This week, in their “Future of the Affordable Care Act” series on our Employment Matters blog, my colleagues Alden Bianchi and Edward Lenz provided an analysis of the major provisions of the American Health Care Act (“AHCA”).

Introduced on March 6, 2017, the AHCA is the first concrete legislative proposal detailing the initial provisions designed to repeal and replace the Affordable Care Act. As Alden and Ed discuss, the bill currently is the subject of widespread media scrutiny and intense criticism. The bill is not final and will likely face numerous changes, including the last minute proposals changes of the past 48 hours. The March 6th version offers an outline of Republican priorities in the regulation of health and health care financing, which include a strong bias in favor of market-based solutions and aversion to most (but not all) government intervention in the health care markets.

Check out their full analysis on The Future of the Affordable Care Act Week 7: The American Health Care Act, here.

My colleagues at ML Strategies also have been following the AHCA closely. In particular Katie Weider and Rodney Whitlock have been analyzing potential changes to the Medicaid program under the AHCA. Some highlights include the following:

  • The bill changes the structure of Medicaid financing from the Federal Medical Assistance Percentages (“FMAP”) system, to a per capita cap system. For a detailed explanation as to the impact of this approach to funding, see their post on The Walking Dead in Medicaid.
  • The AHCA also changes the structure of some Medicaid supplemental payments. Supplemental payments pay providers above what they receive for an individual service through Medicaid provider rates, but there is limited transparency and data available on supplemental payments. Katie and Rodney see states’ reactions to the AHCA as an opportunity to learn more about supplemental payments generally. Check out their post, Medicaid Supplemental Payments under The American Health Care Act.
  • They also dive deeper into the impact on Provider Payments Under a Medicaid Per Capita Cap. In a February 24th blog post, they described Medicaid block grants and per capita caps in terms of A x B = C to demonstrate how those payment policies work. ‘A’ is the amount a state is paid per beneficiary, ‘B’ is the number of beneficiaries in a given state, and ‘C’ is the total state payment from the federal government. In response to questions raised by numerous providers, they discussed the nuts and bolts of how a per capita cap, the current Medicaid financing structure in the proposed AHCA would work. In short, for the Medicaid provider, how they are paid would change very little, while the amount they are paid might change a lot. As we have noted before, Republicans have been talking about remodeling the Medicaid program through block grants or per capita caps for years. The AHCA provides us a detailed look into how they propose to do this.

We will be monitoring on-going Congressional activity related to the AHCA and will continue to provide insights and analysis on the future of the AHCA moving forward.