June 6, 2025 • 22 mins
Health Affairs' Jeff Byers welcomes Katie Keith of Georgetown Law back to the pod to discuss the House Republican budget reconciliation legislation and what impacts this legislation could have on the Affordable Care Act market, Medicaid beneficiaries, health savings accounts, Medicare, and more.
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Related Articles:
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- Health Policy At A Crossroads
- Trump tax bill will add $2.4 trillion to the deficit and leave 10.9 million more uninsured, CBO says (AP News)
- Expansions to Health Savings Accounts in House Budget Reconciliation: Unpacking the Provisions and Costs to Taxpayers (KFF)
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Jeff Byers (00:08):
Hello, and welcome to Health Affairs This Week. I'm
your host, Jeff Byers. We'rerecording on 06/05/2025. We're
just gonna get into it today.Y'all become an insider, blah
blah blah.
Today on the pod, we have KatieKeith back on the program to
dive into the budgetreconciliation package. Katie,
welcome back.
Katie Keith (00:27):
Thank you for having me.
Jeff Byers (00:29):
Yeah. So you're located in DC. Are you lamenting
the loss of Haikon currently?
Katie Keith (00:39):
Jeff, have no idea what that means.
Jeff Byers (00:40):
Oh, well, big ups to the real ones. It's a it's a
Katie, it was a ramen place thatclosed last month. Oh, you
should have gone.
Katie Keith (00:51):
But I we could never get in. So I don't know
how they closed either becausewe could never get a
reservation. So there you haveit. But now I know what you're
talking about.
Jeff Byers (00:59):
Oh, okay. Yeah. Well, they were they were very
good. We don't have to dwell onthat. On more timely health
policy news, the budgetreconciliation measure was
passed in the house.
It moved to the senate this weekif I if you can correct me if
I'm wrong. You came on a coupleof weeks ago to talk about this,
but, you know, what do we knowas a process right now as we're
recording?
Katie Keith (01:19):
Yeah. Absolutely. So the you are correct. The bill
is firmly with the senate. Itwas passed in the wee hours
overnight, in in late May by thehouse, 02/2015 to 214, so on a
party line vote.
So now that the bill has, youknow, passed the house, there's
not a ton of public action rightnow. I think, there's a lot of
(01:42):
quiet negotiations happeningwithin the Republican Party.
Some of those spill out intopublic, but not all of them. And
so you can see was a similardynamic in the house as well,
where you have a certain blockof the conservatives in the
senate pushing for even steepercuts to federal spending,
including health care spending.You have some moderates who are
(02:05):
worried and concerned about thedegree of spending cuts that
they're seeing, especially toprograms like Medicaid.
And so I don't know where thatshakes out, but you could tell
there's a lot of activityhappening within the party. And
then I think the second thingto, you know, the folks in DC
are certainly attuned to, but,you know, both sides of the
aisle are teeing up, I think,both of the, presumably, staff
and member level to startmeeting with the
(02:27):
parliamentarian, to plead theircase about what should stay in
the bill because and we could gointo this, Jeff, but, you know,
this Republicans in congress areusing the budget reconciliation
process, which is a veryspecific and, in some ways,
limited process, which means notyou can't put every single thing
that you might want to put inthis kind of a bill. So there
(02:47):
are certain restrictions, and,you know, this only applies
really in the senate where eachside will be pleading their
case, presumably democrats,about why different provisions
do not satisfy the requirementsof budget reconciliation, with
Republicans fighting to keepsome of those policies in. So
that is a, not a public process,but, I'm sure people are working
(03:08):
on that very much behind thescenes to to make some of the
arguments about what qualifiesand doesn't.
Jeff Byers (03:13):
Yeah. Yeah. I would love to touch on that coming up.
But first, you have a lot ofexpertise in the Affordable Care
Act field. Readers of HealthAffairs forefront will know that
you've, been a big contributorto the following the ACA series.
What are some of the majorchanges and implications in this
budget reconciliation packagefor health measures relating to
(03:35):
the ACA currently?
Katie Keith (03:36):
So the Affordable Care Act changes are quite
significant. You're starting tosee, I think, more media
attention, on this and andbetter explanations. I think a
lot of people were maybesurprised by how significant the
changes could be. So I think thefirst thing to highlight is this
would really prettyfundamentally change how people
enroll in marketplace coverage.And some of this will sound
(03:59):
similar to what I'm sure we'lltalk about on the Medicaid side
too, but there's you know, ifthis bill becomes law, there'll
be a ton of new paperworkrequirements, administrative
burdens.
You know, to submit you know,someone going to enroll through
healthcare.gov or their, statebased marketplace would have to
show proof of why they qualifyboth before they can actually
enroll in the coverage and ifthey qualify for, you know,
(04:21):
financial help to lower theirmonthly premiums. The bill would
ban what we call autoreenrollment, which is, you
know, if I'm already enrolled incoverage, a lot of folks just,
you know, simply automaticallyroll over in their same plan to
the next year. This would changethat. You'd have to, you know,
physically go into your plan andselect. And if not, you could
risk losing your coverage, whichI think would be very, very
(04:42):
confusing for many consumerswho've relied on auto
reenrollment for, you know,many, many years now.
