Health Law and Policy Survey

Symposium Preview:

A Q&A with Keith Fontenot
Executive Vice President of Policy and Strategy, America’s Health Insurance Plans

“Gubernatorial changes – including the election of seven Democratic governors, as well as referendums that were on ballots in select states – will have huge effects on our health care system going forward and even bigger effects will be seen from changes to state legislatures.”

– Keith Fontenot

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Keith Fontenot, Executive Vice President of Policy and Strategy at America’s Health Insurance Plans, brings over 30 years of experience in federal health care and related policy issues including a leading role in developing, negotiating and implementing the 2010 Affordable Care Act. He has worked in leadership positions overseeing critical healthcare functions in the Office of Management and Budget and the Congressional Budget office.

Fontenot joined us before the February 2019 National Symposium on Health Law and Policy to discuss what’s ahead in health payments and the impacts he expects from November’s congressional election. The conversation has been edited for clarity.

Q: The United States held a Congressional election in November that delivered some major changes among the ranks of legislators. What do those changes hold for health care and the debate around the Affordable Care Act (ACA)?

A: The changes in the U.S. House of Representatives and Senate mean, in the short term, that repeal-and-replace legislation is highly unlikely to pass. Block-granting or per capita caps on Medicaid in Congress are not in the cards for at least the next two years.

Now, if you change perspectives, down to the other end of Pennsylvania Avenue, you still have an administration that has some very strong views on the ACA; the administration still has a lot of tools at its disposal – in terms of regulatory authority and waiver authority – to do those things administratively.

In the coming year Congress must reach a budget agreement, which is what resets the discretionary caps and allows for the appropriations process to move forward. Lawmakers often include many other things in that legislation, some of which could include reductions in health spending. The Congress also must pass legislation to raise the debt ceiling later this year. A budget agreement is a large and complex undertaking that often takes months of negotiations.

It is possible that there could be some attempts to provide premium stability in the individual market and make things more affordable, particularly for those who are not eligible for subsidies under ACA.

The more interesting thing right now is the interplay between the administration and Congress on these issues.

December’s District Court decision in TX v. United States of America, regarding the constitutionality of the Affordable Care Act, is just the first step in a lengthy legal process.

AHIP argued in an amicus brief before the court that provisions of the ACA affecting patients with pre-existing conditions, and those covered by Medicaid and Medicare, should remain law regardless of what the court ruled on the individual mandate. Unfortunately, this ruling harms all of these Americans.

Q: What effect do you foresee from changes the election delivered to state governments?

Gubernatorial changes – including the election of seven Democratic governors, as well as referendums that were on ballots in select states – will have huge effects on our health care system going forward and even bigger effects will be seen from changes to state legislatures.

Since states administer Medicaid programs, we may see additional states considering expanding coverage under Medicaid. It is also possible we will see some states looking to expand coverage for other selected groups outside of Medicaid.

Q: Aside from the ACA, in which other areas are we seeing significant efforts to deregulate? What are possible next steps in regulatory burden reduction?

A: On the administration end, you have regulatory proposals out to revamp the Health Reimbursement Accounts, among other things. The Administration has also described an intention to focus more on program integrity in at least the Medicaid sphere.

In some of these cases, you’re looking at heavier use of regulation, particularly to try to deal with price issues in the drug sphere, which is the most contentious and the most visible of everything the Administration has done. Drug prices are out of control, and there are a couple of proposals that make much greater use of their regulatory powers to try to lower drug prices or require certain elements of price and cost to be included in direct-to-consumer advertising.

In the deregulatory world as it relates to providers, I believe the administration has already made the major changes it’s going to make.

Q: What are the cost drivers that tend to be missed when we talk about the expense of health care?

A: We have an expensive system and that gets reflected through insurance systems and premiums and out of pocket costs.

In the pharmaceutical sphere, which represents a huge amount of that cost, we had a long period where there was a depressing effect on prices that came from many drugs coming off patent and moving into generics. But pharma has been working hard to protect its patent fortresses and monopolies, while the launch prices on new drugs have risen even further. Some of the payment systems in Medicare, such as the ASP system in Part B, can reinforce those effects.

Innovative arrangements such as those with physician groups that accept risk and work to manage costs have potential, which we have seen in Southern California. But in other areas consolidation among providers can lead to higher costs.

We also have many examples of integration occurring across the health sector in a variety of different ways, and the disruptive effect of these is not yet clear. Some may hold the potential for greater efficiencies. We are at an interesting point where there are a lot of things going on in the health sector, but where it all leads is not yet clear.

Fontenot will be speaking in-depth about what’s ahead in health payments and the impacts he expects from November’s congressional election at our National Symposium on Health Law and Policy on February 11, 2019. For more information or to register to attend our please visit: https://hlbhealthlawandpolicysymposium.com/