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Podcast: The GOP’s Path To ‘Repeal And Replace’ May Not Be So Easy

MARY AGNES CAREY: Hi. I’m Mary Agnes Carey of Kaiser Health News. Along with our partners at The Lancet. I’d like to welcome you to an analysis of what the 2016 election results mean for health care.

Starting in January, Republicans will control the White House and both chambers of Congress. After promising to repeal and replace the Affordable Care Act, President-elect Donald Trump has said he’d now like to keep some elements of the law.

Republicans who have voted for years to repeal the law now have their chance to enact a replacement. Medicare and Medicaid might also see major changes under a GOP-controlled White House and Congress.

Joining me here at the Kaiser Health News studios in Washington are Julie Rovner, a KHN senior correspondent, and Margot Sanger-Katz, a domestic correspondent at The New York Times, where she covers health care for The Upshot.

Joining us from The Lancet’s editorial offices in London is Richard Lane, the medical journal’s web editor.

Thanks to everyone for joining me. Appreciate it.

Cross talk : Lovely to be here, thank you.

From left, KHN's Julie Rovner and Mary Agnes Carey joined Margot Sanger-Katz of The New York Times for a podcast in the KHN studio on Tuesday. (Francis Ying/KHN)

From left, KHN’s Julie Rovner and Mary Agnes Carey joined Margot Sanger-Katz of The New York Times for a podcast in the KHN studio on Tuesday. (Francis Ying/KHN)

MARY AGNES CAREY: Julie I want to start with you. Can you talk a little bit about what Donald Trump’s presidency and Republican control of Congress mean for ACA repeal? Both of them say that repeal is a top priority but how would they actually go about it? And would Senate Republicans really go along with all of this?

JULIE ROVNER: This is the classic case of the dog who catches the car. Then they go ‘Now what do we do with it?’ The Republicans have been voting to repeal all or parts of the law pretty much since it passed. And now they’ve discovered, low and behold, some parts of the law are actually kind of popular. So if they’re actually going to repeal it they’re actually going to have to have something to replace it with. For all these repeal votes, they don’t really have a set program to replace it with. On the campaign trail, Donald Trump only really described it as “something terrific.” They’re basically backed into a corner. They have to do it. They have to repeal the law and they have to figure out what they’re going to replace it with and that’s what’s going to play out over the next year.

MARY AGNES CAREY: Margot, how do you see this shaking out?

MARGOT SANGER-KATZ: I think it’s extremely hard to predict. I don’t have a good sense of whether there’s a lot of consensus among Republicans about what they want to do. There’s sort of a whole menu of different things they could do. They could just repeal the law and say we’ll fix it later, but that has a lot of political risk because then you end up with a lot of disruption, with lots of people potentially losing their insurance, with insurance companies deciding they don’t want to provide insurance in this uncertain environment. And then they sort of own the political fallout in the way that the Democrats in the last few years have really owned the challenges of the ACA’s problems.

They could come together and say we’re going to repeal the Affordable Care Act and we have a new program that we’re going to replace it with, but, you know, it’s not so easy to develop these health reform proposals as we learned the last time around. And it’s not clear that all Republicans are necessarily going to agree on one plan. They have majorities in both houses of Congress but they don’t have a really big majority in the Senate. They really just have enough if all but one vote they can squeak something through. The sort of second option is could they come together with some really detailed proposal and do it all at once. And then I think there’s sort of a third option that Donald Trump alluded to on Friday, which is maybe we don’t repeal and replace it, we just amend the Affordable Care Act. Maybe they could take a couple of particularly unpopular provisions or make a couple of changes that they’ve really wanted to do for a long time and try to keep most of what’s there and make these little tweaks and be able to say, ‘Ok, we’ve done the thing that we’ve told our voters we would do by changing the law.’

JULIE ROVNER: It’s worth remembering that everybody thinks the Affordable Care Act started when President Obama was inaugurated. Actually the Affordable Care Act started about a year and a half before that. The committees in Congress were laying the groundwork, they were talking with stakeholders, with industry people. There were all these negotiations. There was a white paper that the chairman of the Senate Finance Committee put out, what was it, a day or two after the election. So all of the groundwork had been laid and it still took Congress a year and a half to get the Affordable Care Act through. So if Republicans think they can repeal and replace this in 100 days, I think that’s highly unlikely.

