Editor's note: Our Splash Health, Wellness and Wearables event is coming up on March 23 in San Francisco. We'll have Mario Schlosser (Founder & CEO of Oscar Health), Brian Singerman (Partner, Founders Fund), Steve Jurvetson (Draper Fisher Jurvetson), J. Craig Venter (Human Longevity), Lynne Chou (Partner, Kleiner Perkins), Michael Dixon (Sequoia Capital), Patrick Chung (Xfund), Check out the full lineup and register for tickets before they jump! If you want to invest as little as $2500 in our startup winners, join the Vator Investment Club (VIC).
One of Donald Trump's biggest campaign promises was to repeal and replace the Affordable Care Act. Republicans have been chomping at the bit to ditch the bill for years, and it's the first big thing Trump has tried to deliver as President.
Unfortunately for Trump, healthcare is one of the most complicated and difficult issues to tackle. It confounded every President from Truman to Obama, who just barely got his own plan passed. Now, the Republicans are finding themselves in the thick of it, as their replacement plan, the American Health Care Act (AHCA), is getting hit from all sides.
Democrats don't like it because they don't want to see President Obama's signature legislation, and legacy, be undone. Meanwhile, Republicans don't like it for a variety of reasons; some think it goes too far, while others don't think it goes far enough. Then there's the projection by the Congressional Budget Office, which showed 24 million Americans losing insurance under the plan over the next decade, while preium would go up. To be sure, the 24 million-loss estimate assumes those same people will actually be insured. Already the CBO has been off in its predictions. It predicted that by 2016, there would be 23 million people insured on the individual health exchanges. That number turned out to be 10.4 million, according to the Center for Medicare and Medicaid Services.
While the bill would reduce the deficit by $337 billion, it does so by cutting Medicaid, which was expanded dramatically under Obamacare by loosening up the qualifications of who could receive Medicaid. Medicaid is for people who typically fall in the poverty level. Under Obamacare, the calculation adjusted to include people who made slightly more. For instance, if you were a household of one and made $11,770 in 2016, that was considered the federal poverty level. If you made 138% of that, or $16,242, you would, under Obamacare, also be eligible for Medicaid. As it stands, the GOP plan does not cast a wider net.
All of this has led to many believing that the bill doesn't have the votes to pass, even with Trump's own party controlling both houses of Congress.
Whatever happens, one thing is for sure: If this bill were to pass, it would completely alter healthcare in the United States. With Vator's Splash Health conference coming up on Thursday, this will no doubt be a big topic for dicussion, as our panelists and speakers discuss the future of the healthcare space.
Here's a preview of what some of our panelists had to say about the repeal of the ACA, and what would happen if the ACHA were to pass:
Owen Tripp, CEO and co-founder of Grand Rounds:
"Changes to the ACA — whatever form these might take — won't deter the double digit growth in health care costs looming on the horizon for most employers. And it'll be interesting to see how these changes will influence the way health care is purchased and delivered. For example, consumers will become more active in decision-making, such as what services to get and which drugs to buy."
Stephanie Tilenius, Founder and CEO of Vida Health:
"The repeal of the ACA is largely focused on reducing Medicaid spend and taking back the individual and employer mandate to buy for health insurance, therefore the estimates are for between 14 to 20 million to be uninsured again. This will slow the growth of the public exchanges and companies built around the growth of the exchanges.
The other changes are more subtle in nature. For example, they are considering dropping the Cadillac tax but putting something similar in place with tax thresholds (or fewer tax benefits for employers providing healthcare). The upshot is that employer-based healthcare which covers 150 million people in the country will largely stay the same. Self-insured employers will continue to be on the forefront of healthcare innovation, looking for solutions to improve the health and productivity of their workforce while lowering costs. Self-insured employers may still push employees to a defined contribution plan or to the exchanges (like Starbucks and Target have done) but this trend will slow compared to under the ACA.
The Republicans are talking about increasing high deductible health plans (HDHP) and health savings accounts to provide more choice and lower costs for consumers. The issue is that 50 percent of people can't even afford their deductible, so HSAs are only going to help those that can afford to defer income.
