Mara Lee | May 24, 2017
The House’s version of the Affordable Care Act repeal-and-replace bill would leave 23 million more people uninsured and save the federal government $119 billion, according to the Congressional Budget Office. And that has hospitals wondering how they’ll care for those uninsured.
In its highly anticipated scoring of the American Health Care Act, the CBO said the bill, by 2026, would reduce the federal deficit by $32 billion less than an earlier version of the bill that the nonpartisan budget office analyzed.
The savings—critical to the Republican’s strategy to pass the bill in the Senate—are lower because waiver states would receive some funding to help customers who would be faced with higher costs.
The report considers the possibility of three options:
• States that don’t apply for waivers
• States that apply for waivers but don’t allow insurers to charge sick people if their coverage lapses
• States that apply for waivers and return to medical underwriting
Premiums would fall about 10 to 30% in the second group but those savings would come from dropping benefits considered essential by the ACA and people with preexisting conditions would no longer be protected—something Republicans promised would not happen.
In the third group of states, “people who are less healthy (including those with preexisting or newly acquired medical conditions) would ultimately be unable to purchase comprehensive nongroup health insurance at premiums comparable to those under current law, if they could purchase it at all,” the report states. “As a result, the nongroup markets in those states would become unstable for people with higher-than-average expected health care costs.”
Any funding set aside by the bill to fund high-risk pools would not be enough to cover the estimated one in six people that would live in states in the third group.
The House passed the ACA repeal bill earlier this month with just two votes to spare, after making a series of late changes to sway conservative Republicans.
Republicans in the Senate, including Lamar Alexander of Tennessee told The Hill that he wants to see in a Senate bill lower premiums and people with pre-existing conditions covered.
“It’s informative to know the estimated impact of the House health care bill – but the Senate is writing its own bill, which will receive its own score from the Congressional Budget Office before the Senate votes,” he said.
The CBO estimates the bill would make coverage on the individual market unaffordable for up to 23 million people—a slight drop from the initial estimate of 24 million under the first version of the bill. In all, 51 million people under the age of 65 would be without coverage by 2026, including those currently uninsured.
Excluding undocumented immigrants, who are not eligible for subsidies on the exchanges or Medicaid, 8% of the population is uninsured. That would climb to 15% in 2020, the CBO projects.
For providers, the changes to Medicaid are of most concern.
Rick Pollack, president of the American Hospital Association, issued a statement that said: “We cannot support legislation that the CBO clearly indicates would jeopardize coverage for millions of Americans.”
Andrew Gurman, president of the American Medical Association, also responded with a statement that said low-income families on Medicaid would be hardest hit.
The AHCA proposes transforming Medicaid from an entitlement program to one that gives states a set dollar amount for every person eligible for the program. That amount would rise more slowly than the cost of treating patients over time, so as to lessen the federal government’s financial exposure. It’s this per capita cap that results in $834 billion in reduced federal spending on Medicaid in 10 years, as estimated by the CBO.
The CBO estimates that 4 million fewer people will be on Medicaid after the first year the law would be enacted. In 2019, Medicaid coverage would fall by 6 million. In 2020, by 9 million, then 13 million the next year, then 13 million the next, and by 2024, 14 million fewer people will have Medicaid coverage than if Obamacare had been left in place.
“We understand the Republican point of view that the current escalation [in Medicaid spending] is unsustainable for the country,” said Dr. Akram Boutros, CEO of Cleveland’s MetroHealth, which sees about 140,000 Medicaid patients every year. But shifting costs to states, and ultimately, reducing eligibility and cutting payments to providers is not the answer, adding that Medicaid has the slowest growth in spending of any payer.
Less than 1% of MetroHealth’s revenue is from people covered in the individual insurance market. Reining in medical spending growth is a larger problem, he notes.
Boutros noted that hospitals agreed to take a cut on Medicare payment rates with the expectation that 30 million more Americans would be covered by insurance.
The AHCA would increase Medicare disproportionate-share payments to hospitals by $43 billion over 10 years due to a jump in uninsured patients.
MetroHealth’s uncompensated care fell from 11% of revenues to somewhere between 4.5% and 5.5% of revenues, varying over time.
Hospitals in all states that expanded Medicaid benefited similarly, according to a study published last year in JAMA. Not only did those hospitals see more Medicaid revenue and lower uncompensated care compared to hospitals in states that declined the expansion, they had improvements in profit margins as well, the study said.
About 20 million people gained insurance as a result of Obamacare, with more gaining through Medicaid than expected, and fewer through individual plans. About 14.5 million gained coverage through Medicaid, though several million of those were people already eligible through CHIP or Medicaid, but who had not applied.
Republicans have focused on the climbing premiums in the individual market since Obamacare passed—and the losses to insurers and exits of those insurers—as the reason that they must act urgently to repeal and replace the law.
If the AHCA passes in its current form, states could choose whether insurance plans must cover the ACA’s 10 essential health benefits. Insurers could then charge more to cover maternity care and specialty drugs.
Still, according to the CBO, premiums would rise by about 20% in 2018 and 5% in 2019—mostly because insurers could redesign products in states that sought waivers.
The CBO expects individual markets in those states would ultimately fail.
The AHCA depends on penalties for lack of continuous coverage, rather than the ACA’s independent mandate, to prevent people from waiting to buy insurance until they need care. Healthy people would pay less in the underwritten pool and so they could simply buy commercial plans to avoid penalities if they every dropped coverage.
In states that made changes to essential health benefits, but did not return to medical underwriting, the CBO projects premiums would be roughly 20% lower in 2026 than under current law, “primarily because, on average, insurance policies would provide fewer benefits.”
For someone who needed expensive specialty drugs, for instance, the CBO said that their higher out-of-pocket costs would more than outweigh the cheaper premiums.
The CBO believes that in the states that don’t apply for waivers, premiums would be 4% lower than under current law, because the risk pool would skew younger and healthier than it currently does. That’s because the tax credits proposed in AHCA are more generous to young people and less generous to those past 50, especially those with lower incomes. The AHCA also changes the differential insurers are allowed to charge the oldest customers from 3 times the youngest customers’ premiums to 5 times.
Source: Modern Healthcare
http://www.modernhealthcare.com/article/20170524/NEWS/170529948?utm_source=modernhealthcare&utm_medium=email&utm_content=20170524-NEWS-170529948&utm_campaign=dose