Trump scraps key Obamacare subsidies, urges Democrats to fix ‘broken mess’

Trump scraps key Obamacare subsidies, urges Democrats to fix 'broken mess'

By Yasmeen Abutaleb and Jeff Mason

WASHINGTON (Reuters) – U.S. President Donald Trump on Friday urged Democrats to make a healthcare deal after cutting off Obamacare subsidies to health insurance companies for low-income patients in a forceful move that sparked threats of legal action and concern of chaos in insurance markets.

“ObamaCare is a broken mess,” Trump tweeted early on Friday. “Piece by piece we will now begin the process of giving America the great HealthCare it deserves!”

The decision is the most dramatic action Trump has taken yet to weaken the Affordable Care Act, President Barack Obama’s signature healthcare law, which extended insurance to 20 million Americans.

The move drew swift condemnation from Democrats and threats from state attorneys general in New York and California to file lawsuits. Trump, a Republican, urged opponents to reach out to him.

“The Democrats ObamaCare is imploding. Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!” Trump said in another tweet on Friday.

Trump has been frustrated by Republicans’ failure to repeal and replace the law known as Obamacare, thwarting a promise he made during his successful 2016 presidential campaign.

His decision is likely to please those among his political base who detest the Obamacare system, which many Republicans have attacked for years as an unneeded government intrusion in Americans’ healthcare.

In a nod to that same constituency, the president signed an executive order earlier on Thursday to make it easier for Americans to buy bare-bones health insurance plans exempt from Obamacare requirements.

Senate Democratic Leader Chuck Schumer and House Democratic Leader Nancy Pelosi derided the subsidies cut-off in a joint statement, saying Trump would single-handedly push Americans’ healthcare premiums higher.

“It is a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America,” they said. “Make no mistake about it, Trump will try to blame the Affordable Care Act, but this will fall on his back and he will pay the price for it.”

Insurers and proponents of Obamacare have implored Trump for months to commit to making the payments, which are worth billions of dollars. Several insurers have cited uncertainty over the payments when hiking premiums for 2018 or exiting insurance markets altogether.

Healthcare stocks have edged lower in recent days. Ending the payments could hurt shares of insurers such as Anthem Inc, Molina Healthcare Inc, Cigna Corp and Centene Corp, which are offering plans on Obamacare markets for 2018.

Trump has made the payments, guaranteed to insurers under Obamacare to help lower out-of-pocket medical expenses for low-income consumers, each month since taking office in January. But he has repeatedly threatened to cut them off and disparaged them as a “bailout” for insurance companies.

For Kathryn Haydon and her husband, who bought insurance under the law’s marketplace three years ago as struggling college students in Arkansas, the subsidies reduced the cost of their $310 plan by about $250, leaving them to pay $60 each month.

“If the subsidy was not there, we would have gone without health insurance,” she said. “Our finances were extremely tight at the time for us… we would have just hoped there were no catastrophes.”


The White House said late on Thursday that it could not lawfully pay the subsidies anymore.

A White House statement said that based on guidance from the Justice Department, “the Department of Health and Human Services has concluded that there is no appropriation for cost-sharing reduction payments to insurance companies under Obamacare.”

“In light of this analysis, the Government cannot lawfully make the cost-sharing reduction payments,” it said.

New York Attorney General Eric T. Schneiderman said in a statement he was prepared to lead other attorneys general in a lawsuit.

“I will not allow President Trump to once again use New York families as political pawns in his dangerous, partisan campaign to eviscerate the Affordable Care Act at any cost,” he wrote.

The payments are the subject of a lawsuit brought by House Republicans against the Obama administration that alleged they were unlawful because they needed to be appropriated by Congress. A judge for the federal district court for the District of Columbia ruled in favor of the Republicans, and the Obama administration appealed the ruling.

The Trump administration took over the lawsuit and had delayed deciding whether to continue the Obama administration’s appeal or terminate the subsidies, but in April Trump began threatening to stop the payments.

That case became more complicated in August when a U.S. appeals court allowed 16 Democratic state attorneys general to defend the payments and have a say in the legal fight.

