Fight Over AHCA Just Getting Started, Leavitt Partners' Alspach Says

The former House healthcare expert said that changes are sure to come to the AHCA when the Senate takes up the bill, especially in the Medicaid provisions.

The drama of the House of Representatives’ passage of the American Health Care Act (AHCA) is only the start of what’s coming, according to a former House staff member who spoke at the 12th annual meeting of the Pharmacy Quality Alliance in Baltimore, Maryland.

“You’ve seen the sausage-making process,” said Clay Alspach, JD, a principal with Leavitt Partners. “Every day brings something new.”

Alspach’s perspective comes from his 7 years as chief health counsel to US Representative Fred Upton (R-Michigan) during his term as chair of the House Energy and Commerce Committee. In Thursday’s talk, Alspach said that because the AHCA uses the budget reconciliation process, Senate rules require that each piece have a direct effect on spending. This means the Senate parliamentarian could strip out key parts, including the controversial MacArthur amendment that was central to the bill’s success in the House.

That amendment, named for US Representative Tom MacArthur (R-New Jersey) would allow states to seek waivers from regulations of the Affordable Care Act (ACA), including requirements that plans offer essential health benefits, such as pregnancy and mental health care, and community rating, which protects people with preexisting conditions.

Besides the MacArthur amendment, Alspach expects the Senate parliamentarian to scrutinize the 30% surcharge imposed for a break in coverage, the repeal of the “metal levels” that indicate actuarial values of coverage, the change in the age bands from 3:1 to 5:1, and the shift from subsidies based on income and geography to tax credits based on age. Work requirements under Medicaid may get a look, too.

Republican senators in states with Medicaid expansion have deep concerns about eliminating benefits, and Alspach expects this will drive the debate. He compared the process to running around a baseball diamond, and said, “we’re just rounding first base.”

If that’s the case, however, some of the political blood shed to win over the conservatives in the Freedom caucus may have been wasted. MacArthur, for example, withstood a 5-hour onslaught from constituents at the most Democratic-leaning town in his district, with many questioners furious over the amendment.

Alspach said the US Senate will almost certainly produce a bill much different from the House version of the AHCA, and he expects US Senators Ted Cruz (R-Texas) and Mike Lee (R-Utah) to be key in wrangling votes from Freedom caucus members during the reconciliation process. This group can be “non-constructive,” he said, but the fact that they found a way to vote for the AHCA “frankly shows how powerful this issue is to the Republican base.”

Hours after Alspach spoke, Vox reported that there’s enough concern about the Senate parliamentarian canceling the MacArthur amendment that Lee wants to flip it on its head—instead of giving states the right to seek waivers to the ACA, the Senate bill would repeal the regulations and make states seek a waiver to put them back in.

Alspach said while the AHCA is consuming most of the “bandwidth” in Congress, there are other healthcare regulations and upcoming legislation to watch. Reauthorizations or extenders are needed for Medicaid, Medicare, the Children’s Health Insurance Plan, FDA user fees, and public health initiatives.

“These are really costly programs,” Alspach said. Normally, it would make sense for Republicans to use their control of the government to cut fees and costs, but with all the uncertainty over the AHCA, he’s not sure that will happen.

He does not think that HHS Secretary Tom Price, MD, will make substantial changes to the Medicare Access and CHIP Reauthorization Act (MACRA), and explained that although Price was a longtime critic of the Center for Medicare and Medicaid Innovation (CMMI), now that he oversees the agency, that may change. “When your position changes, sometimes your view changes, too,” Alspach said.

There’s been huge investment in CMMI—much of it from the private sector—and Alspach said alternative vehicles for running payment reform models are not mature enough to take CMMI’s place. The savings that CMMI is poised to deliver, which the Congressional Budget Office estimates at $34 billion over 10 years, “makes it difficult to repeal,” he said.

“It’s incredibly important to MACRA’s success,”

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