You have a shorter enrollmentwindow. So you're just really,
you know, setting up a much morecomplicated sis it's already a
complicated system for manypeople to navigate, this a,
you'd be changing the rules,like long standing rules in real
time, but really throwing up awhole bunch of barriers that
(05:02):
people wouldn't necessarily befamiliar with. I think the other
things I wanted to highlight ischanges that would result in
higher out of pocket costs. Soat a time when, you know, a lot
of people are struggling withhealth care costs, this bill
would, you know, change themethodology that's used a little
bit technical, but the bottomline is it would raise the
annual cap on out of pocketcosts and, you know, make
(05:23):
financial assistance lessgenerous. The plans would also
be less comprehensive.
They would sort of cover less,consumers would be on the hook
for paying more for their out ofpocket costs. And the third
major change is around kind ofeligibility changes. So, you
know, the Affordable Care Act inthe marketplaces have been an
important source of coverage forlawfully present immigrants. So
(05:44):
think refugees, you know, folkswho, need asylum, domestic
violence survivors. This wouldand dreamer, know, DACA
recipients, this bill wouldeliminate eligibility for that.
So, even lawfully presentimmigrants could no longer rely
on the marketplace as a sourceof coverage, which I think would
be quite significant. And all ofthis, of course so that's some
(06:06):
of the stuff that's in the bill.I would also say overnight at
the the very end, houseRepublicans added a proposal to
fund cost sharing reductions,which are a bit complicated, so
I don't think we should go intothem here, but would also
presumably disrupt abortionaccess to abortion insurance
coverage in a bunch of statesacross the country. So that
happened overnight. And then allof this is combined with, you
(06:27):
know, expiration of moregenerous, enhanced premium tax
credits, at the end of the year.
And so it will be a full kind ofdouble whammy for folks who've
relied on this market. And andspend you know, over the past
decade, 50,000,000 Americanshave used the marketplaces. And
I think the expectation isenrollment would decline by, you
(06:47):
know, I would say at least athird if all of these changes
happen. So it's it's hugechanges coming if this bill does
make it across the finish line.
Jeff Byers (06:54):
Yeah. We'll get into the Medicaid scope of it. But
much like Medicaid, youmentioned potential
administrative burden on thosemarketplace beneficiaries or
enrollees. I'm just kindacurious, like, do you get a good
sense of what thatadministrative burden might
equal to when it comes to peopleeither forgetting that they have
(07:15):
to sign up or not knowing theyhave to make a step and then
they lose coverage? Is there anyparallels to the Medicaid market
on that?
Katie Keith (07:23):
No. Absolutely. And there's an incredible amount of
research and data that showssort of, you know, when whenever
you have some kind of a barrier.Right? Anytime a consumer has to
take an extra step, and, youknow, many people can think
about this in their own livestoo, if you have to take an
extra step, it makes it muchharder to, you know, get across
the finish line.
And so, you know, I am not anexpert on this, but I think the
(07:44):
what we saw happen in Arkansaswhen the state added Medicaid
work requirements is you saw18,000 people lose coverage, not
because they weren't eligible,but because they didn't know
about or didn't know how tocomply with the paperwork
requirements. And so I thinkthere is a cross cutting theme
here, which is, you know, a lotof the the folks we are talking
about are eligible for thecoverage. It's but you're
(08:07):
creating barriers that we knowwill result in coverage losses,
which is how these bills aresaving money, which I think is
is the point and and we'll getto based on, you know, this
week's congressional budgetoffice score. So they save money
precisely because people losetheir coverage due to the
administrative barriers that arebeing put up across these
(08:28):
different programs.
Jeff Byers (08:29):
Well, let's move on to the Medicaid side of things.
So in in general, the individualmarketplace, I think it has,
less raw numbers than theMedicaid market.
Katie Keith (08:39):
That's right. Yeah. In in total.
Jeff Byers (08:41):
That's right. Right. Double checking my own work
there on a hunch. So the impactsto Medicaid in this budget
reconciliation bill has alsogotten a fair amount of
attention, especially in thehealth care media space. What
are the major provisions there?
Katie Keith (08:58):
Yeah. So there's a a ton happening in Medicaid just
like on the Affordable Care Act.And I think a big takeaway is a
lot of the changes are targeted,at the Medicaid expansion
populations, but, a lot of thechanges that are happening here
would really have effects acrossthe entire Medicaid program. So
I think would extend to, youknow, the coverage offered to
(09:18):
children, to people withdisabilities, to, you know, all
the additional sort ofcategories you have in in what
we refer to as traditionalMedicaid. So I think if you
think about both the AffordableCare Act marketplaces and the
Medicaid expansion population, Iwouldn't say that your congress
is repealing both of thoseprograms, but they are severely
undermining both and going toyou know, would impose changes
(09:40):
that are gonna make it so muchharder for millions and millions
of people to access thecoverage.
So in terms of some of thespecific changes we're seeing to
Medicaid, you know, one that'sgotten a fair amount of
attention is the workrequirements that would go into
effect. It was originally, Ithink, 2029, and then, again,
overnight, house Republicanswould move that up to December
of twenty twenty six, whichwould be extremely quick for
(10:01):
every state in the nation todevelop and implement and then
inform Medicaid enrollees aboutan entirely new system. And and
I think this would, you know,transform a lot of the Medicaid
program. The idea would bebefore you could enroll in
Medicaid coverage for certainpeople, and then to keep your
coverage, you would have to showthat you are doing some kind of
(10:23):
activity for eighty hours amonth, whether that is working
or in school. You know, theycall these community engagement
requirements.
And there is just a a ton of,you know, experimentation on the
state side to show that thesehave not worked in part because,
you know, the vast majority ofMedicaid enrollees already work.