The political turbulence has affected insurers’ decisions.

Anthem Inc, one of the largest remaining Obamacare insurers, in August scaled back its offerings in Nevada and Georgia and blamed the moves in part on uncertainty over the payments.

Blue Cross and Blue Shield of North Carolina earlier this year raised premiums by more than 20 percent, but said it would have only raised premiums by about 9 percent if Trump agreed to fund the payments.

The nonpartisan Congressional Budget Office estimated that cutting off the payments would cause premiums to rise 20 percent in 2018, and that 5 percent of Americans would live in areas that do not have an insurer in the individual market in 2018.

Trump has taken other steps to undermine Obamacare. Last week, his administration allowed businesses and non-profit organizations to seek exemptions from Obamacare’s mandate that employers provide birth control in health insurance with no co-payment.

The administration also slashed the Obamacare advertising and outreach budget and halved the open enrollment period.

(Additional reporting by Steve Holland, Brendan O’Brien and Susan Heavey and; Editing by Michael Perry and Bernadette Baum)

One more Republican defection would doom Senate healthcare bill

Senate Majority Leader Mitch McConnell speaks with reporters about the Senate health care bill on Capitol Hill in Washington, U.S., July 13, 2017. REUTERS/Aaron P. Bernstein

By Susan Cornwell and David Alexander

WASHINGTON (Reuters) – President Donald Trump turned up the heat on Friday on fellow Republicans in the U.S. Senate to pass a bill dismantling the Obamacare law, but with their retooled healthcare plan drawing fire within the party even one more defection would doom it.

Majority Leader Mitch McConnell has planned for a vote next week on revised legislation, unveiled on Thursday, and he has his work cut out for him in the coming days to get the 50 “yes” votes needed for passage. Republicans control the Senate by a 52-48 margin and cannot afford to lose more than two from within their ranks because of united Democratic opposition, but two Republican senators already have declared opposition.

“After all of these years of suffering thru Obamacare, Republican Senators must come through as they have promised,” Trump, who made gutting Obamacare one of his central campaign promises last year, wrote on Twitter from Paris, where he attended Bastille Day celebrations.

The top U.S. doctors’ group, the American Medical Association, on Friday called the new bill inadequate and said more bipartisan collaboration is needed in the months ahead to improve the delivery and financing of healthcare. Hospital and medical advocacy groups also have criticized the bill.

“The revised bill does not address the key concerns of physicians and patients regarding proposed Medicaid cuts and inadequate subsidies that will result in millions of Americans losing health insurance coverage,” AMA President Dr. David Barbe said, referring to the government insurance program for the poor and disabled.

A major test for McConnell’s legislation expected early next week is an analysis by the nonpartisan Congressional Budget Office, which last month forecast that the prior version of the bill would have resulted in 22 million Americans losing insurance over the next decade.

A day after that CBO analysis was issued, McConnell postponed a planned vote on the legislation because of a revolt within his own party, including moderates and hard-line conservatives.

While the bill’s prospects may look precarious, the same could have been said of healthcare legislation that ultimately was passed by the House of Representatives. Republican House Speaker Paul Ryan called off a vote in March in the face of a rebellion involving the disparate factions of the party but managed to coax enough lawmakers to back it and engineered narrow approval on May 4.


Vice President Mike Pence sought to shore up support among the nation’s governors at a meeting in Rhode Island, but a key Republican governor, Ohio’s John Kasich, came out strongly against the revised bill, saying its Medicaid cuts were too deep and it does too little to stabilize the insurance market.

Kasich’s opposition could put pressure on Rob Portman, a Republican senator from Ohio, who has not yet taken a position on the bill.

If the current Senate legislation collapses, some lawmakers have raised the possibility of seeking bipartisan legislation to fix parts of Obamacare but leaving intact the structure of the Affordable Care Act, Democratic former President Barack Obama’s signature legislative achievement, commonly known as Obamacare.