MARY AGNES CAREY: In my memory, the Library of Congress, the big summit on health care. Julie may have covered that as well. Yeah, this has definitely been kicking around for a while.

Richard Lane, I want to go to you. What do people outside of the U.S. think of the election results, and from your perspective at The Lancet, what do you think all this means for the future of the ACA?

RICHARD LANE: Yeah, that’s one great question. We’re still very much in shock, actually, as I’m sure a lot of America is too because the result obviously wasn’t predicted and we weren’t expecting it. So we’re getting over the shock of last Tuesday and it’s hard to believe it’s only just about a week ago. But also, there’s a sense that ‘Well, what does it mean?’ And I guess there’s a certain sense of bewilderment because what we’re hearing coming from President-elect Trump, as you’ve already alluded to, seems to be already changing quite quickly. I mean, he clearly said some very strong, contentious thing when he was on the campaign trail, but we’re getting the sense that as he said, maybe he’s reconsidering or maybe that meeting with Barack Obama last Thursday is already having a bit of an effect. In terms of health policy, I mean, yes, we’re very concerned at The Lancet because of course broadly speaking, we very much supported the progressive agenda under the Barack Obama — or two Barack Obama administrations. We also know from you guys and from other sources how difficult the Affordable Care Act — what a difficult life it had it terms of implantation, not just from when the websites all crashed when they tried to launch the insurance markets, but the problems with the costs, the lack of people entering the insurance markets which has meant that some insurers have pulled or prices have gone through the roof.

So we certainly are clear that the Affordable Care Act, which clearly had very good progressive intentions, has been implemented pretty badly and we’re obviously very concerned about that. But we’re sort of getting the impression that what Trump might be saying now is what Hillary Clinton might have been saying if she’d become President, which is ‘Yeah, I know the Affordable Care Act is having problems, but my God, I’m going to fix it.’ I’m pretty sure Hillary Clinton was saying, ‘I’m going to fix the Affordable Care Act,’ wasn’t she? So it would seem that we’re almost as a philosophical point of view, almost there’s a bit of convergence going on.

Richard Lane, web editor of The Lancet, participates in Tuesday's webcast from The Lancet’s London offices. (Courtesy of The Lancet)

Richard Lane, web editor of The Lancet, participates in Tuesday’s webcast from The Lancet’s London offices. (Courtesy of The Lancet)

JULIE ROVNER: That’s an excellent point and I’ve been thinking of it myself. In some ways, if they actually want to fix what’s wrong with the Affordable Care Act, they’re more likely to do it with a Republican President and a Republican Congress rather than a Democratic President and a Republican Congress where clearly, they never would have gone along with it. Now they feel some sense of ownership of what they’re going to do. And I’ve actually been saying for a while that I think they can end up sort of accidentally backing into fixing it because they may not be able to think of anything else to do instead.

RICHARD LANE: Yes, we wonder that too — whether there might actually be a bit of a policy vacuum being created as a result of the shock election results and whether, potentially, that could be, ironically or paradoxically, provide an opportunity for better progress in health care. And one thing we’re particularly aware of here, as I’m sure you’re aware, that from The Lancet’s perspective, we believe that health is a human right, not an employment privilege or benefit. And I know it’s more than just an employment benefit in the United States, you have your Medicare and Medcaid programs, obviously, but in terms of the principle of trying to prevent individual people, particularly people on low incomes from having catastrophic health expenses. I’m sure Donald Trump and the Republican party — the last thing they’re going to want once they get into power is that suddenly people who were beginning to be reached by the Affordable Care Act, suddenly for whatever reason not having insurance coverage, or if you’re going to have people who have lost their jobs which has resulted in those Rust [Belt] state people voting for Trump last week in the election, suddenly finding themselves even more crippled because there isn’t a plan in place, that could really backfire, surely on Trump and his new team.