Or if they're not working, it'sbecause they're caregivers or
they have a disability orthey're in school. And so I
(10:44):
always think of Medicaid workrequirements as a solution in
search of a problem, if youwill. Beyond work requirements,
there would be a lot of changesto the way that states finance
their Medicaid program. Sofreezing what we call Medicaid
provider taxes so statescouldn't, you know, amend those
taxes or adopt new ones, andthat would really kind of shift
how most states use these, kindsof provider taxes.
(11:06):
So it really reduced flexibilityeven at the same time as the
this bill would shift a lot ofthe costs of the Medicaid
program from the federalgovernment to the state, so
you're sort of tying states'hands there. There's provisions
that would prevent states fromusing their own money, so not
even federal dollars, but statedollars to, fund coverage or
care programs for undocumentedresidents, which seems to me to
(11:27):
be quite unprecedented. And thenthere's attempts to limit access
to gender affirming care acrossboth Medicaid and the Affordable
Care Act. So those are somehighlights or maybe lowlights
from my perspective, but dig inin a lot more detail in those in
various forefront pieces.
Jeff Byers (11:45):
Right. And listeners can check out the health policy
at a crossroads series onforefront. Check that out.
Moving on, and I I kinda wannagive a hat tip to Kaiser Family
Foundation. I think they'recalled KFF now for highlighting
this, putting this on my radar.
But there are some changes tohealth savings accounts in this
(12:06):
bill. Gym memberships can beconsidered, medical expenses
that you can pay through yourhealth savings accounts funds,
and and annual contributionlimits would increase by about
$4,000 for self coverage,essentially doubling the basic
contribution limits for 2025. Ithought that was kinda
interesting. I don't know if youhave anything to add on that.
Katie Keith (12:27):
Interesting is is I think the right word. So there's
you are totally right. There's aton of changes in here to
various health savings accountsprovisions. I think the sort of
gym membership one that youmentioned is quite is sort of
interesting. A lot of thesehave, I think, bipartisan
support, and they've beenproposed, you know, many times
over and have never made itacross the finish line.
(12:49):
The other thing that this billwould do is codify a Trump
administration proposal. Theywere called individual coverage
health reimbursementarrangements, ICRA, which is a
name that no one could love. Andso this bill would rename them
as choice arrangements, which iscertainly a good rebrand, and
offer a tax credit. And the waythat those work, these new
(13:10):
choice arrangements, smallemployers would be able to, you
know, put money aside for anemployee to go purchase coverage
in the individual market. Somarket you know, it could be
marketplace coverage, that kindof thing.
And I think the
Jeff Byers (13:23):
Who doesn't love a choice? Unless Who doesn't love
choice fatigue.
Katie Keith (13:27):
Exactly. And, you know, I I wrote about a bunch of
these changes so folks can golook in more detail there too.
But I think one global point is,and this is a broader point
about the entire bill. A, Ithink those choice arrangements
are only going to be successfulif employers, have an a stable
individual market in which theycan put their employees in. And
(13:48):
so a lot of the changes thatwe've already talked about with
respect to the marketplaces aregoing to undermine the
individual market.
Right? So it seems a little bitto me a mixed message. We're
gonna give tax credits foremployers to send people to the
individual market even as we areundermining it through these
other changes and cuttingenrollment by a third. So that's
point one. And then point two, Ithink, you know, these health
(14:11):
savings account changes, again,bipartisan, have been talked
about for a long time.
You know, I'm really not kind ofweighing in on the policy, but
it does stick jump out to methat, you know, these are these
are sort of tax breaks. Right?And and health savings accounts
are, you know, useddisproportionately by higher
income people. And so the factthat they're paired in this bill
where you are, you know, cuttinga trillion dollars in federal
(14:33):
health care spending whileadvantaging and sort of, you
know, giving more more benefitsto higher income people through
HSAs really jumps out at me. Andso even things like the the gym
memberships, I have not lookedat this in the more recent
congressional budget officeanalysis, but when it was moving
through the Ways and MeansCommittee, that's about a
$10,000,000,000 proposal.
(14:53):
And so, you know, you've got usthe time when we're kind of
moving up Medicaid workrequirements, but giving, you
know, tax breaks for gymmemberships, it just really
jumps out to me.
Jeff Byers (15:02):
Thanks for sharing that information. Here I am just
thinking it relates to gymmemberships, and it turns out
there's contains a multitude onthat very simple line.
Katie Keith (15:12):
For better or worse. That's right.
Jeff Byers (15:14):
Finally, what are some of the major changes in
Medicare?
Katie Keith (15:17):
So they're much fewer relative certainly to the
marketplaces in Medicaid aswe've been discussing many fewer
changes to Medicare. I think inpart, because the president has
been quite clear, he does notwant to be cutting Medicare or
perceived as cutting Medicare.But there are some changes,
things like updates to theMedicare, physician fee
schedule, you know, the billwould stave off, you know, cuts
(15:40):
that are otherwise comingearlier to Medicaid
disproportionate share hospitalreductions, which is sort of
Medicare related. There's somesome changes to the Medicare
drug negotiation program andthen some transparency
requirements for pharmacybenefit managers to per that
participate in Medicare Part D,which is the prescription drug
program for Medicare. So I thinkbig changes each one of those
(16:01):
kind of in and of themselves,and yet nothing sort of pales in
comparison to what we're talkingabout, I would say, the
Affordable Care Act and andMedicaid piece.
