • Protect consumers from unjustified costs; prescription drug price increases; • Require price transparency from all health care • Incentivize states to expand ; providers, including doctors and hospitals; • Expand access to affordable health care to • Make block grants to states for their Medicaid families, regardless of immigration status; programs; and

• Remove barriers to entry into the U.S. drug market for • Expand access to rural Americans by overseas companies. exploring ways to make more health care providers eligible for telehealth reimbursement under and other Republican Members of the programs; U.S. House of Representatives • Ensure that all women have access to A few months later, on June 22, 2016, Speaker of the reproductive health care; and House announced the release of the proposed replacement plan for the ACA developed by House • Double funding for centers Republicans (the “GOP Plan”). The 37-page report, entitled and expand the health care workforce. , Our Vision For A Confident America, Health Care, is built on five key principles: The Affordable Care Act • Repealing Obamacare; As noted above, both Trump and House • Providing all Americans with more choices, lower Republicans have stated that repealing the costs, and greater flexibility through greater ACA is their first priority. Trump has specifically competition among health insurance companies; emphasized elimination of the , a key part of the ACA and the subject of one of • Protecting the nation’s most vulnerable citizens, the legal challenges that was addressed by the U.S. including individuals with pre-existing health Supreme Court in 2012. conditions and low-income families; Clinton has pledged to defend and expand • Spurring innovation in health care by building on the the ACA, and is promoting the creation of a 21st Century Cures Act passed by the House in 2015, “public-option” insurance plan, a concept she which supports advancements in medical cures and has supported since 2008. A public-option plan treatments; and would be a government-run insurance plan that • Protecting and preserving Medicare by financially would offer coverage through the ACA’s online strengthening the program and slowly phasing in marketplaces, in direct competition with private improvements for future generations. insurers.

2 October 2016 The Future of Health Care Reform Prescription Drug Costs but have not yet enrolled, and will work to make enrollment in both Medicaid and ACA coverage To address the rising cost of prescription drugs, both easier. Clinton and Trump are proposing to allow consumers to import prescription drugs for their personal use Clinton also wants to expand access for rural from foreign nations that have safety and quality Americans by making more health care providers standards similar to the U.S. eligible for reimbursement for telehealth services under Medicare and other programs, including Clinton is also proposing to allow Medicare to federally qualified health centers (FQHCs) and rural demand higher rebates and negotiate drug prices health clinics. with drug companies, require pharmaceutical companies that benefit from federal support to invest a “sufficient amount of their revenue in research Medicare and development,” and clear out the Food and Drug Administration’s (FDA) backlog of generic drug House Republicans are proposing a number of approvals, reducing exclusivity periods for biologic changes to Medicare. Assuming a repeal of the ACA, drugs, and expediting review of applications for certain changes in federal payments to Medicare biosimilar drugs. She also proposes to create a federal Advantage (MA) plans (the private alternative to oversight group that would be charged with reviewing traditional Medicare) would be reversed to their pre- proposed price increases for existing drugs and ACA status, both the Independent Payment Advisory imposing penalties for unjustified price increases. Board and the Center for Medicare & Medicaid Innovation would be eliminated, and the ban on expansion of physician-owned hospitals would be Coverage and Access for Vulnerable lifted. Populations The GOP Plan also recommends giving MA insurers For individuals who are unable to afford insurance more flexibility to create value-based plans, reducing coverage, Trump is proposing that individuals be or phasing-out first dollar coverage in Medicare allowed to fully deduct the amount of their monthly supplement (Medigap) policies beginning in 2020, health insurance premiums from their taxes. He has and combining Medicare Parts A and B to create a also stated that the country needs to look at Medicaid unified, single deductible and 20 percent uniform program options and work with states to ensure that cost-sharing requirement. It also includes repealing individuals who want coverage can have it. the fiscal year 2018 and 2019 disproportionate Clinton has stated she will work with governors to share hospital (DSH) cuts (also the 2018–2020 expand Medicaid in every state and also expand Medicaid DSH cuts); creating a new Medicare access to health care for families, regardless of their Compare website to post reports comparing MA and immigration status, by allowing them to purchase traditional fee-for-service (FFS) Medicare on a core health insurance on the ACA marketplaces. She also set of quality measures, and gradually increasing proposes to launch a national campaign to enroll the Medicare retirement age beginning in 2020 to people in ACA coverage who are already eligible correspond to the eligibility age for Social Security.

Both Hillary Clinton and Donald Trump propose allowing consumers to import prescription drugs from foreign countries that have similar quality and safety standards as the U.S.