They are also talking about increasing wellness benefits from 30 percent to 50 percent, so an employer can offer incentives for their employees to manage their health and get incentives back for doing so, we are still waiting to hear the details here.
Regardless of legislation, the need for mobile telehealth services that are more convenient and lower cost to help manage chronic conditions will continue to grow. Medicare and others will continue to push on reimbursement for these services, hence they are likely to reimburse for digital DPP programs like Vida starting 1/1/18."
Rebecca Lynn, General Partner at Canvas Ventures
"The number-one fear I have with 'Trumpcare,' or the repeal of the Affordable Care Act, is the uncertainty that surrounds it. As a VC, I worry that investors and strategic partners will sit on the sidelines until the new healthcare bill takes effect. That’s bad news for startups. That sentiment and others were expressed at a recent healthcare event we co-hosted on March 8th. Our 'Trumping the ACA' roundtable was attended by industry payers, providers, 'safety net' leaders, government reps, and startups. Executives from Cedars-Sinai Medical Center, Aetna, Box, Doximity, Vida Health and dozens more attended.
We know from press reports that, if passed, the effects of Trumpcare will be most felt by Medicaid users, specifically the poor. Block grants will force states to save money with the introduction of state-managed Medicaid plans. The shift from progressive Obamacare tax subsidies to regressive Republican ones will leave out poorer and younger groups from the system – and fail to alleviate the risk problem in current pools. Planned Parenthood will likely be defunded, jeopardizing services to 60 percent of its patient population which receive Medicaid or Title X funding. And despite a likely dismissal of the individual mandate, Trump intends to keep protections for preexisting conditions and the ability for a child to be on a parent’s insurance plan until age 26.
Given that, I think providers in the hospital world will feel the pressure to 'keep the engine running,' no matter what. And, regardless of what happens, patients will continue to expect better and better service from their health-care providers. Meanwhile, physicians and nurses will see more legislation enforcing new care regulations.
I also think startups in areas that are not immediately impacted by Trumpcare, such as telehealth and health transparency, will continue to receive VC funding.Lastly, I think the cost problem in the healthcare system is not disappearing, and opportunities abound to make meaningful reform in the industry."
Sean Duffy, Founder and CEO of Omada Health
"As scored by the CBO, the bill currently making its way through Congress would eventually cause 24 million fewer Americans to have health insurance in the near future. This obviously would limit the number of people who have access to preventive care and likely, continue to drive up healthcare costs related to chronic conditions like type 2 diabetes.
However, one thing that policymakers across the ideological spectrum agree on -- even in a time of sharp division over healthcare - is that bringing down healthcare costs is both a financial and moral imperative. There is also widespread acknowledgement that chronic disease, and especially obesity-related chronic disease, is one of the main drivers of rising costs. No matter what coverage mechanisms Congress chooses to implement, healthcare costs will continue to rise unless we invest in prevention. As Congress continues to look for ways to improve the American healthcare system while driving fiscal sustainability, prevention will be critical. As the largest Diabetes Prevention Program Provider in the country, Omada's results clearly demonstrate that an ounce of prevention can save pounds of treatment down the road."
Sami Inkinen, Founder and CEO of Virta Health
"Obviously, if more than ten million people lose health insurance coverage as forecasted, this is bad news for many individuals. However, regardless of the future of the ACA itself, it appears that people across the political and ideological spectrum agree that we want to: lower health care costs, which is good; move from volume to value in health care outcomes and operations, which is good; leverage technology to accomplish both of the above; go from sick care to health care.
So, I’m hopeful that entrepreneurs and technologists have all the more reasons and opportunities to have a positive impact on patients and our health care system as a whole, regardless of what happens to ACA. That’s what we are trying to do at Virta health too."
Anthony Shell, Principal at Avison Young
“In my opinion, ACA was an amazing step in the right direction for the United States as a Country. While not perfect by any means, the 20 million Americans who received insurance through it generally outweighed the negatives and issues surrounding it. I don’t view the current administration’s attempt at a healthcare package as a real comparative option, and don’t believe it will be passed.“
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