One Year in…

Last year was supposed to be the final year of Obamacare, at least based on promises of Candidate Donald Trump and the Republican-controlled Congress. “Repeal and Replace” was a legislative priority for the new administration. Yet Obamacare, though mortally wounded, is still alive one year into Trump’s presidency. What will 2018 bring? Will Obamacare – the dying patient – heal and recover? Will it remain in a terminal state in hospice care, waiting for dying legislation? Or will Congress mercifully let Obamacare die with dignity, perhaps assisting in the process?

Congress did try; a repeal and replace bill was crafted, which, although not a true repeal, did gut the core of Obamacare. The bill passed the House but failed to pass the Senate, despite the Republican majority. A true repeal would have required 60 Senate votes to break a guaranteed Democrat filibuster. Republicans were alone in their quest with zero Democrat support, and with only a slim Senate majority, they could not even garner enough support for the replacement bill. After the failed vote, Senate Majority Leader Mitch McConnell gave up saying, “I think we’ll probably move on to other issues.

President Trump had other arrows in his quiver: executive orders. President Obama had used these effectively to circumvent the legislative process – and his successor did the same. Those who criticized Obama for taking matters into his own hands, bypassing Congress, could hardly complain when Trump did the same thing. Last fall, Trump signed several executive orders. One made it easier for individuals and small businesses to band together and buy health insurance through nationwide association health plans. A second eliminated the ban on purchasing insurance across state lines, allowing more competition and – potentially – lower prices. Another order permitted the purchase of short-term policies that didn’t have to cover preexisting conditions, which allows the young and healthy to purchase ‘bare bones’ plans at a lower cost – better meeting their insurance needs. Lastly, the President repealed a previous executive order providing subsidies and assistance to middle and lower income individuals for high-cost premiums and deductibles. Because the subsidies were appropriated by executive order, rather than Congress, it was much easier for the next president to simply cancel the order. Live by executive order, die by executive order.

The real deathblow came via the tax bill passed late in 2017, which eliminated the individual mandate – the lynchpin of Obamacare. This went hand-in-hand with Obamacare’s required coverage of preexisting conditions, forcing the young and healthy to purchase insurance – or face a penalty – to fund care for sicker patients with preexisting conditions. Whether the government can and should force individuals to purchase something they neither want nor need is up for debate, and may not be constitutional. Regardless, beginning in 2019, fewer will be paying into the system, meaning less financial support for those most in need of insurance. The downstream effect will be the continuation of an existing trend of many insurance carriers leaving the individual insurance market. Those that do stay will be charging higher premiums to offset the cost of insuring sicker and more expensive individuals.

Currently, 29 percent of Obamacare enrollees have only one insurer offering policies; in 2016, it was only 6 percent. Ten states have only one insurer. Aetna and Humana have both exited Obamacare, and Anthem has downsized its participation. Premiums also continue to rise. The benchmark silver Obamacare plan will increase 37 percent for 2018, on top of a 25 percent increase last year and a 13 percent bump the year before. This means that a healthy millennial will pay on average $5,000 per year for a silver plan, and this doesn’t include the deductible and copay; here, the deductible is $4,000 and the copay is 30 percent. This is insurance that is unaffordable to purchase and just as unaffordable to actually use, which is why, without the individual mandate in place, the millennial will choose to go without insurance or else pick a low cost ‘catastrophic’ plan instead.

Already, fewer people are signing up for coverage in 2018 compared with the previous year. The government cut the Obamacare advertising budget by 90 percent and shortened the enrollment period. Many are choosing Medicaid insurance instead. Currently, 75 million Americans are on Medicaid, nearly a quarter of the population, and it’s growing each year.

Will much change legislatively in 2018? Doubtful. It’s an election year, with the November midterms determining control of Congress and the fate of President Trump. Then again, Republicans are energized after their tax victory and want to keep the ball rolling. Most likely infrastructure will be the target of their efforts rather than healthcare.

Medicare is largely unaffected by all of this, which is the primary payer in ophthalmology given the elderly patient population. Ophthalmology will, however, be affected by having to care for more Medicaid patients. Depending on the state, Medicaid reimbursement may be far below the cost of care, causing some ophthalmologists to limit or not accept any Medicaid patients. But quality measures, value-based payment schemes, and industry consolidation, outside the realm of Obamacare, will be the biggest thorn in the side of ophthalmologists. High-quality care is expensive; think of the branded drugs used to treat macular degeneration. High-cost providers will be penalized by Medicare. And add to that the growing overhead costs due to inflation and regulations. Ophthalmology practices, like many small businesses, are feeling the pinch. Reimbursements are not keeping up with the cost of doing business, leading many practices to consolidate or be purchased, as a means of staying afloat.

Twenty-eighteen won’t be the end of the world for ophthalmology in the US, but challenges will continue to apply painful pressure. True healthcare reform at a national level is unlikely based on the experiences of 2017. A slow slide toward single payer continues, with over a third of Americans receiving government-based insurance. Every year brings new challenges, but we are a resourceful specialty, adapting and surviving. Expect that to continue.