“There are changes that need to be made to the law,” Dick Durbin, the No. 2 Senate Democrat, told MSNBC, citing “a bipartisan appetite to tackle this issue.”

Moderate Susan Collins and conservative Rand Paul already oppose the revised Senate bill. Other Republican senators have either expressed concern or remained noncommittal, including Portman, Mike Lee, Shelley Moore Capito, John McCain, Dean Heller, John Hoeven, Lisa Murkowski, Jeff Flake, Ben Sasse, Cory Gardner, Todd Young and Thom Tillis. Republican Senators Lindsey Graham and Bill Cassidy floated an alternative plan.

The new version was crafted to satisfy the Republican Party’s various elements, including moderates worried about Americans who would be left without medical coverage and hard-line conservatives who demand less government regulation of health insurance.

A provision championed by Republican Senator Ted Cruz and aimed at attracting conservatives would let insurers sell cheap, bare-bones insurance policies that would not have to cover broad benefits mandated under Obamacare.

But two major health insurance groups, America’s Health Insurance Plans and the Blue Cross Blue Shield Association, called on McConnell to drop the Cruz proposal, saying it would undermine protections for pre-existing medical conditions, raise insurance premiums and destabilize the individual insurance market.

The bill retained certain Obamacare taxes on the wealthy that the earlier version would have eliminated, a step moderates could embrace. But it kept the core of the earlier bill, including ending the expansion of Medicaid that was instrumental in enabling Obamacare to expand coverage to 20 million people, and restructuring that social safety-net program.

John Thune, a member of the Senate Republican leadership, said in order to complete work on the bill by the end of next week, Senate leaders would have to try to formally begin debate on Tuesday or Wednesday, a move that requires a majority vote.

(Reporting by Susan Cornwell and David Alexander; Writing by Will Dunham; Editing by Bernadette Baum and Jonathan Oatis)

Senate may vote on revised healthcare bill next week

Senate Majority Leader Senator Mitch McConnell (R-KY) attends a new conference following party policy lunch meeting at the U.S. Capitol in Washington, U.S. July 11, 2017. REUTERS/Carlos Barria

By Yasmeen Abutaleb and Susan Cornwell

WASHINGTON (Reuters) – U.S. Senate Republicans said Tuesday they will seek to bring their healthcare overhaul to the Senate floor next week after a lengthy intraparty struggle, but it remained unclear whether they had the votes to pass the measure or even what form it would finally take.

With his reputation as a master strategist on the line, Senate Majority Leader Mitch McConnell laid out a timetable for Senate consideration of legislation to fulfill President Donald Trump’s campaign promise to dismantle the 2010 Affordable Care Act, also known as Obamacare.

In a departure from Republican orthodoxy on tax-cutting, the legislation likely will retain some of the taxes that were imposed on the wealthy under Obamacare, Senate sources said.

But it was unknown whether a revised version of the bill to be announced on Thursday morning can satisfy both moderates and hard-line conservatives in the Republican majority who voiced opposition to a draft unveiled last month on very different grounds.

With Trump urging the Senate to act before taking the August break, McConnell pushed back the Senate’s planned August recess by two weeks to allow senators more time to tackle the measure that would repeal key parts of Obamacare, as well as pursue other legislative priorities.

McConnell’s announcement drove a turn-around in stock prices in afternoon trading on Wall Street after an earlier sell-off, on hopes that a shortened recess could mean progress on the stalled Republican legislative agenda.

A dark mood lingered among some Republicans over the healthcare subject, with party leaders appearing to act because of the need to dispense with healthcare and turn to other issues, among them increasing the U.S. debt ceiling.

“I think we’ve narrowed down now to where we know where the decision points are, and we just have to make those decisions,” Senator John Thune, a junior member of the Republican leadership, told reporters. Leaders were still trying to “figure out how we get to 50” votes, he said.

Republicans, who hold 52 seats in the 100-seat Senate, would need 50 votes to pass the bill, with Vice President Mike Pence providing the tie-breaking vote.

