Repeal and Retain Plan Hits the News

No sooner did I complain that we were stuck waiting for detailed instructions, this week the US House of Representatives introduced two bills that when combined are being referred to as the American Health Care Act. I have received a high volume of email and hallway inquiries from staff asking me how this new plan will impact Peach Tree’s patients and reimbursement. Everyone is understandably concerned, so I will attempt to capture the highlights that are of particular interest to our patient population and health center services.

I think it is important to say that these bills are likely to experience a great deal of opposition from both sides of the political aisle and may not gather the votes needed to pass in its current form. The current proposal does not satisfy the conservatives that expected a total repeal of all things Obamacare. While there are many significant cuts from the current ACA plan, several other key provisions are barely changed and some are retained untouched. The Democrats are obviously upset that the vast majority of the suggested changes target cuts impacting Medicaid enrollees and the working poor, but provide the wealthy and business community with cost savings. Then there is the problem of having the American Health Care Act presented to us without a budget analysis of the likely fiscal impacts of these changes. Has anyone in Vegas set odds on the chance these bills will be approved by the Easter break?

When I review policy changes like this one, I read it through a Peach-colored lens. I want to know how will this plan impact Peach Tree patient and employees? Our current patient base is 75% Medi-Cal, so I zero in on all changes to Medicaid. Medicare is our next largest insurance payor, but this proposal does not suggest noteable changes to the current program. Out of the dozens of changes being proposed, here are the Medi-Cal highlights that will likely impact Peach Tree the most:

  • There is little or no change to the current federal funding to the states for Medicaid until fiscal year 2020. California will basically continue to receive federal matching funds for Medi-Cal enrollees at current levels for the next two-ish years.
  • The federal funding levels for years after FY 2020 will be capped based on the current FY 2016 Medi-Cal enrollee number.
  • States will be required to re-valuate Medi-Cal eligibility every six months.
  • Prohibits Medi-Cal funding to “prohibited entities” (aka Planned Parenthood) for one year. The funding will be reallocated to FQHCs.

The AHCA (what a difference an “H” makes!) largely does what the Republican leadership wanted to do; reduce costs, slow the growing federal deficit and end unpopular taxes and fees used to fund the ACA. The real pain of Medi-Cal reductions was creatively scheduled to occur in 2020, after the important mid-term elections for many swing state Republicans. So even if this plan is approved as-is, we will have a couple of years to prepare and strategize ways to adjust to the loss of insured patients and Medi-Cal reimbursement cuts that will follow.