The Future of Health Care Reform October 2016 3 Finally, beginning in 2024, House Republicans in the enhanced match rate for the expansion propose to convert the Medicare system to a population but would be able to spend the funds competitive, market-based model, in which seniors across populations. The Children’s Health Insurance would be given a choice of private plans on a Program (CHIP) match rate would return to its pre- Medicare Exchange to compete with the traditional ACA levels. FFS program, and would be provided with premium support payments to pay for or offset the premium This option would account for changes in a state’s of the plan chosen, depending on the plan’s cost. volume and mix of Medicaid beneficiaries, and is similar to one of the Medicaid reform approaches Clinton is opposed to the GOP Plan to privatize outlined by Governor in 2011 Medicare but is proposing to expand the Medicare in correspondence with then-Health and Human program by allowing people age 55 and older to opt Services Secretary . It also shares in, while protecting the traditional program. similarities with an approach President proposed in the mid-1990s as an alternative to a Medicaid block grant formula then favored by the Republican Congress. Trump has proposed that federal funding for Medicaid be provided in the form of block grants to Under the block grant approach outlined in the GOP states to operate their programs. Similarly, the House Plan, states that opt out of per capita allotment Republican plan includes a description of two options funding could automatically receive a block grant for funding Medicaid: a “per capita allotment” or a to fund their Medicaid program. The block grant block grant. approach would assume that states will transition individuals currently enrolled under the ACA Under the per capita allotment approach, beginning in 2019, a federal Medicaid allotment would be expansion rules into other sources of coverage. By available for each state to draw down. The amount of providing broad state authority in eligibility and a state’s allotment would be calculated based on the benefits for non-disabled, non-elderly adults and state’s per capita costs for the four major beneficiary children, the need for waivers would be eliminated categories—aged, blind, and disabled, children and and states could keep or modify existing waivers adults—times the number of enrollees in each of without further approval from HHS. States would those four categories. In the GOP Plan, Medicaid have broad discretion to spend the funds, although expansion would no longer be an option for states they would have to provide required services that have not yet expanded, and states that have to elderly and disabled individuals described as already expanded would see a gradual reduction mandatory populations under current law.

Under the proposed GOP Plan, Medicaid expansion would no longer be an option for states that have not yet expanded. States that have expanded would see a gradual reduction of the match rate for the expansion population, but would be able to spend the funds across populations.

4 October 2016 The Future of Health Care Reform The GOP Plan also would allow states to adopt The GOP Plan also includes a number of other work or education and training requirements proposals related to health insurance, including: for non-disabled Medicaid enrollees and to use Medicaid dollars to provide defined-contribution Tax treatment for employer-sponsored insurance. There benefits in the form of premium assistance or a would be a cap on the dollar amount that individuals limited benefit to enrollees who are working or are allowed to exclude from their gross income for the preparing for work. States would be allowed to set value of their employer-sponsored insurance, rather “reasonable and enforceable” premiums for non- than allowing the full value to be excluded as is currently disabled adults and could require these individuals permitted. to use premium assistance without a requirement Expanded opportunities for risk pooling. Small businesses for wrap-around services. States could also use would be allowed to band together to offer plans, known these dollars to help offset cost-sharing in an as association health plans (AHPs), so small businesses employer plan. could negotiate with health insurers for lower prices and Clinton would maintain the existing federal funding health plans that do not contain the benefits required by structure for Medicaid, but has stated she will also their state’s laws. Individuals would be allowed to come offer incentives, such as allowing states to receive together to purchase coverage through individual health a 100 percent federal match for their expansion pools (IHPs) that would operate similar to AHPs. population for the first three years of expansion, Many states have existing laws regarding the operation regardless of when a state chooses to expand. The of AHPs in the state, which may be impacted by any ACA only authorized the 100 percent match for federal AHP legislation. In Kansas, there are very few calendar years 2014–2016. Clinton would also work association health plans currently operating, and it is not with governors to expand Medicaid in every state, clear what the impact would be on the state’s insurance and invest $500 million per year on a campaign to market if large numbers of small businesses chose to facilitate enrollment of eligible individuals into both offer AHPs and were permitted to offer products that do Medicaid and marketplace coverage. not comply with the mandated benefits required under state law.