“I am very pessimistic” about the prospects for Republican healthcare legislation, Chuck Grassley, a senior senator, told Fox News on Tuesday. Another Republican senator, Lindsey Graham, was working on his own healthcare proposal and will unveil it this week, a Graham aide said.


McConnell said the plan was to vote on the healthcare bill next week, and said he hoped to have a fresh analysis of the bill from the nonpartisan Congressional Budget Office at the start of the week. He did not reveal any of the planned changes to the draft, on which he postponed action last month after it failed to gather enough support.

But Senate sources said it is likely that two Obamacare taxes on the wealthy will be kept in place – a 3.8 percent net investment tax and a 0.9 percent payroll tax that helps finance Medicare – which would appeal to moderates who have balked at the prospect of cutting taxes for the wealthy while reducing benefits for the poor.

“Obviously that’s the direction I think that a lot of our members want to move, is to keep some of those (taxes) in place and be able to use those revenues to put it into other places in the bill,” Thune said, while stressing that no decisions were final.

Republicans could also retain Obamacare’s limit on corporate tax deductions for executive pay in the health insurance industry, one Senate source said.

It was unclear whether the bill would include a proposal by conservative Republican Ted Cruz that would allow insurers to offer basic low-cost healthcare plans that do not comply with Obamacare regulations.

Cruz argues it would help to lower premiums, but critics say it would allow insurers to offer skimpier plans that may not cover essential health benefits while also charging more for more comprehensive, Obamacare-compliant plans.

The Senate Republican healthcare bill unveiled last month would phase out the Obamacare expansion of Medicaid health insurance for the poor and disabled, sharply cut federal Medicaid spending beginning in 2025, repeal many of Obamacare’s taxes, end a penalty on individuals who do not obtain insurance and overhaul Obamacare’s subsidies to help people buy insurance with tax credits.

Democrats are united in opposition to the bill and at least 10 Republicans have said they oppose the existing draft. The House of Representatives passed its own version in May.

Moderate Republicans are uneasy about the millions of people forecast to lose their medical insurance under the draft legislation, and hard-line conservatives say it leaves too much of Obamacare intact.

Democrats call the Republican legislation a giveaway to the rich that would hurt the most vulnerable Americans.

(Additional reporting by David Morgan and Amanda Becker; Writing by Susan Cornwell and Tom Brown; Editing by Mary Milliken and Leslie Adler)

Democrats protest Senate Republican healthcare secrecy

FILE PHOTO - U.S. President Donald Trump (C) turns to House Speaker Paul Ryan (3rdL) as he gathers with Congressional Republicans in the Rose Garden of the White House after the House of Representatives approved the American Healthcare Act, to repeal major parts of Obamacare and replace it with the Republican healthcare plan, in Washington, U.S., May 4, 2017. REUTERS/Carlos Barria

By Susan Cornwell

WASHINGTON (Reuters) – U.S. Democrats took to the Senate floor on Monday to throw a spotlight on behind-the-scenes efforts by the Republican majority to repeal former President Barack Obama’s healthcare law, known as Obamacare.

In a series of floor motions, inquiries and lengthy speeches, Democrats criticized the closed-door meetings that Republicans have been holding to craft a replacement for Obamacare, formally known as the Affordable Care Act. They called for open committee hearings and more time to consider the bill before a Senate vote, which Republicans say could come in the next two weeks, although a draft bill has yet to emerge publicly.

Lacking the votes to derail or change the Republican process, the maneuvers by the Democratic minority seemed more aimed at highlighting Republican efforts on a controversial issue. Polls have said that a majority of Americans disapprove of the Obamacare replacement that has passed the House of Representatives and that Senate Republicans are now considering.

Senate Democratic Leader Chuck Schumer said that the closed-door Republican meetings on healthcare amounted to “the most glaring departure from normal legislative procedure that I have ever seen.”

“Republicans are writing their healthcare bill under the cover of darkness because they are ashamed of it,” Schumer charged. The resulting legislation would likely throw millions out of health insurance, he said, while granting “a big fat tax break for the wealthiest among us.”