MARGOT SANGER-KATZ: In some ways this reflects real division inside the Republican party. You know, Donald Trump — and we’ve been talking about this throughout the entire election — is sort of not the standard-bearer for the party. He is an idiosyncratic candidate who is more of a populist who had throughout the campaign expressed sort of more support for social welfare programs, including the health care programs and, you know, it’s sort of hard to know how he and the Republicans in Congress who, in general, have been much less enthusiastic about providing health insurance to low-income Americans will reach some kind of compromise. Trump has said repeatedly throughout the campaign that he was very concerned about health care access for the poor, that he thought it was important that there was a safety net. He said, you know, people shouldn’t be dying in the streets. That one time he said, ‘Even if I lose the election for having this position, it will have been worth it because I think it’s important.’ But we do see in some of the kind of more formal campaign documents that they put out, and most recently on their transition website, that the kinds of policies that they’re describing in print are rather different than the things that he says on the campaign trail and seem much more in line with what Republicans in Congress are interested in, which is a sort of more stripped-down, more free market kind of program that probably provides a little bit less of a safety net. So I think this is going to be one of the most interesting things to watch is: how does Trump and other members of his party find some common ground?

JULIE ROVNER: You know we’ve talked so much about the divisions in the Democratic Party between the single payer wing, the people who want Medicare for all, and the Affordable Care Act wing, if you will, who sort of want to try to keep this more … a little bit less heavy-government. You have sort of the same thing in the Republican Party. You have, well, I guess what used to be called moderate Republicans who want social programs and believe in health care programs but don’t necessarily want the government fully involved in health care and then there are the market-based people who want no government in health care. The problem is at this point in time, as we’ve been discussing, you have 20 million people who are getting insurance through this law. It’s not theoretical anymore. It’s not just an argument about, ‘What role should the government play in health care?’ Because if you just turned a switch and made it go away, you would have 20 million people who would be very angry.

MARY AGNES CAREY: Well there’s a lot of political peril in that too, right? I mean I don’t want to talk about elections, but the midterms are only about 22 months away. Do you really want to get, Republicans I think do not want to get blamed for leaving upwards of 20 million or more high and dry without coverage.

JULIE ROVNER: Many of them in Republican states.

MARGOT SANGER-KATZ: The politics are very tricky though because if you look at the surveys of Republican voters, wanting to repeal the Affordable Care Act is probably the most unifying issue across the waterfront of policy issues. Republican voters in general really do not like the Affordable Care Act. I don’t know that they’re kind of in the weeds of, ‘what is the Affordable Care Act and what’s not, what does repeal really mean?’ But I think that they expect their elected representatives to do something about this. On the other hand, I do think that any kind of repeal of the Affordable Care Act, even one that has sort of a great consensus replacement package, is going to create some disruption, is going to mean that there are many millions of people who either lose health insurance or have to change their health insurance arrangements. And we saw with the implementation of the Affordable Care Act that even a very small minority of Americans being disrupted by these policy changes can really make a lot of noise and can make a lot of political trouble.

MARY AGNES CAREY: So let’s go to a little bit to the mechanics, kind of the ground game, Julie, how this will happen. We know the Republicans don’t have 60 votes — that’s what you need in the Senate to stop a filibuster. So they have to use something called “budget reconciliation,” where with 51 votes you can make some changes. Take us through what sort of changes might happen, and what are the things in the law that will remain, that they can’t touch through this process?

JULIE ROVNER: There are a number of opportunities actually. President Trump once he’s sworn in could do a lot on his own to undermine the law.

MARY AGNES CAREY: So, that’s the executive orders?

JULIE ROVNER: That’s the executive orders. And you know the essential benefits actually, as someone pointed out, those are regulations. I mean, they’re in the law but what they are is a regulation. He could order that changed. He could drop this very contentious lawsuit and basically get rid of the cost sharing subsidies that help people under two and a half times poverty pay their deductibles and copayments. By law, the insurers would have to continue to provide that, but the government couldn’t pay them back, that would kind of blow a hole in the exchanges. The general, obviously we don’t know what’s going to happen, but there’s sort of a general working consensus that he’s probably not going to do things that would seriously undermine the insurers who are offering coverage because if they’re really going to delay this, if they’re going to repeal it and say ‘but it’s going to go away on a date certain’ giving them time to come up with a replace, you don’t really want to blow up the insurance coverage that people have now. So assuming that he’s not going to do that then they move on to the idea of using this budget process called reconciliation where you don’t, where you are not subject to a filibuster in the Senate. But not everything can be done. They can’t repeal the entire law through budget reconciliation, they can only repeal things that have an immediate impact on the federal budget — either adding or subtracting. So a lot of the insurance regulations that affect the private market are not subject to being repealed under budget reconciliation. So they could basically, what they could do is undermine the law to the point where it wouldn’t work. But in order to replace it they’re going to have to have 60 votes.

