Major for-profit health insurance companies are wary of the American Health Care Act, the Republican plan to repeal and replace Obamacare. But they’re not throwing all they’ve got into lobbying against it. They are working with congressional Republicans, looking ahead to big tax cuts and other bills affecting federal health policy.
Some nonprofit health insurers, though, aren’t so concerned. Ken Janda, CEO of Community Health Choice, a nonprofit health insurer that offers Medicaid and Obamacare plans in the Houston area, came to the Capitol this week to meet with Texas’s Republican senators, John Cornyn and Ted Cruz, and another top Republican, Sen. John Thune (R-SD), working on the health care bill.
Janda reached out after reading Vox’s story about the powerful health care lobby’s delicate approach to the American Health Care Act.
“I’m actually kind of cranky with the for-profit guys who haven’t been out there more,” he said. “But I understand that they are worried about their tax situation. They don’t want to bite the hand that feeds them on other issues.”
I asked what his issues were with the House health care bill, what he wanted the Senate to do and what he thought of the top trade organizations’ strategy on the GOP’s efforts. Janda’s company covers about 425,000 people through Obamacare and Medicaid, so they too have a big stake in a bill that puts a spending cap on the latter program and could lead to millions fewer Americans having health coverage.
This interview has been lightly edited for clarity and length.
What are your primary concerns with what Congress is deliberating over?
On the Medicaid side, we’re not necessarily opposed to a per capita allotment. In Texas, we get paid per capita [a per capita cap, included in the House bill, gives state a flat dollar amount for each person eligible for Medicaid]. We’re kind of used to that. But where we’re really concerned is they’re trying to cut nearly a trillion dollars out of Medicaid. If they can’t do that in a way that we would still be paid actuarially sound rates. So we’re very worried that the state of Texas is going to say, ‘Here we’re going to cut your rates by 20 percent, but look, contracts with dozens of hospitals, thousands of physicians.’ How do you save that much money?
In Texas, we’ve had very good success with Medicaid managed care. We have a basically zero trend in 10 years in Texas. So there’s not a lot left to squeeze out of the Medicaid space. So the real concern is that if there’s a big cut on the Medicaid side, we have no choice but to go to providers and say, “Here’s what the new rates are.”
And I particularly worry about the rural hospitals and nursing homes. Those are probably the first two to fall. But then there’s a big public hospital in Houston, which is obviously also very nervous about this too. Already in Texas, the doctors in Texas on Medicaid probably get paid about 60 percent of Medicare. So they’re really, really low already.
What about on the private insurance?
On the insurance side, because so many of our members have [Obamacare subsidies], we’re very concerned about what’s in the House bill right now.
We support going to the 5-to-1 age rate bands [that would allow plans to charge older people up to five times as much as younger people]. Lower rates for younger people, we need younger people. We have a disproportionate number of older people who signed up because the [subsides] and the 3-to-1 rates were actually very generous to older people.
But that you can’t do, if you’re going to go to 5-to-1 rates, which we want to do — that means you actually have to increase the premium tax credits for older people and actually give the younger people a little bit less. In the House bill, it really doesn’t work. The older people, lower-income people are just clearly not going to be able to afford it. We’re trying to work to say, ‘We need to do it a little bit differently.’
I’m sure you’re not walking into these meetings, telling these guys they’ve got to start from scratch. But what are you telling them? What kind of changes are you hoping the Senate can make to what the House passed?
We hope that they can reallocate the premium tax credits and frankly use some of the money that would be going to higher-income and younger people and shift it to older and more low-income folks. We actually have a little stair-step picture of how we would do it.
I’m not opposed to having a flat-dollar amount, but the flat-dollar amount needs to tier down at a different kind of slope than what’s in the current bill.
What about on Medicaid?
On Medicaid, the real issue for us is, let’s understand the calculations of the per capita allotment — we really don’t like block grants. Though, frankly, in Texas, we would take a block grant on the expansion population, because Texas didn’t do the expansion. So give us a block grant on the expansion population and just see what we could do.
But for the existing population, especially the aged, blind, disabled, as well as the pregnant women and kids, it’s really important that we get that amount right.
We’re Medicaid-managed care plans. We kind of have conservative principles about saving money. We’re not necessarily bleeding-heart liberal. But we’re not “mean.”
We really do worry about the folks we’re taking care of. Even though Texas did very little to support the Affordable Care Act, we still reduced the uninsured by a million people. We’re thinking if the House bill just went through the Senate, we’d probably lose half of those gains. That’s not good for us, that’s not good for the public hospitals. The rural hospitals and the nursing homes, they count on Medicaid.
So much of this bill seems to be about cutting taxes and finding the savings, rather than actually improving the Affordable Care Act.
I am curious what you thought of our story. From inside the industry, what do you think about its lobbying approach?
I’m actually kind of cranky with the for-profit guys, who haven’t been out there more. But I understand that they are worried about their tax situation. They don’t want to bite the hand that feeds them on other issues.
We’re a nonprofit plan. So we don’t have like big advertising budgets. We’re continuing to try to say that we need to be out there more. We’re running op-ed pieces and tweeting and everything we can.
We’ve always felt like we were nonpartisan. We don’t want to be just in the, “The ACA is great, we don’t need any changes.” But rather trying to work inside. We’ll have to see over the next couple weeks. We may have to change. We may have to become more vocal.