Health Insurance Market Self-insurance by employers. This provision would Both political parties have proposed changes to maintain current federal law that allows employers the health insurance markets across the country to to self-insure their employees, along with the use of address the cost of health insurance and to increase stop-loss insurance, including ensuring that stop-loss competition. insurance is not defined as “group health insurance,” which could make it subject to additional federal or A public option. In addition to maintaining the ACA, state regulation. Self-insured plans are currently subject Clinton has proposed the creation of a “public- to federal regulation as Employee Retirement Income option” health plan that would compete with plans Security Act (ERISA) benefit plans but are not subject to offered by private insurers on the ACA’s online state insurance regulation. insurance marketplaces. Purchase of health insurance across state lines. Both Expanding Coverage Options and Trump and House Republicans are proposing to Protecting Consumers modify existing laws that prohibit the sale of health insurance across state lines. Trump, House Republicans and Clinton have all offered a number of proposals aimed at expanding health insurance To date, five states have enacted legislation coverage options for Americans and protecting individuals allowing insurers authorized in other states to issue using health insurance to access care. policies in their states. Critics, including consumer advocates, argue that states effectively would Health Savings Accounts (HSAs). Both Trump and House lose their ability to regulate their own insurance Republicans promote the use of HSAs to pay for certain markets and that consumers may not benefit from medical expenses. Trump has proposed allowing HSAs to purchasing plans sold from out-of-state insurers accumulate and become a part of an individual’s estate, who may have fewer local providers in their which could be passed to heirs with no tax penalty, and networks. used by any family member without penalty.

The Future of Health Care Reform October 2016 5 House Republicans are proposing to increase Sandy Praeger, speaking on behalf of the National the maximum contribution to an HSA. The GOP Association of Insurance Commissioners, Plan also supports expansion of the use of health recommended that Congress adopt the five-to-one reimbursement accounts (HRAs), funded by ratio to maintain reasonable premium costs for young employers, which employees could use to purchase adults. individual coverage. State innovation grants and other funding. The GOP A health care “backpack.” In addition to HSAs and Plan would provide at least $25 billion for grants to HRAs, the GOP Plan proposes the creation of a states that develop innovative health plans and an health care “backpack” that would include a monthly additional $25 billion for states to operate high-risk universal, advanceable, refundable tax credit, pools. adjusted for age, that could be used to help pay for a typical “pre-ACA health plan” or to pay for other Prior to the enactment of the ACA, most states, health care expenses, such as over-the-counter including Kansas, operated state high-risk pools for medication or dental and vision care. individuals who were unable to obtain coverage in the private insurance market due to health status or cost. Although the Kansas high-risk pool ceased operation in 2014, the legislation that established the Kansas high-risk pool, K.S.A. 40-2117, et seq., was not repealed and could be used to re-establish the state’s high-risk pool.

Consumer protection. Clinton has also introduced proposals to expand coverage and address the cost of health care, including:

• A provision that would require health insurance companies to place a monthly limit of $250 on covered out-of-pocket prescription drug costs for individuals. The cap would only apply to prescriptions covered by insurance that are specifically approved by the FDA for the treated condition; and

Provide for a one-time open enrollment period. • Federal regulation of “unjustified” health Unlike the current annual open enrollment period insurance premium increases, including established by the ACA, the GOP Plan would give authorizing the Secretary of Health and Human uninsured individuals one opportunity to enroll in Services to block or modify unreasonable health insurance, regardless of their health status. health insurance premium rate increases in If they chose to enroll later, they would not receive states that do not have such authority. the pre-existing conditions exclusion protection and could be subject to higher insurance costs. The GOP Plan also contains a number of recommendations specifically intended to protect Set the default age-rating ratio at five-to-one. This consumers and ensure that they can obtain and GOP Plan provision would allow insurance companies maintain continuous coverage. A number of these to set health insurance premiums at levels that would recommendations are currently required under the limit the cost of an older individual’s premiums to ACA, including: no more than five times what a young person pays. States would have the ability to narrow or expand • Prohibiting insurance companies from using the ratio at their discretion. pre-existing condition exclusions as a basis for denying coverage to consumers based on health Under the ACA, the age-rating ratio is currently status; set at three-to-one, which has resulted in higher premiums for young adults. Prior to passage of • Allowing young adults up to age 26 to stay on the ACA, former Kansas insurance commissioner their parents’ health plans;