MARY AGNES CAREY: Margot, you wrote about this today in the Times, about if some parts are repealed and some remain. Sort of take us through your story and some of the impacts of some of these things coming in and out of the law.

MARGOT SANGER-KATZ: So we saw Mr. Trump last week say that there are some parts of the Affordable Care Act that he really likes and he wisely picked the things that are the most popular among Americans because they are the things that make the law feel fair. And the main thing that he talked about is that the law prevents insurance companies from shutting out people who have preexisting health conditions. So, you know, if you have asthma, if you have had cancer in the past, if you’ve had even allergies, before the Affordable Care Act, if you went to an insurance company and said, “Sell me insurance,” they could say, “No, we don’t want to give insurance to someone who had allergies, we’d rather give health insurance to someone who had a completely clean bill of health.”

And so the law said, no, you have to offer insurance to everyone. But then it included all these other provisions that were designed to make sure that the market wouldn’t just become a market for really sick people. It created a lot of incentives for healthier people to also buy health insurance because if you have a health insurance market where sick people can get coverage when they need it, those people have a really big incentive to sign up. And healthy people have a really big incentive to just wait until they get sick and then they can buy insurance. And so what you end up with is a very, very expensive insurance pool. Insurance is not affordable for anyone, and it’s especially not affordable for those sort of good Samaritan healthy people that are like trying to be responsible and get in early.

So, you know, if you take away all of the kind of unpleasant parts of the Affordable Care Act that help bring healthy people into the market, then this sort of market-based structure where you can’t have discrimination doesn’t work very well. And you know, I don’t know that Donald Trump has really thought about the kind of nuts and bolts of how it works, but, you know, that is definitely something that’s going to have to be thought about.

And if we go through this budget process that Julie described, the budget process can get rid of some of those incentives because they’re financial. It can say, we’re going to stop giving people money to help them pay for their insurance premiums and we’re going to stop fining people who fail to buy insurance. But it would be much harder for them to use this process to take away those rules that allow everyone to buy insurance who wants it. And so you could really see a very dysfunctional market resulting from that mixture of policies.

I think it’s just a reminder that, you know, the Affordable Care Act as it’s written has a lot of problems and flaws, but the Democrats who wrote it did think pretty carefully about how you kind of layered a bunch of policies together to try to create the most stability. And any replacement that’s going to have to come next is going to have to wrestle with some of those same questions.

We can’t just have the most popular, the most wonderful parts and none of the parts that are unpleasant. Surely, if we could have done that, that’s what would have been done the first time.

JULIE ROVNER: It’s worth pointing out that Mitt Romney had the same position in 2012, that this is sort of — part of the Republican position on health care is that we’re going to try to keep the things that are popular and find out, you know, and find ways to fix the parts that are unpopular. Except that they haven’t actually been able to do that yet.

MARY AGNES CAREY: Well, will Republicans make peace with the individual mandate? I mean they’ve criticized — they were for it before, historically.

JULIE ROVNER: It’s a Republican idea.

MARY AGNES CAREY: It’s a Republican idea, right, and it’s been criticized as part of the Affordable Care Act, but as Margot points out, it’s one of those essential things you need to balance the risk pool. So how do they, how do they make their way on this?

JULIE ROVNER: That’s one of the things that they’re going to have to fight about. I suspect they won’t make peace with the individual mandate. But the problem with that is that you have, then, if you don’t require people to have insurance, then your choices are, blow up the market, as Margot was talking about because only sick people will have insurance — or put sick people in a separate pool, which they call high-risk pools, which has been done before and which hasn’t worked. Because they’re incredibly expensive, and what we ended up with were high-risk pools that ran out of money.

Florida’s high-risk pool was closed I think since 1991. I mean, it was just, they only had a limited amount of money, and even when people could get in, they often weren’t covered for the thing that got them in. So if you had cancer and you couldn’t get insurance and you got into the high-risk pool, it wouldn’t cover your cancer.

So there have been all kinds of problems with high-risk pools. They could end up being as expensive, if not more expensive, than the subsidies that are being given out now.

