On March 24, 2017, the Speaker of the Republican led House of Representatives, serving with a Republican President and Senate, pulled legislation to repeal the Patient Protection and Affordable Care of 2010, a/k/a, Obamacare or the “Affordable Care Act”, when he could not unify his Republican caucus behind a proposal, and two step process, designed to avoid a Democratic filibuster of the repeal in the U.S. Senate. The March 2017 attempt at unity failed when Republican moderates who sought to protect their constituents by retaining portions of the Affordable Care Act could not convince members of the right wing Republican “Freedom Caucus” to go along. Freedom Caucus members refused because they believed that the proposal did not contain provisions they deemed critical to a successful repeal, including the sale of insurance across state lines and price transparency for healthcare providers.
The irony, as many have noted, is that this failure occurred after the Republican House had voted over 60 times during the Obama administration to repeal Obamacare.
President Trump’s initial response to the legislative setback was to say that he would simply move on to other priorities. But shortly thereafter he claimed that a Republican healthcare deal would be “easy,” and under his leadership, Republican congressional leaders have expressed their commitment to unify behind an Obamacare repeal proposal that would succeed in passing the House and Senate.
Both the potential sale of health insurance across state lines and the imposition of price transparency on providers are deemed by many to be free market reforms to the healthcare marketplace. Neither is as simple as it would appear. Insurance, while marketed nationally is actually regulated on a state-by-state basis as to coverage requirements and cost. Indeed, even national providers of car insurance, such as GEICO, must be licensed by the insurance regulators of each state where they sell their insurance products. Moreover, insurers have not taken advantage of provisions within Obamacare that would enable them to sell insurance in a second state but would also require them to comply with such state’s regulations as to the insurance sold in that state. The Republican caucus supports a proposal that would allow for federal licensing of healthcare insurers rather than state licensing, which could potentially reduce the ability of smaller insurers to compete against large national insurers and remove the ability of states to regulate health insurance policies within their borders.
The proposal for pricing transparency also purports to enhance competition for medical services. However, physicians and hospitals do not compete on pricing alone but compete significantly on quality and other metrics, such as one provider’s substantial volume of patients requiring a procedure compared to another provider’s limited experience with the same procedure. Personal recommendations are essential to a patient’s identifying a provider, and a provider’s building of her practice. Organizations like the Leapfrog Group have developed quality dashboards regarding the performance of hospitals, states like New York have developed profiles of quality and enforcement information for hospitals, other entities, and physicians and even the federal government has hospital and nursing home comparative sites. Yet even these sites are limited as to the reported quality metrics and so information sought may not match information reported.
Accordingly, even assuming their passage, Republican attempts to modify the healthcare to incorporate what they believe are free market promoting ideas may not be successful in stabilizing and enhancing the health insurance market and may even further destabilize the provision of healthcare.
I, together with my colleagues Greg Smith, Esq., and Hayden Wool, Esq. (of the law firm Garfunkel Wild), have recently published a more in-depth discussion of these issues in the American Health Lawyers Association’s March issue of its Connections magazine, which I invite you to read.