Senators are not obligated to hold meetings in the open, but Democrats pointed out that there were lengthy committee meetings and many days of floor debate on Obamacare before it passed in 2010.

Several Democrats moved for the healthcare legislation to be referred to Senate committees for hearings, but Senate Majority Leader Mitch McConnell refused.

McConnell said all Republican senators have been involved to some degree in healthcare meetings and that Democrats would have a chance to amend the legislation they produce, once it is brought to the Senate floor.

“We’re going to have a meeting on the Senate floor, all hundred of us, with an unlimited amendment process,” McConnell said. “So there will be no failure of opportunity.”

Senate Republican leaders would like a vote on healthcare legislation in July, before the July 4 recess if possible. But Republicans have struggled to coalesce around a bill, with moderates and conservatives pushing in different directions.

Senate Republicans also face pressure from the right. In the House, conservatives have written to McConnell to express concern about reports that say the Senate may water down the House bill.

(Reporting by Susan Cornwell; Editing by Jonathan Oatis and Leslie Adler)

California to give health clinics $20 million to counter possible Trump cuts

FILE PHOTO: Demonstrators protest over the repeal and replacement of Obamacare outside the offices of Republican congressman Darryl Issa in Vista, California, U.S., March 7, 2017. REUTERS/Mike Blake

By Lisa Lambert

WASHINGTON (Reuters) – California on Monday will announce plans to award $20 million in emergency grants to local health and Planned Parenthood clinics in anticipation of possible U.S. healthcare funding cuts, according to State Treasurer John Chiang’s office.

California and more than a dozen other Democratic-leaning states are fighting against regulatory changes and policies coming from Republican President Donald Trump and the Republican-controlled Congress.

The grants are intended to buy time for state lawmakers to address potential shortfalls caused by federal attempts to undo the Affordable Health Care Act, commonly called Obamacare, and to eliminate funding for women’s health and for contraception, the state said.

A California financing program will provide money for the grants, said Treasurer spokesman Marc Lifsher.

“The Community Clinic Lifeline Grant Program will help small or rural nonprofit clinics, including Planned Parenthood clinics, keep their doors open and provide critical services,” according to an announcement the Treasurer’s office posted on Friday.

Planned Parenthood, a national non-profit that provides contraception, health screenings and abortions, and the country’s long-standing divide over abortion are at the heart of the state’s move. Planned Parenthood representatives will join Chiang in unveiling the grant program, the announcement said.

Republicans generally oppose abortion. Recently, they approved a measure in Congress to allow states to block Planned Parenthood from receiving federal reproductive health funds. By law the funds cannot be used for abortions, but former Democratic President Barack Obama had ensured some money would go to Planned Parenthood clinics.

Actual federal funding reductions are still a while off.

In his recent proposed budget President Donald Trump called for slashing health and human services spending, and the Obamacare repeal the House of Representatives passed in April would eliminate federal funds for Planned Parenthood. But those moves do not have the force of law yet.

No other state appears to be developing a similar grant program.

(Reporting by Lisa Lambert; Editing by Cynthia Osterman)

Trump faces major test as vote looms on U.S. healthcare bill

A cyclist passes the the U.S. Capitol, on the day the House is expected to vote here to repeal Obamacare in Washington, D.C., U.S., May 4, 2017. REUTERS/Kevin Lamarque

By Richard Cowan and Yasmeen Abutaleb

WASHINGTON (Reuters) – The U.S. House of Representatives was set on Thursday for a cliffhanger vote to repeal Obamacare, as Republican leaders worked to deliver President Donald Trump a win for one of his top legislative priorities.

House Republican leaders have expressed confidence the bill would pass and several party moderates who previously objected to the measure got behind it on Wednesday, giving it new momentum.

“We’re optimistic that we’ll pass it out of the House today,” Representative Mark Meadows of North Carolina, chairman of the conservative Freedom Caucus, told MSNBC’s “Morning Joe” program on Thursday.

The vote, which a House Republican aide said was due this afternoon, was expected to be close. Even if the measure passes the House, it faces daunting odds in the Senate where Republicans hold a narrower majority.