And, Jeff, I was gonna mentionto you too because it's
something we've talked about onthe podcast before, but at least
the the version the houseversion of the bill would
include about a hundred milliondollars to fund the Trump
administration's deregulatoryefforts. There were, at at one
(16:24):
point in the bill, much broaderkind of deregulatory changes
that were seemed to me to bemuch more policy focused that
were stripped out at the end inthat overnight amendment. Could
have been more changes. Thereare fewer changes there, but
definitely, trying to fund, thatthat those sort of deregulatory
efforts through the office ofManagement and Budget. So I
wanted to flag that one for youtoo.
Jeff Byers (16:44):
Thank you. And the listeners will thank you. So
with that, yeah, the drugpricing stuff and the other
items you mentioned, I'm sure wecould talk about those ad
nauseam for the next fifteen to,you know, hour or so. But,
unfortunately, we don't havethat time. We'll have to cap it
at, like, what can we expectnext?
(17:06):
So there was a CBO analysis thatwent live this week where and
I'm quoting an AP news articleheadline, now Trump tax bill
will add 2,400,000,000,000.0 tothe deficit and leave 10,900,000
more uninsured, CBO says. Whatare what do we think is gonna
move move with this?
Katie Keith (17:26):
Yeah. So, I mean, maybe staying on the the big CBO
analysis, for one, and and thenwe could talk about what's gonna
happen or what might happennext, I guess. You know? And I I
think that's worth pointing outthat there was not full CEO
analysis until after this billwas passed by the house. So now
we sort of know, all theimplications.
There were various scores thathad happened before, but this is
the the comprehensive look byour budget experts about how
(17:49):
even how pieces of thislegislation interact with one
another. So I think you areexactly right. The
$2,400,000,000,000 in debt beingadded, federal health care
spending cuts of over atrillion, which reflect the huge
cuts to Medicaid and theAffordable Care Act that we
talked about, really significantcuts, to SNAP too. So, again,
(18:11):
kind of disproportionate impacton, lower income Americans. A
total of 11,000,000 people wouldbe uninsured under this
legislation, and then that willpretty quickly jump to
16,000,000 people uninsured ifyou add in the effects of not
expanding the enhanced premiumtax credits under the Affordable
Care Act, which, again, I thinkprobably for the third time I'm
(18:32):
saying that on this podcast, butwill expire at the end of the
year.
So I think very safe to talkabout this as 16,000,000
uninsured people. That and andjust for context, folks who were
around during the 2017 ACArepeal and replace fight, those
coverage loss numbers are verysimilar to what we were looking
at back in 2017, and and higher,I think, than the sort of very
(18:55):
famous version of the bill thatwas being voted on in the senate
when, you know, senator JohnMcCain had his very dramatic,
you know, thumbs down in thesenate. So we're we're already
much higher than than thoselevels, and I think that's
important to keep in mind. Andthen I've mentioned this
already, but, I think the CBOanalysis really underscores how
much, redistribution ishappening through this
(19:15):
legislation. So takingsignificant cuts to Medicaid and
SNAP from the lowest incomeAmericans and transferring those
resources to higher incomeAmericans through a bunch of the
tax breaks that are there.
So that is, you know And I thinkthere is analysis coming on the
Congressional Budget Officereport that will be very useful
(19:37):
for folks to dig in more. Andthen from there, you know,
there's gonna be continueddiscussions. The so called
birdbath, I think, will beongoing. I think Senate
negotiations will continue. Butthe goal would be The stated
public goal from, I think,Senate Republicans is that they
would like to have a vote by theJuly 4.
I don't know if they will makethat deadline or not, but, from
(20:00):
there, you know, depending onwhat comes out of the senate,
which I assume will lookdifferent at least in some ways
from the house bill, thelegislation would go back to the
house, or there would be sort ofa conference committee effort
that and then that bill wouldhave to pass both chambers
again. So we're we're not thereyet even though, folks are
moving moving quickly. And Ithink and and hope to, I think,
(20:22):
keep the, pedal and metal, ifyou will. So there we are, but
that's what might happen next.
Jeff Byers (20:28):
Katie Keith, what else is going on that we may
have missed in thisconversation?
Katie Keith (20:34):
Yeah. There's always more to say about what is
going on in health policy, but II think I wanted to highlight,
you know, we saw for the firsttime the Trump administration, I
think, take significant actionon abortion access. And so
earlier this week, the Trumpadministration withdrew guidance
under the, emergency medicaltreatment and active labor act
(20:56):
that had been put in place bythe Biden administration to make
it clear that women experiencinga medical emergency whose, you
know, doctor agreed that anabortion was the life or health
saving treatment that sheneeded, she should be able to
get that abortion care in inevery state in the country,
including states with abortionbans. That was pulled back by
the Trump administration, and Ithink we'll leave a bit of a
(21:18):
vacuum. That guidance had beenmeant to provide clarity to to
doctors about what federal lawrequires, and in its absence,
the law is still there, but Ithink it will add to the
chilling effect about whendoctors should provide and women
can access the care that theyneed.
You also saw FDA CommissionerMcCary commit to Senator Josh
(21:39):
Hawley to do a fulsome review ofmedication abortion. So, you
know, some of that has been kindof in the ether, but to me, this
seemed like a very clearindication that they were going
to do that. And then we'rerecording on Thursday, and
earlier today, had fourDemocratic states ask the FDA
file what we call a citizen'spetition to, you know, also look
(22:01):
at the way that FDA regulatesmedication abortion and make it
less stringent. So some majorshifts this week. I think a lot
more to come, but, definitelysomething high on my radar.
Jeff Byers (22:12):
Yeah. Well, we'll have to have you back on as more
information becomes available.Katie Keith, always a pleasure.
