How The American Health Care Act Could Affect Digital Health – Forbes
In the wake of a newly elected president and a Republican congressional majority, the future of health policy and technological innovation is far from clear. When the Affordable Care Act (ACA) was passed in 2010, it not only extended health insurance coverage to 200 million Americans but also paved the way for a 600% increase in digital health funding by introducing new market forces and value-based incentives into the industry. However, House Republicans recently rolled out their plan to repeal and replace the ACA. The American Healthcare Act (AHCA), and the package of amendments subsequently released, propose a number of fundamental changes, including elimination of both the individual mandate (replaced with premium penalties for those with discontinuous coverage) and the employer mandate, a prohibition on any further state Medicaid expansion and a significant roll back of current expansion via a shift to per capita or block state grants after 2020. The current plan proposes keeping a few popular elements of the ACA, including the bans on preexisting conditions and lifetime coverage caps and the provision allowing children under 26 to remain on their parentsâ coverage. Further changes are expected and the future of the Republican healthcare plan itself remains unclear, as there is internal GOP disagreement about the AHCA.
We at RubiconMD are keenly interested in how the AHCA (or any bill that ultimately passes) will affect healthcare throughout the country, and in particular what the changes will mean for technological innovation. Last week, the nonpartisan Congressional Budget Office (CBO) advised that the bill would lead to a significant reduction in health insurance coverage, with 14 million fewer Americans covered by 2018 and 24 million by 2026. Although the future is uncertain, as we spoke to experts from across the country at HIMSS and the NYC-based Junto Health Summit to understand how impending shifts will impact tech investments, it became clear that they all agree on one thing: digital health innovation in healthcare will have an even greater impact in light of the changes ahead.
What does the new plan mean for the healthcare industry?
The Republican healthcare agenda reflects the quintessential Republican theme of individual responsibility. The AHCA, a budget reconciliation bill, constitutes the first phase of the agenda. Phase two will likely involve numerous administrative changes from DHHS, including the relaxation of essential health benefits and making public exchanges more insurer-friendly, and phase three will see the introduction of sweeping legislation addressing the remaining desired reforms.
If the plan is carried out, insurers will be able to offer lower premiums for less coverage than under the ACA. George Kalogeropoulos, CEO of HealthSherpa, a company that allows consumers to shop and compare ACA Marketplace plans, believes these cuts will âencourage insurance companies to participate in exchanges because they can offer more competitive options. And by helping the GOP salvage the exchanges, the insurance companies may get more say in any ultimate replacement down the line.â
While the Republican plan may encourage insurers to come back to exchanges, community health centers and safety net systems that serve Medicaid and uninsured patients will be hit hardest by the needs of the 24 million fewer covered Americans the CBO expects to result from the AHCA. States such as California with high rates of Medicaid expansion, where uninsured patients already face significant access challenges, could be forced to leave an even larger high-risk population without access to adequate healthcare. According to Bridget Hogan Cole, executive director of the California-based Institute for High Quality Care, âincreased uninsured populations in California will seek services at ERs, free clinics and safety net hospitals…the number of uninsured will heighten an already serious access issue.â
This expected increase in the uninsured population may cause states and low-income healthcare providers to focus on population health management strategies. According to Dr. Jeffrey Sachs, principal of Sachs Policy Group, a member of President Obamaâs 2009 advisory committee on healthcare reform and a leading architect of the New York State Medicaid redesign, âWe are seeing health systems positioning themselves to compete in a healthcare space that incentivizes population outcomes rather than procedures and spreads financial risk for excessive costs across all stakeholders.â