Defeat of Health Care Freedom Act leaves uncertainty in its wake for healthcare industry

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For insurers, the mixed messages about what will happen next in the GOP's Affordable Care Act repeal efforts will only make it more difficult to decide on their individual market rates and participation for 2018. 

As Republicans licked their wounds and Democrats celebrated after an early-morning defeat of the Senate’s “skinny repeal” bill, the healthcare industry was left to once again grapple with uncertainty about what happens next.

The bill, called the Health Care Freedom Act, failed by just one vote after senators John McCain, R-Ariz., Susan Collins, R-Maine, and Lisa Murkowski, R-Alaska, voted against it. It would have repealed the Affordable Care Act’s individual mandate and temporarily removed its employer mandate, among other provisions—a much narrower focus than the two other ACA repeal bills that failed in the Senate earlier this week.

“While the amendment would have repealed some of Obamacare’s most burdensome regulations, it offered no replacement to actually reform our healthcare system and deliver affordable, quality healthcare to our citizens,” McCain said.

RELATED: Senate GOP's 'skinny repeal' fails after John McCain defects

“We must now return to the correct way of legislating and send the bill back to committee, hold hearings, receive input from both sides of aisle, heed the recommendations of nation’s governors and produce a bill that finally delivers affordable healthcare for the American people,” he added.

Watch McCain's dramatic "no" vote on the Senate floor, which was followed by gasps and brief applause:

Democratic leaders also called for bipartisanship. During a Friday press conference, House Minority Leader Nancy Pelosi heralded the fact that the ACA remains intact, but noted "we also know there are updates and improvements that we can make."

Thus, she called upon House Speaker Paul Ryan to go back to the chamber's committees to work on bipartisan solutions, and urged President Donald Trump to ensure the cost-sharing reduction (CSR) program is funded.

Trump, however, renewed his call to let the ACA fail after learning of the news that the GOP’s latest repeal effort had collapsed.

And a prominent conservative group backed up that stance, arguing lawmakers should not throw more taxpayer money at the “failing” healthcare law. 

“The only way to force senators back to the table is to block efforts to prop up Obamacare. After seven years of promises, Republicans cannot simply retreat to embracing the status quo,” said Heritage Action for America CEO Michael A. Needham. 

For his part, Health and Human Services Secretary Tom Price offered little details about what his department has planned. As it's charged with administering the healthcare law, HHS has considerable authority to undermine it, if it chooses.

“The Trump administration remains committed to improving our healthcare system so that it better serves the American people," Price said in a statement. "It is our goal to foster a successful, patient-centered healthcare system where Americans have more choices and lower costs, where patients, families and doctors are in charge of medical decisions, and where Washington’s interests take a backseat to patients’ needs.”

Individual market concerns top of mind 

For insurers, those mixed messages about what will happen next will only make it more difficult to decide on their individual market rates and participation plans for 2018. 

“We stand ready to continue to work with Congress and the administration on solutions to ensure that the American people have affordable, high-quality choices for their coverage and care,” said Kristine Grow, senior vice president of communications for America’s Health Insurance Plans (AHIP).

The major trade group, along with the Blue Cross Blue Shield Association (BCBSA), came out against the idea of a bill that primarily repeals the ACA individual mandate without replacing it. In its letter to Senate leaders Thursday, AHIP also warned that “the mid-August deadline for finalizing 2018 premiums is rapidly approaching, yet significant uncertainties remain.”

Insurers especially want more clarity about the CSR program, which the Trump administration has previously threatened to end since a judge has ruled the payments unconstitutional. Anthem said on its second-quarter earnings call this week that it would exit more ACA exchanges next year if market uncertainty continues—particularly surrounding CSRs.

Already, many insurers have requested steep rate hikes to hedge against the uncertainty, and could hike them up even more—or pull out of the exchanges entirely—if it continues.

“With open enrollment for 2018 coverage fast approaching, Blue Cross and Blue Shield members, and all Americans, need the certainty and security of knowing coverage will be available and affordable for them," Justine Handelman, senior vice president of policy and representation for the BCBSA, said in a statement Friday.

Added Alliance of Community Health Plans President and CEO Ceci Connelly: "ACHP stands ready to work with members of both parties to develop market-tested solutions to improve the health of our nation.”

The Kaiser Family Foundation’s Larry Levitt pointed out that while insurers’ profitability in the individual markets is improving, much depends on the actions of lawmakers and regulators.

One major provider group, meanwhile, also wants to see Congress and the Trump administration act to stabilize the marketplaces.

"While we are relieved that the Senate did not adopt legislation that would have harmed patients and critical safety net programs, the status quo is not acceptable,” said David O. Barbe, M.D., president of the American Medical Association. “We urge Congress to initiate a bipartisan effort to address shortcomings in the Affordable Care Act.”

Advocacy groups react to bill's failure

In an emailed statement, Andrea Miller, president of the National Institute for Reproductive Health, said the Senate’s failure to pass a “disastrous” healthcare is a temporary reprieve on attacks on women’s health. But she noted that the Senate proceedings “demonstrate how vulnerable our health and rights are at the federal level.”

Joe Baker, president of the Medicare Rights Center, hailed the defeat of the bill and echoed McCain's call for a return to regular order on healthcare overhaul efforts.

"Despite attempts to disguise the final product, 51 senators saw this bill for what it was—a cynical ploy to kick the can down the road again and pass responsibility back to the House," he said.

But the vote disappointed National Retail Federation, which said the ACA adversely influences staffing patterns, discourages full-time employment and drives up consumer prices. 

“It was very disappointing to come so close on even a limited bill, but we will use our disappointment to fuel our push on incremental improvements that will lead to a better healthcare law,” NRF Vice President for Health Care Policy Neil Trautwein said. 

Editor's note: This article has been updated to include additional comments from healthcare groups and the HHS.

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