Obamacare Replacement Bill is a Mixed Bag for Home Health

After much speculation and recently leaked drafts, the GOP’s health care plan has finally come out, drawing mixed reactions from home health stakeholders. A bill to replace the Affordable Care Act (ACA), or Obamacare, was released Monday to widespread excitement and critiques across both sides of partisan aisles.

The impact of The American Health Care Act—Republicans’ replacement for the ACA—on home care is not totally known, and no analysis on the cost of the bill has been conducted by the independent Congressional Budget Office (CBO).

Secretary of the Department of Health and Human Services (HHS) Tom Price called the bill a “work in progress” in a press conference Tuesday, and noted the bill could undergo changes ahead. At the same time, conservative groups have called the bill “Obamacare Lite.” President Trump on Tuesday tweeted that “phase 2 & 3” of the health care rollout will include more provisions.

The National Association for Home Care & Hospice (NAHC) has described the replacement bill as a “combination of positives, negatives and speculative impacts,” NAHC’s Vice President of Law Bill Dombi told HHCN. Until more analysis is done, potential impacts to home health care agencies are tough to nail down. Though, some positives and negatives of the bill are clear, and industry groups are taking issue with changes to Medicaid.

A Hit to Caregivers

One of the most significant impacts of the ACA on the home health industry was the ability of caregivers to secure health care coverage. Under the ACA, 500,000 direct care workers—including nursing assistants, home health aides and personal care aides—gained coverage, according to research from the Paraprofessional Healthcare Institute (PHI), a New York-based nonprofit organization that works to improve long-term services and supports for elderly populations.

“The House Republican plan to replace the Affordable Care Act raises deep concern for PHI… as well as for paid caregivers around the country and the people they serve,” PHI President Jodi M. Sturgeon said in a statement to HHCN.

Expanded coverage for caregivers was achieved largely through the expansion of Medicaid, a critical component of the ACA, PHI found.

Medicaid Changes Ahead

A key idea in Republicans’ outline for health care reform over the past several years has been to switch Medicaid financing to block granting for states. President Trump, along with Republican leaders such as House Speaker Paul Ryan (R-WI), have heavily stressed that block grants allow states more flexibility to take care of their most vulnerable patients.

The Republicans’ official plan includes per capita caps in Medicaid spending that will come into effect by 2020, and ultimately result in less funding for states over time.

The loss of Medicaid expansion has already caused ire among elected officials in states that have adopted it. The effect on home care could be huge: more than one-third of Medicaid spending goes toward supports and services in the home and community-based settings, according to PHI.

“Plans to cut Medicaid spending at the federal level will adversely affect these workers as well as their clients: older Americans and people with disabilities,” Sturgeon said. “Per capita caps on spending will reduce funding for long-term services and supports in home and community-based settings and across America’s nursing homes.”

Care to Beneficiaries

Medicaid changes stemming from the ACA have increased the number of patients that receive home health care services and expanded business for agencies in some states.

“Medicaid expansion in some states allowed more agencies to care for these new populations and beneficiaries to ensure appropriate, high-quality and low-cost health care,” Joy Cameron, vice president of policy and innovation at Visiting Nurse Associations of America (VNAA), told HHCN.

VNAA stated it will work to promote the role of home-based Medicaid and the need to prioritize it, Cameron told HHCN.

The impact of future caps could prove detrimental for states that expanded Medicaid under the ACA. However, the impact will vary state to state.

“The speculative part is the proposed shift of Medicaid to a per capita caps program,” Dombi said. “This would limit the amount of federal Medicaid payments to the state while increasing the state’s flexibility in structuring its Medicaid program benefits. That flexibility may favor or disfavor home care. At the same time, the payment cap will restrict the opportunity for home care benefit expansions. As such, the home care impact can vary widely between and among states.”

Rate Cuts to States

States that expanded Medicaid under the ACA also saw a 6% increase in matching payments from the federal government for home and community-based attendant service. The loss of this benefit could alter the ongoing shift across the health care system toward lower-cost settings that include home and community-based services.

“The negative impact in the draft bill is centered around the elimination of the 6% increase in federal Medicaid financial support for home care under the Community First Choice benefit that was created as part of the Affordable Care Act,” Dombi said.

Since the program became available, eight states adopted it—California, Connecticut, Maryland, Montana, New York, Oregon, Texas, and Washington—according to Dombi. Another five states—Arkansas, Alaska, Colorado, Minnesota, and Wisonsin—have submitted applications or are actively considering adopting the Community First Choice benefit program.

“This program was designed to encourage states to rebalance spending on long-term services and supports away from institutional care and toward home care,” Dombi said.

End of Mandates

One major change outlined in the first part of the repeal and replace plan that has been met with more cheerful reactions is the elimination of the individual and employer mandate.

“On the positive side, the bill would repeal the ACA employer mandate which has raised home care costs, particularly for companies providing Medicaid and private pay personal care,” Dombi said. “The problems created by that mandate have been compounded by the fact that no state Medicaid program has raised payment rates to cover this added costs.”

Instead of penalizing Americans who fail to enroll in a health insurance plan, the proposal allows private insurance companies to impose up to a 30% premium increase on individuals who allow their coverage to lapse. The incentive has been dubbed a “de facto”mandate penalty.

The American Health Care Act will head to the House of Representatives after clearing primary committees, including the House Ways and Means and Energy and Commerce, before heading to the Senate.

Written by Amy Baxter

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Amy Baxter
Assistant Editor at Home Health Care News
When not writing about all things home health, Amy fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."