Thanks for joining us today onHealth Affairs This Week. And if
you, the listener, enjoyed thisepisode, send it to the ramen
lover in your life, and we'llwe'll will hold on.
We will see you next week. Weare taking some time off in the
(22:32):
summer, but we'll be back onnext week. We'll see you next
week. Thanks all.
Hello, and welcome to Health Affairs This Week. I'm
your host, Jeff Byers. We'rerecording on 06/05/2025. We're
just gonna get into it today.Y'all become an insider, blah
blah blah.
Today on the pod, we have KatieKeith back on the program to
dive into the budgetreconciliation package. Katie,
welcome back.
Katie Keith (00:27):
Thank you for having me.
Jeff Byers (00:29):
Yeah. So you're located in DC. Are you lamenting
the loss of Haikon currently?
Katie Keith (00:39):
Jeff, have no idea what that means.
Jeff Byers (00:40):
Oh, well, big ups to the real ones. It's a it's a
Katie, it was a ramen place thatclosed last month. Oh, you
should have gone.
Katie Keith (00:51):
But I we could never get in. So I don't know
how they closed either becausewe could never get a
reservation. So there you haveit. But now I know what you're
talking about.
Jeff Byers (00:59):
Oh, okay. Yeah. Well, they were they were very
good. We don't have to dwell onthat. On more timely health
policy news, the budgetreconciliation measure was
passed in the house.
It moved to the senate this weekif I if you can correct me if
I'm wrong. You came on a coupleof weeks ago to talk about this,
but, you know, what do we knowas a process right now as we're
recording?
Katie Keith (01:19):
Yeah. Absolutely. So the you are correct. The bill
is firmly with the senate. Itwas passed in the wee hours
overnight, in in late May by thehouse, 02/2015 to 214, so on a
party line vote.
So now that the bill has, youknow, passed the house, there's
not a ton of public action rightnow. I think, there's a lot of
(01:42):
quiet negotiations happeningwithin the Republican Party.
Some of those spill out intopublic, but not all of them. And
so you can see was a similardynamic in the house as well,
where you have a certain blockof the conservatives in the
senate pushing for even steepercuts to federal spending,
including health care spending.You have some moderates who are
(02:05):
worried and concerned about thedegree of spending cuts that
they're seeing, especially toprograms like Medicaid.
And so I don't know where thatshakes out, but you could tell
there's a lot of activityhappening within the party. And
then I think the second thingto, you know, the folks in DC
are certainly attuned to, but,you know, both sides of the
aisle are teeing up, I think,both of the, presumably, staff
and member level to startmeeting with the
(02:27):
parliamentarian, to plead theircase about what should stay in
the bill because and we could gointo this, Jeff, but, you know,
this Republicans in congress areusing the budget reconciliation
process, which is a veryspecific and, in some ways,
limited process, which means notyou can't put every single thing
that you might want to put inthis kind of a bill. So there
(02:47):
are certain restrictions, and,you know, this only applies
really in the senate where eachside will be pleading their
case, presumably democrats,about why different provisions
do not satisfy the requirementsof budget reconciliation, with
Republicans fighting to keepsome of those policies in. So
that is a, not a public process,but, I'm sure people are working
(03:08):
on that very much behind thescenes to to make some of the
arguments about what qualifiesand doesn't.
Jeff Byers (03:13):
Yeah. Yeah. I would love to touch on that coming up.
But first, you have a lot ofexpertise in the Affordable Care
Act field. Readers of HealthAffairs forefront will know that
you've, been a big contributorto the following the ACA series.
What are some of the majorchanges and implications in this
budget reconciliation packagefor health measures relating to
(03:35):
the ACA currently?
Katie Keith (03:36):
So the Affordable Care Act changes are quite
significant. You're starting tosee, I think, more media
attention, on this and andbetter explanations. I think a
lot of people were maybesurprised by how significant the
changes could be. So I think thefirst thing to highlight is this
would really prettyfundamentally change how people
enroll in marketplace coverage.And some of this will sound
(03:59):
similar to what I'm sure we'lltalk about on the Medicaid side
too, but there's you know, ifthis bill becomes law, there'll
be a ton of new paperworkrequirements, administrative
burdens.
You know, to submit you know,someone going to enroll through
healthcare.gov or their, statebased marketplace would have to
show proof of why they qualifyboth before they can actually
enroll in the coverage and ifthey qualify for, you know,
(04:21):
financial help to lower theirmonthly premiums. The bill would
ban what we call autoreenrollment, which is, you
know, if I'm already enrolled incoverage, a lot of folks just,
you know, simply automaticallyroll over in their same plan to
the next year. This would changethat. You'd have to, you know,
physically go into your plan andselect. And if not, you could
risk losing your coverage, whichI think would be very, very
(04:42):
confusing for many consumerswho've relied on auto
reenrollment for, you know,many, many years now.
You have a shorter enrollmentwindow. So you're just really,
you know, setting up a much morecomplicated sis it's already a
complicated system for manypeople to navigate, this a,
you'd be changing the rules,like long standing rules in real
time, but really throwing up awhole bunch of barriers that
(05:02):
people wouldn't necessarily befamiliar with. I think the other
things I wanted to highlight ischanges that would result in
higher out of pocket costs. Soat a time when, you know, a lot
of people are struggling withhealth care costs, this bill
would, you know, change themethodology that's used a little
bit technical, but the bottomline is it would raise the
annual cap on out of pocketcosts and, you know, make
(05:23):
financial assistance lessgenerous. The plans would also
be less comprehensive.