“Today is the next step in what is likely to be a very long process,” Republican Representative Michael Burgess of Texas also said on MSNBC.

Keen to score his first major legislative victory since taking office in January, Trump threw his own political capital behind the bill, meeting Burgess and other lawmakers and calling them in an effort to win their support.

Trump, whose Republican party controls both the House and Senate, is seeking to make good on his campaign promise to repeal and replace Obamacare.

Aides said he worked the phones furiously.

Wavering moderate Republicans had worried that the legislation to overhaul President Barack Obama’s 2010 signature healthcare law would leave too many people with pre-existing medical conditions unable to afford health coverage.

But the skeptical Republican lawmakers got behind the bill after meeting with Trump to float a compromise proposal expected to face unanimous Democratic opposition.

The legislation’s prospects brightened after members of the Freedom Caucus, a faction of conservative House lawmakers who played a key role in derailing the original version last month, said they could go along with the compromise.

Millions more Americans got healthcare coverage under Obamacare, but Republicans have long attacked it, seeing it as government overreach and complaining that it drives up costs.

Called the American Health Care Act, the Republican bill would repeal most Obamacare taxes, including a penalty for not buying health insurance. It would slash funding for Medicaid, the program that provides insurance for the poor, and roll back much of Medicaid’s expansion.

The latest effort comes after earlier pushes by Trump collapsed twice, underscoring the difficulty in uniting the various factions of the Republican party.

Earlier this week, prospects for the legislation appeared grim as several influential moderate Republicans said they could not support the bill, citing concerns about people with pre-existing conditions.

House Energy and Commerce Committee Chairman Representative Greg Walden of Oregon on Thursday defended the leaders’ plan to vote on the bill without a new Congressional Budget Office analysis of the costs or impact on coverage, factoring in the recent changes.

“Obviously, it’s a work in progress,” Walden, who also met with Trump on Wednesday, said in a separate MSNBC interview.

House Democrats have rejected the latest change to the Republican legislation, saying it did not go far enough toward protecting people with pre-existing conditions.

“Republicans have made Trumpcare even more dangerous and destructive than the last time they brought it to the floor,” Democratic Leader Nancy Pelosi said to her caucus in a letter late Wednesday night.

Democrats have long thought their best chance of stopping the repeal would be in the Senate, where only a few Republicans would need to defect to stop the law from moving forward.

Republican Meadows told MSNBC he expected the Senate to make changes to the bill that would improve it. The bill would then face a final vote in the House.

With the difficulties in the House, Democrats are optimistic Republicans will face a backlash from voters and could lose seats in the 2018 mid-term elections.

(Additional reporting by David Morgan, Steve Holland, Roberta Rampton, Eric Beech and Susan Heavey; Writing by Ginger Gibson; Editing by Caren Bohan and Jeffrey Benkoe)

How Republicans can hobble Obamacare even without repeal

People march in a "Save Obamacare" rally in Los Angeles.

By Julie Steenhuysen

CHICAGO (Reuters) – Republicans may have failed to overthrow Obamacare this week, but there are plenty of ways they can chip away at it.

The Trump administration has already begun using its regulatory authority to water down less prominent aspects of the 2010 healthcare law.

Earlier this week, newly confirmed Health and Human Services Secretary Tom Price stalled the rollout of mandatory Medicare payment reform programs for heart attack treatment, bypass surgery and joint replacements finalized by the Obama administration in December.

The delays offer a glimpse at how President Donald Trump can use his administrative power to undercut aspects of the Affordable Care Act (ACA), including the insurance exchanges and Medicaid expansion that Republicans had sought to overturn.

The Republicans’ failure to repeal Obamacare, at least for now, means it remains federal law. Price’s power resides in how to interpret that law, and which programs to emphasize and fund.

Hospitals and physician groups have been counting on support from Medicare – the federal insurance program for the elderly and disabled – to continue driving payment reform policies built into Obamacare that reward doctors and hospitals for providing high quality care at a lower cost.