So I don’t think they’re going to like the individual mandate, but you know, a lot of people have thought for a long time about ways to keep the insurance market working without it and I haven’t seen one yet.

MARGOT SANGER-KATZ: Well, one idea that I’ve heard discussed, it’s sort of like a weaker version of the individual mandate. So it doesn’t force you to buy insurance but it basically says, as long as you have health insurance and continue to renew your policy — so if you buy health insurance one year, and then you buy it another year, maybe you change jobs, you have to change plans, but as long as you continue to be insured, then if you get sick, the insurance company in the future can’t say, “I don’t want you as a customer.”

But if you go uninsured for some period of time — if you decide, I’m healthy or I don’t have the extra money this year, and you just take a break from having insurance — then when you come back in, you will be shut out. And so that’s another way of creating sort of a financial incentive for people to keep insurance all the time.

You know, that obviously will close a lot more people out of the insurance market then the current system, but I think it will be a way to create some incentive for people to have insurance even when they’re healthy.

JULIE ROVNER: And that actually has had — that has been the law in the employer market since 1996. It was only the individual market — the HIPAA law actually says … people think of it as privacy, but it actually stands for “health insurance portability,” that if you have — if you go from insurer to insurer and you don’t have a break in coverage, you can not only continue to be covered without preexisting condition exclusions but that you can also get into the individual market at the end. But that did not take into account people who were self-employed and buying their own insurance. Which is what the ACA did.

RICHARD LANE: Well then I was just curious, and thank you for the detail, I was really just expressing a concern from afar — and I realize, of course, outside of America we think differently over here in Europe — but we are very, very concerned and interested in your health policy situation. But if you got away from the individual mandate, which I realize is a real possibility, are we seriously expecting that people will — particularly people who are feeling the pinch financially — are going to voluntarily go and get themselves insured when they’re feeling healthy? The obvious concern is that it’s just going to reverse some of the progress that has been made in getting people covered. Surely we’re going to end up with a lot of people uninsured if that individual mandate disappears. Because people just think, “I’m healthy. And by the way I’m not very well off, I can’t afford to buy insurance.”

MARGOT SANGER-KATZ: Well one of the things that we see now with the Affordable Care Act is that I don’t think that the mandate has turned out to be as powerful an incentive as people thought it would. What it looks like is that instead the federal subsidies that help people buy insurance — so, if you’re kind of low- or middle-income you can get some federal dollars that will make your insurance premium cheaper for you and represent a smaller percentage of your income — it seems like that’s mostly where the incentive is. And you know if you think about it, it makes sense. Most people want to have health insurance. They don’t want to be exposed to these big risks of either having a huge financial hit or just not being able to access care if they or someone in their family gets sick. So you know I think that one of the things we’re learning is that if you make insurance affordable for people, a lot of them are going to want to buy it. And there are some people on the margin, clearly, who that little bit of a kind of punishment of “if you don’t buy you’re going to have pay a fine” that creates an incentive too. But it is the structure where there are positive and negative incentives that are part of the Affordable Care Act and if you start to take those away then I think it is much less clear who will continue to buy insurance.

JULIE ROVNER: And plus, we talk so much about these young, healthy people who think that they are invulnerable and that they don’t want to buy insurance. Well, all their parents want them to buy insurance. I hear from a lot of those parents: it’s really like, “I wish my kid had good, comprehensive but not too-expensive policy that I can buy for said kid.” I mean there is a lot of that. So I think Margot is right: the individual mandate has not been as strong as, certainly, the insurers wish that it had been. But I think if they could come up with a way of making insurance less expensive, more power to them.

MARGOT SANGER-KATZ: And I think that’s the argument that Republicans tend to make. That they say that the real problem is not that we haven’t forced people to buy insurance effectively enough. It’s that we haven’t made insurance affordable enough that everyone wants to come into the system. So I think that’s something that we can look forward to in their policies are ideas that are designed to make insurance cheaper. I don’t think that’s so easy, because the reason why health insurance is so expensive in the United States is not because the insurance companies have to cover a lot of benefits, although they do. And it’s not because they’re greedy and they’re hoarding a lot of profits, because they’re not. It’s really because the underlying cost of health care in the United States is just so expensive. We pay a lot of money to doctors and hospitals and drug companies. And we give people a lot of very intensive, high-tech treatments. So that means that it is just expensive to provide health insurance

MARY AGNES CAREY: Sure. But what else will Congress be focusing on next year? The ACA obviously is going to take a lot of steam. Are we going to hear about rising drug prices? We heard about those on the campaign. There are some other must-pass bills that Congress has to do.