They would sort of cover less,consumers would be on the hook
for paying more for their out ofpocket costs. And the third
major change is around kind ofeligibility changes. So, you
know, the Affordable Care Act inthe marketplaces have been an
important source of coverage forlawfully present immigrants. So
(05:44):
think refugees, you know, folkswho, need asylum, domestic
violence survivors. This wouldand dreamer, know, DACA
recipients, this bill wouldeliminate eligibility for that.
So, even lawfully presentimmigrants could no longer rely
on the marketplace as a sourceof coverage, which I think would
be quite significant. And all ofthis, of course so that's some
(06:06):
of the stuff that's in the bill.I would also say overnight at
the the very end, houseRepublicans added a proposal to
fund cost sharing reductions,which are a bit complicated, so
I don't think we should go intothem here, but would also
presumably disrupt abortionaccess to abortion insurance
coverage in a bunch of statesacross the country. So that
happened overnight. And then allof this is combined with, you
(06:27):
know, expiration of moregenerous, enhanced premium tax
credits, at the end of the year.
And so it will be a full kind ofdouble whammy for folks who've
relied on this market. And andspend you know, over the past
decade, 50,000,000 Americanshave used the marketplaces. And
I think the expectation isenrollment would decline by, you
(06:47):
know, I would say at least athird if all of these changes
happen. So it's it's hugechanges coming if this bill does
make it across the finish line.
Jeff Byers (06:54):
Yeah. We'll get into the Medicaid scope of it. But
much like Medicaid, youmentioned potential
administrative burden on thosemarketplace beneficiaries or
enrollees. I'm just kindacurious, like, do you get a good
sense of what thatadministrative burden might
equal to when it comes to peopleeither forgetting that they have
(07:15):
to sign up or not knowing theyhave to make a step and then
they lose coverage? Is there anyparallels to the Medicaid market
on that?
Katie Keith (07:23):
No. Absolutely. And there's an incredible amount of
research and data that showssort of, you know, when whenever
you have some kind of a barrier.Right? Anytime a consumer has to
take an extra step, and, youknow, many people can think
about this in their own livestoo, if you have to take an
extra step, it makes it muchharder to, you know, get across
the finish line.
And so, you know, I am not anexpert on this, but I think the
(07:44):
what we saw happen in Arkansaswhen the state added Medicaid
work requirements is you saw18,000 people lose coverage, not
because they weren't eligible,but because they didn't know
about or didn't know how tocomply with the paperwork
requirements. And so I thinkthere is a cross cutting theme
here, which is, you know, a lotof the the folks we are talking
about are eligible for thecoverage. It's but you're
(08:07):
creating barriers that we knowwill result in coverage losses,
which is how these bills aresaving money, which I think is
is the point and and we'll getto based on, you know, this
week's congressional budgetoffice score. So they save money
precisely because people losetheir coverage due to the
administrative barriers that arebeing put up across these
(08:28):
different programs.
Jeff Byers (08:29):
Well, let's move on to the Medicaid side of things.
So in in general, the individualmarketplace, I think it has,
less raw numbers than theMedicaid market.
Katie Keith (08:39):
That's right. Yeah. In in total.
Jeff Byers (08:41):
That's right. Right. Double checking my own work
there on a hunch. So the impactsto Medicaid in this budget
reconciliation bill has alsogotten a fair amount of
attention, especially in thehealth care media space. What
are the major provisions there?
Katie Keith (08:58):
Yeah. So there's a a ton happening in Medicaid just
like on the Affordable Care Act.And I think a big takeaway is a
lot of the changes are targeted,at the Medicaid expansion
populations, but, a lot of thechanges that are happening here
would really have effects acrossthe entire Medicaid program. So
I think would extend to, youknow, the coverage offered to
(09:18):
children, to people withdisabilities, to, you know, all
the additional sort ofcategories you have in in what
we refer to as traditionalMedicaid. So I think if you
think about both the AffordableCare Act marketplaces and the
Medicaid expansion population, Iwouldn't say that your congress
is repealing both of thoseprograms, but they are severely
undermining both and going toyou know, would impose changes
(09:40):
that are gonna make it so muchharder for millions and millions
of people to access thecoverage.
So in terms of some of thespecific changes we're seeing to
Medicaid, you know, one that'sgotten a fair amount of
attention is the workrequirements that would go into
effect. It was originally, Ithink, 2029, and then, again,
overnight, house Republicanswould move that up to December
of twenty twenty six, whichwould be extremely quick for
(10:01):
every state in the nation todevelop and implement and then
inform Medicaid enrollees aboutan entirely new system. And and
I think this would, you know,transform a lot of the Medicaid
program. The idea would bebefore you could enroll in
Medicaid coverage for certainpeople, and then to keep your
coverage, you would have to showthat you are doing some kind of
(10:23):
activity for eighty hours amonth, whether that is working
or in school. You know, theycall these community engagement
requirements.
And there is just a a ton of,you know, experimentation on the
state side to show that thesehave not worked in part because,
you know, the vast majority ofMedicaid enrollees already work.
Or if they're not working, it'sbecause they're caregivers or
they have a disability orthey're in school. And so I
(10:44):
always think of Medicaid workrequirements as a solution in
search of a problem, if youwill. Beyond work requirements,
there would be a lot of changesto the way that states finance
their Medicaid program. Sofreezing what we call Medicaid
provider taxes so statescouldn't, you know, amend those
taxes or adopt new ones, andthat would really kind of shift
how most states use these, kindsof provider taxes.