The Obama Administration had committed to shifting half of all Medicare payments to these alternative payment models by 2018. Although he has voiced general support for innovative payment programs, Price has been a loud critic of mandatory federal programs that dictate how doctors should deliver healthcare.

Providers such as Dr. Richard Gilfillan, chief executive of Trinity Healthcare, a $15.9 billion Catholic health system, say they will press on with these alternative payment plans with or without the government’s blessing. But they have been actively lobbying Trump officials for support, according to interviews with more than a dozen hospital executives, physicians and policy experts.

Without the backing of Medicare, the biggest payer in the U.S. healthcare system which Price now oversees, the nascent payment reform movement could lose momentum, sidelining a transformation many experts believe is vital to reining in runaway U.S. healthcare spending.

Price “can’t change the legislation, but of course he’s supposed to implement it. He could impact it,” said John Rother, chief executive of the National Coalition on Health Care, a broad alliance of healthcare stakeholders that has been lobbying the new administration for support of value-based care.

The move Friday to pull the Republican bill only reinforces the risk to the existing law, which Trump said on Friday “will soon explode.”

“It seems that the Trump Administration now faces a choice whether to actively undermine the ACA or reshape it administratively,” Larry Levitt, senior vice president at Kaiser Family Foundation, wrote on Twitter.

“The ACA marketplaces weren’t collapsing, but they could be made to collapse through administrative actions,” he added.


The United States spends $3 trillion a year on healthcare – more by far than 10 other wealthy countries – yet has the lowest life expectancy and the highest infant mortality rate, according to a 2013 Commonwealth Fund report.

Health costs have soared thanks in part to the traditional way doctors and hospitals get paid, namely by receiving a fee for each service they provide. So the more advanced imaging tests a doctor orders or pricey procedures they perform, the more money he or she makes, regardless of whether the patient’s health improves.

“We have a completely broken economy in healthcare,” said Blair Childs, senior vice president at hospital purchasing group Premier Inc. “Literally, all of the incentives in fee-for-service are for higher cost.”

Alternative payment models are designed to remove incentives that reward overtreatment of patients. Private insurers are on board, with Aetna Inc, Anthem Inc, UnitedHealth Group and most Blue Cross insurers announcing plans to shift half of their reimbursement to alternative payment models to control costs.

To promote the shift to alternative payments, the ACA created an incubator program at the Centers for Medicare Medicaid Services (CMS). The CMS innovation center is funded by $10 billion over 10 years to test payment schemes aimed at improving quality and cutting the cost of care.

The Obama administration’s decision to make some of these payment programs mandatory has drawn the ire of Price, a former U.S. senator and orthopedic surgeon. In response to a mandatory payment program for joint replacements last September, for example, Price charged that the CMS innovation center was “experimenting with Americans’ health.”

In his January 17 confirmation, Price said he was a “strong supporter of innovation,” but said he believed the CMS innovation center “has gotten a bit off track.”


President Trump has already signed an executive order directing the HHS to begin unraveling Obamacare. In the early hours of his presidency, Trump directed government agencies to freeze regulations and take steps to weaken the healthcare law.

The order directed departments to “waive, defer, grant exemptions from, or delay the implementation” of provisions that imposed fiscal burdens on states, companies or individuals. These moves were meant to minimize the costs and regulatory burdens imposed on states, private entities and individuals.

David Cutler, the Harvard health economist who helped the Obama Administration shape the ACA, said Price could do all sorts of things to undermine the law.

“If he wants to blow it up, he can,” Cutler said in an email. But if they do, he added, “they alone will own the failure.”

(Editing by Edward Tobin)

U.S. healthcare costs to escalate over next decade: government agency

doctor holds hand of patient

WASHINGTON (Reuters) – The cost of medical care in the United States is expected to grow at a faster clip over the next decade and overall health spending growth will outpace that of the gross domestic product, a U.S. government health agency said on Wednesday.

A report by the U.S. Centers for Medicare and Medicaid Services (CMS) cited the aging of the enormous baby boom generation and overall economic inflation as prime contributors to the projected increase in healthcare spending.