6 October 2016 The Future of Health Care Reform • Prohibiting insurers from putting lifetime employers and insurers to provide more information limits on benefits in health plans provided to to consumers about out-of-pocket costs, provider individuals; and networks, drug costs and other elements of health insurance. • Prohibiting insurers from unfairly rescinding (voiding or canceling) a consumer’s health plan, especially in cases where the consumer Other Health Reform Issues becomes sick. Medical liability. The GOP Plan includes a proposal to Family glitch. Clinton proposes to fix what is referred enact medical liability reform by placing caps or limits to as the “family glitch” in the ACA, where some low- on the amount of “non-economic damages,” such as to-moderate-income families are unable to receive pain and suffering, emotional distress, and loss of financial assistance to purchase coverage through companionship, which can be awarded to plaintiffs the marketplaces in cases where a family may have in medical malpractice cases. States would also be access to employer-sponsored insurance (ESI). Under encouraged to find ways to reduce frivolous lawsuits the ACA, if the ESI coverage is “affordable,” based and the practice of defensive medicine by pursuing a solely on the cost of covering the employee (and variety of options, including: not the cost of covering the employee’s spouse or dependents), then the remaining family members • Using a collateral source rule to prohibit cannot qualify for tax credits to reduce the cost of patients from suing for damages that were paid coverage through the marketplace, even if the family by a health insurer; and cannot otherwise afford coverage. She also proposes to increase premium tax credits available through the • Authorizing health courts, where judges—not marketplaces so that individuals and families pay no juries—hear testimony, determine liability and more than 8.5 percent of their household income on set the amount of damages to be awarded to health insurance premiums. the plaintiff. Under Kansas law, awards for non-economic Cost Transparency damages are capped at $300,000, scaling up to $350,000 by 2022. The collateral source rule in Both Trump and Clinton propose requiring health Kansas does not prohibit patients from suing for care providers to provide more price transparency damages based on the medical bills actually charged for consumers about the cost of medical procedures. by health care providers, but providers are permitted In addition, Clinton would also require both to present evidence to a jury that the charges

Budget Graphic to come from Kari. (NOTE: This is from the 2016 Legislative Preview and needs edited.) The GOP Plan would encourage states to find ways to reduce frivolous lawsuits and the practice of defensive medicine.

The Future of Health Care Reform October 2016 7 were reduced or adjusted based on contractual and outpatient treatment. She also recommends a agreements with an insurance company, which a jury requirement for licensed prescribers to participate in can consider when awarding damages. training on controlled medications and to consult a prescription drug monitoring program before writing Kansas law, K.S.A. 65-4901, also provides for the prescriptions for these medications. She plans to use of malpractice screening panels in medical direct the U.S. Attorney General to issue guidance malpractice cases, at the request of either party or on prioritizing treatment over incarceration for by order of the court. The members of a screening nonviolent and low-level federal drug offenders. panel are authorized to review the arguments of both parties and the claimant’s medical records to Trump recently outlined related policy proposals, determine whether the health care provider departed including expanding incentives for the use of drug from the standard of practice and submit a written courts and mandated treatment, ending Medicaid report that is admissible in any subsequent legal policies that obstruct substance abuse inpatient proceedings on the matter. treatment, and increasing first responder and caregiver access to naloxone, a medication used to Wellness programs. House Republicans propose to counter the effects of opioid overdose. ensure that employers are allowed to offer employee wellness programs tied to financial rewards or Autism. Clinton plans to conduct a nationwide early surcharges as long as the programs do not exceed screening outreach campaign to ensure that all the limits under current law, and clarify that offers children can get screened for autism and will push of financial incentives for employees meeting states to require health insurance coverage for certain health goals do not violate the Americans autism services in private health insurance. with Disabilities Act of 1990. Employee wellness programs would be permitted to gather “voluntarily Access to reproductive health care. Clinton has said collected” medical information from an employee’s she will work to ensure that all women have access to family members without violating the federal Genetic preventive care, affordable contraception, and safe Information Nondiscrimination Act of 2008. and legal abortion. Zika. Clinton plans to provide emergency funding for Workforce. Clinton is proposing to expand the health Zika and create a Public Health Rapid Response Fund care workforce by doubling the funding for primary to invest in public health preparedness and address care services at community health centers over the emerging disease threats like Zika. next decade, which involves extending the current funding provided in the ACA and expanding it by $40 billion over the next 10 years, and also tripling the Conclusion size of the National Health Service Corps. While the future of the ACA in its entirety is unclear, Mental health and substance abuse. Clinton has there may be some areas of agreement between proposed to help school districts and communities Republicans and Democrats that could have implement age-specific drug abuse education, peer bipartisan appeal and support. It is likely that health and mentorship programs and to increase funding for care policy in the U.S. will continue to evolve during Substance Abuse Prevention and Treatment Block the next four years and beyond, regardless of the Grants by 15 percent to expand access to inpatient outcome of the 2016 elections.

ABOUT THE ISSUE BRIEF This brief is based on work done by Linda J. Sheppard, J.D. It is available online at khi.org/policy/article/16-11.

KANSAS HEALTH INSTITUTE The Kansas Health Institute delivers credible information and research enabling policy leaders to make informed health policy decisions that enhance their effectiveness as champions for a healthier Kansas. The Kansas Health Institute is a nonprofit, nonpartisan health policy and research organization based in Topeka that was established in 1995 with a multiyear grant from the Kansas Health Foundation. Copyright© Kansas Health Institute 2016. Materials may be reprinted with written permission. Reference publication number KHI/16-11.

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OCTOBER 2016