(11:06):
So it really reduced flexibilityeven at the same time as the
this bill would shift a lot ofthe costs of the Medicaid
program from the federalgovernment to the state, so
you're sort of tying states'hands there. There's provisions
that would prevent states fromusing their own money, so not
even federal dollars, but statedollars to, fund coverage or
care programs for undocumentedresidents, which seems to me to
(11:27):
be quite unprecedented. And thenthere's attempts to limit access
to gender affirming care acrossboth Medicaid and the Affordable
Care Act. So those are somehighlights or maybe lowlights
from my perspective, but dig inin a lot more detail in those in
various forefront pieces.
Jeff Byers (11:45):
Right. And listeners can check out the health policy
at a crossroads series onforefront. Check that out.
Moving on, and I I kinda wannagive a hat tip to Kaiser Family
Foundation. I think they'recalled KFF now for highlighting
this, putting this on my radar.
But there are some changes tohealth savings accounts in this
(12:06):
bill. Gym memberships can beconsidered, medical expenses
that you can pay through yourhealth savings accounts funds,
and and annual contributionlimits would increase by about
$4,000 for self coverage,essentially doubling the basic
contribution limits for 2025. Ithought that was kinda
interesting. I don't know if youhave anything to add on that.
Katie Keith (12:27):
Interesting is is I think the right word. So there's
you are totally right. There's aton of changes in here to
various health savings accountsprovisions. I think the sort of
gym membership one that youmentioned is quite is sort of
interesting. A lot of thesehave, I think, bipartisan
support, and they've beenproposed, you know, many times
over and have never made itacross the finish line.
(12:49):
The other thing that this billwould do is codify a Trump
administration proposal. Theywere called individual coverage
health reimbursementarrangements, ICRA, which is a
name that no one could love. Andso this bill would rename them
as choice arrangements, which iscertainly a good rebrand, and
offer a tax credit. And the waythat those work, these new
(13:10):
choice arrangements, smallemployers would be able to, you
know, put money aside for anemployee to go purchase coverage
in the individual market. Somarket you know, it could be
marketplace coverage, that kindof thing.
And I think the
Jeff Byers (13:23):
Who doesn't love a choice? Unless Who doesn't love
choice fatigue.
Katie Keith (13:27):
Exactly. And, you know, I I wrote about a bunch of
these changes so folks can golook in more detail there too.
But I think one global point is,and this is a broader point
about the entire bill. A, Ithink those choice arrangements
are only going to be successfulif employers, have an a stable
individual market in which theycan put their employees in. And
(13:48):
so a lot of the changes thatwe've already talked about with
respect to the marketplaces aregoing to undermine the
individual market.
Right? So it seems a little bitto me a mixed message. We're
gonna give tax credits foremployers to send people to the
individual market even as we areundermining it through these
other changes and cuttingenrollment by a third. So that's
point one. And then point two, Ithink, you know, these health
(14:11):
savings account changes, again,bipartisan, have been talked
about for a long time.
You know, I'm really not kind ofweighing in on the policy, but
it does stick jump out to methat, you know, these are these
are sort of tax breaks. Right?And and health savings accounts
are, you know, useddisproportionately by higher
income people. And so the factthat they're paired in this bill
where you are, you know, cuttinga trillion dollars in federal
(14:33):
health care spending whileadvantaging and sort of, you
know, giving more more benefitsto higher income people through
HSAs really jumps out at me. Andso even things like the the gym
memberships, I have not lookedat this in the more recent
congressional budget officeanalysis, but when it was moving
through the Ways and MeansCommittee, that's about a
$10,000,000,000 proposal.
(14:53):
And so, you know, you've got usthe time when we're kind of
moving up Medicaid workrequirements, but giving, you
know, tax breaks for gymmemberships, it just really
jumps out to me.
Jeff Byers (15:02):
Thanks for sharing that information. Here I am just
thinking it relates to gymmemberships, and it turns out
there's contains a multitude onthat very simple line.
Katie Keith (15:12):
For better or worse. That's right.
Jeff Byers (15:14):
Finally, what are some of the major changes in
Medicare?
Katie Keith (15:17):
So they're much fewer relative certainly to the
marketplaces in Medicaid aswe've been discussing many fewer
changes to Medicare. I think inpart, because the president has
been quite clear, he does notwant to be cutting Medicare or
perceived as cutting Medicare.But there are some changes,
things like updates to theMedicare, physician fee
schedule, you know, the billwould stave off, you know, cuts
(15:40):
that are otherwise comingearlier to Medicaid
disproportionate share hospitalreductions, which is sort of
Medicare related. There's somesome changes to the Medicare
drug negotiation program andthen some transparency
requirements for pharmacybenefit managers to per that
participate in Medicare Part D,which is the prescription drug
program for Medicare. So I thinkbig changes each one of those
(16:01):
kind of in and of themselves,and yet nothing sort of pales in
comparison to what we're talkingabout, I would say, the
Affordable Care Act and andMedicaid piece.
And, Jeff, I was gonna mentionto you too because it's
something we've talked about onthe podcast before, but at least
the the version the houseversion of the bill would
include about a hundred milliondollars to fund the Trump
administration's deregulatoryefforts. There were, at at one
(16:24):
point in the bill, much broaderkind of deregulatory changes
that were seemed to me to bemuch more policy focused that
were stripped out at the end inthat overnight amendment. Could
have been more changes. Thereare fewer changes there, but
definitely, trying to fund, thatthat those sort of deregulatory
efforts through the office ofManagement and Budget. So I
wanted to flag that one for youtoo.