Overall healthcare spending will comprise 19.9 percent of the economy in 2025, up from 17.8 percent in 2015, the report forecast. The pace of growth in U.S. spending on health is expected to pick up in 2017, increasing 5.4 percent over 2016. That compares with an estimated 4.8 percent spending uptick in 2016. Spending for 2016 was estimated at $3.4 trillion.

When the final numbers are in, the growth in prescription drug spending for 2016 is expected to have slowed to 5 percent from 9 percent in 2015. However, CMS has forecast growth of 6.4 percent per year between 2017 and 2025, in part because of spending on expensive newer specialty drugs, such as for cancer and multiple sclerosis.

The projections for 2016 to 2025 were made assuming that the Affordable Care Act (ACA), former President Barack Obama’s signature healthcare law widely known as Obamacare, would remain intact. It does not take into account likely changes to the law.

The Republican-led Congress and President Donald Trump have vowed to repeal and replace the ACA, but a viable replacement plan has yet to emerge.

Trump signed an executive order on his first day in office last month to freeze regulations and enable government agencies to take other steps to weaken Obamacare.

The ACA expanded Medicaid, the government health insurance program for the poor, in more than 30 states and set up private healthcare exchanges that enabled previously uninsured people to buy health insurance. After high enrollment between 2014 and 2015, Medicaid and private health insurance spending were expected to have slowed in 2016.

But spending on Medicare, the government health insurance program for the elderly, is expected to grow between 2017 and 2025 as a larger elderly population requires more medical services.

The overall insured rate of the population is expected to reach 91.5 percent in 2025, up from 90.9 percent in 2015, the report said.

(Reporting By Yasmeen Abutaleb; Editing by Tom Brown)

Medical students, faculty rally to try to save Obamacare

Medical students protesting for obamacare

By Bob Chiarito

CHICAGO (Reuters) – Hundreds of medical students and faculty members gathered at Northwestern University’s school of medicine in Chicago on Monday to voice their opposition to the dismantling of Obamacare.

The demonstration was part of a larger White Coats for Coverage effort organized by medical students across the country and came a day before the annual deadline to enroll in the Affordable Care Act (ACA), former President Barack Obama’s healthcare law.

“The ACA is not perfect, but pulling the rug out from under the feet of our most vulnerable patients is not the answer,” Dr. Bruce Henshaw, a faculty member at Northwestern’s Feinberg School of Medicine, told the group of around 600 people.

“We will not stand idly by as our patients lose their rights. We will not stop today. We will write and call our representatives to ensure this doesn’t happen.”

Students organized the event. Northwestern University spokeswoman Marla Paul said the school had no official position on the issue.

Photos on social media showed students rallying at numerous universities and cities.

“Proud to join my Yale colleagues to collectively say #protectourpatients. Improve the ACA, DON’T repeal it,” Ryan Murphy, who shared photos of a rally at Yale University, said on Twitter.

Republican President Donald Trump’s first executive order, signed hours after taking office, directed the federal government to scale back regulations, taxes and penalties under the ACA.

Republican Representative Tom Price, Trump’s nominee to lead the Department of Health and Human Services, has said an overhaul of Obamacare will initially focus on individual health plans sold through online exchanges and the Medicaid health insurance program for low-income Americans.

Trump has said he wants to keep some elements of the program, such as allowing young adults to be covered under their parents’ insurance. He favors plans that use health savings accounts and sale of insurance across state lines.

More than 8.8 million Americans were signed up for 2017 coverage under the ACA through as of Jan. 14, according to the site, up from around 8.7 million sign-ups as of Jan. 14 last year.

Arturo Salow, a second year student at Northwestern from Miami, Florida, urged people to sign up for ACA coverage before Tuesday’s deadline, saying more enrollees would make a rollback more challenging for Republicans.

“I’d advise any patient to sign up immediately,” Salow said. “If they are going to take away coverage, let’s make it as difficult as possible.”

(Editing by David Gregorio)