JULIE ROVNER: That’s right, there are a number of things that actually Congress has to do next year regardless, because there are laws that expire. One of them, there are user fees that the drug industry and the medical device industry pay for extra people at the Food and Drug Administration so that they can speed up the approval of new drugs and devices. That comes up for renewal next year. That could be a vehicle if they want to do something on drug prices. Although I don’t think that’s as likely as people might’ve been thinking because I think they’re going to take up too much of the bandwidth with the Affordable Care Act. The Children’s Health Insurance Program, which was supposed to sort of fade away under the Affordable Care Act, hasn’t, for a variety of reasons. But when they renewed that two years ago, it was only for two years so that has to be dealt with, whether or not that is going to be continued.

MARY AGNES CAREY: It traditionally has had bipartisan support.

JULIE ROVNER: Right, that was created with bipartisan support, it has had bipartisan support. It will be interesting to see what a Republican president, a Republican Congress thinks of that. It’s covered more than 8 million kids. It’s a very popular program and the states like it. And then, going back to the Affordable Care Act, there were a number of not very popular taxes that got delayed, again though only for two years so they will have to decide again things like the tax on medical device makers, things that actually pay for the Affordable Care Act. And this very controversial tax on very generous health plans, the so-called Cadillac tax. They have to decide whether or not that’s going to happen. … It was delayed to 2020, but employers would need a long lead time to adjust if that’s going to happen.

MARGOT SANGER-KATZ: We’ve seen there’s quite a lot of interest among Republican in Congress in doing some reform of the FDA (Food and Drug Administration), which reviews and approves drugs and devices. They passed some legislation last year, and I think it’s reasonable to think that some version of that will come back.

MARY AGNES CAREY: Richard Lane, I’m going to send the last question to you. Obviously, there are some very important health care issues that might get the short-end of the stick next year on Capitol Hill: health care inequities, global health, the health impacts of climate change. What do you think happens if Congress doesn’t engage on these issues?

RICHARD LANE: Well, I think this is probably as big an issue for the Lancet as the domestic issues are that we’ve just been discussing now and the future of the Affordable Care Act. Because one major concern and one great unknown is — we’ve already had a bit of movement, as we’ve just discussed — about the Affordable Care Act, possibly, we’ll see. But when it comes to the broader issues — the international arena — global health leadership, this is something very close to Lancet’s heart, obviously, and this is something again that we would have been quite optimistic if Hillary Clinton had prevailed given her role in the international health arena already. So the big question mark for us is what does this mean for not just USA as a donor for global health initiatives, through agencies obviously like US AID, CDC and other programs and NGOs that America is involved in. But what is going to happen to that money? And don’t forget just in the last session when Barack Obama … just a year or so ago when he was battling to get increased funding through because of Zika, look at the difficulties Barack Obama had there even getting funding. He didn’t get the funding that was initially asked for. That was when he had the influence to do that. So there are some real concerns. Again, we don’t know the answers yet, but on the global arena — not just to do with foreign policy — but more broadly too and how that will impact on global health. That is a concern to us.

Climate change you just mentioned. I mean, I don’t know if Donald Trump has watered down his view on this in the past 48 hours, but the last time I saw his views on climate change he thought it was a conspiracy invented by China. I mean, it would be laughable, if it wasn’t so serious. I mean there’s scientific evidence of the effects of climate change are just so well-known. And are inextricably linked with health or based in a complex manner. Sure, there are huge question marks that remain and understandably I can see why initially President-elect Trump is focusing on the domestic issues because America has genuine concerns about those. But at the same time, and this is where again where I suppose one could be optimistic, you could argue there could be the potential to influence the policy in this area. So that’s something that we’ll be looking at very closely. I suspect it’s not going to be a priority come Jan. 20.

MARY AGNES CAREY: Well, you’ve given us all lots to talk about in the coming year. I’d like to thank Julie Rovner of Kaiser Health News, Margot Sanger-Katz of The New York Times and Richard Lane of the Lancet. Thank you all.

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