Jeff Byers (16:44):
Thank you. And the listeners will thank you. So
with that, yeah, the drugpricing stuff and the other
items you mentioned, I'm sure wecould talk about those ad
nauseam for the next fifteen to,you know, hour or so. But,
unfortunately, we don't havethat time. We'll have to cap it
at, like, what can we expectnext?
(17:06):
So there was a CBO analysis thatwent live this week where and
I'm quoting an AP news articleheadline, now Trump tax bill
will add 2,400,000,000,000.0 tothe deficit and leave 10,900,000
more uninsured, CBO says. Whatare what do we think is gonna
move move with this?
Katie Keith (17:26):
Yeah. So, I mean, maybe staying on the the big CBO
analysis, for one, and and thenwe could talk about what's gonna
happen or what might happennext, I guess. You know? And I I
think that's worth pointing outthat there was not full CEO
analysis until after this billwas passed by the house. So now
we sort of know, all theimplications.
There were various scores thathad happened before, but this is
the the comprehensive look byour budget experts about how
(17:49):
even how pieces of thislegislation interact with one
another. So I think you areexactly right. The
$2,400,000,000,000 in debt beingadded, federal health care
spending cuts of over atrillion, which reflect the huge
cuts to Medicaid and theAffordable Care Act that we
talked about, really significantcuts, to SNAP too. So, again,
(18:11):
kind of disproportionate impacton, lower income Americans. A
total of 11,000,000 people wouldbe uninsured under this
legislation, and then that willpretty quickly jump to
16,000,000 people uninsured ifyou add in the effects of not
expanding the enhanced premiumtax credits under the Affordable
Care Act, which, again, I thinkprobably for the third time I'm
(18:32):
saying that on this podcast, butwill expire at the end of the
year.
So I think very safe to talkabout this as 16,000,000
uninsured people. That and andjust for context, folks who were
around during the 2017 ACArepeal and replace fight, those
coverage loss numbers are verysimilar to what we were looking
at back in 2017, and and higher,I think, than the sort of very
(18:55):
famous version of the bill thatwas being voted on in the senate
when, you know, senator JohnMcCain had his very dramatic,
you know, thumbs down in thesenate. So we're we're already
much higher than than thoselevels, and I think that's
important to keep in mind. Andthen I've mentioned this
already, but, I think the CBOanalysis really underscores how
much, redistribution ishappening through this
(19:15):
legislation. So takingsignificant cuts to Medicaid and
SNAP from the lowest incomeAmericans and transferring those
resources to higher incomeAmericans through a bunch of the
tax breaks that are there.
So that is, you know And I thinkthere is analysis coming on the
Congressional Budget Officereport that will be very useful
(19:37):
for folks to dig in more. Andthen from there, you know,
there's gonna be continueddiscussions. The so called
birdbath, I think, will beongoing. I think Senate
negotiations will continue. Butthe goal would be The stated
public goal from, I think,Senate Republicans is that they
would like to have a vote by theJuly 4.
I don't know if they will makethat deadline or not, but, from
(20:00):
there, you know, depending onwhat comes out of the senate,
which I assume will lookdifferent at least in some ways
from the house bill, thelegislation would go back to the
house, or there would be sort ofa conference committee effort
that and then that bill wouldhave to pass both chambers
again. So we're we're not thereyet even though, folks are
moving moving quickly. And Ithink and and hope to, I think,
(20:22):
keep the, pedal and metal, ifyou will. So there we are, but
that's what might happen next.
Jeff Byers (20:28):
Katie Keith, what else is going on that we may
have missed in thisconversation?
Katie Keith (20:34):
Yeah. There's always more to say about what is
going on in health policy, but II think I wanted to highlight,
you know, we saw for the firsttime the Trump administration, I
think, take significant actionon abortion access. And so
earlier this week, the Trumpadministration withdrew guidance
under the, emergency medicaltreatment and active labor act
(20:56):
that had been put in place bythe Biden administration to make
it clear that women experiencinga medical emergency whose, you
know, doctor agreed that anabortion was the life or health
saving treatment that sheneeded, she should be able to
get that abortion care in inevery state in the country,
including states with abortionbans. That was pulled back by
the Trump administration, and Ithink we'll leave a bit of a
(21:18):
vacuum. That guidance had beenmeant to provide clarity to to
doctors about what federal lawrequires, and in its absence,
the law is still there, but Ithink it will add to the
chilling effect about whendoctors should provide and women
can access the care that theyneed.
You also saw FDA CommissionerMcCary commit to Senator Josh
(21:39):
Hawley to do a fulsome review ofmedication abortion. So, you
know, some of that has been kindof in the ether, but to me, this
seemed like a very clearindication that they were going
to do that. And then we'rerecording on Thursday, and
earlier today, had fourDemocratic states ask the FDA
file what we call a citizen'spetition to, you know, also look
(22:01):
at the way that FDA regulatesmedication abortion and make it
less stringent. So some majorshifts this week. I think a lot
more to come, but, definitelysomething high on my radar.
Jeff Byers (22:12):
Yeah. Well, we'll have to have you back on as more
information becomes available.Katie Keith, always a pleasure.
Thanks for joining us today onHealth Affairs This Week. And if
you, the listener, enjoyed thisepisode, send it to the ramen
lover in your life, and we'llwe'll will hold on.
We will see you next week. Weare taking some time off in the
(22:32):
summer, but we'll be back onnext week. We'll see you next
week. Thanks all.
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