TheAmericanHealthCareAct:ImplicationsfortheACAandMedicaid

Presentation by:

Champaign County Health Care Consumers (CCHCC)

March 20, 2017

Champaign Public Library

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• Grassrootsconsumerhealthadvocacyorganizationthathasbeenfightingforhealthcareaccessandjusticesince1977.

• Uniqueorganizationthatdoesboth directservicesandcommunityorganizing.

• CCHCCisa501(c)(3)non-profitorganization.

• CCHCCisnon-partisan.Weadvocatebasedonpolicy,notpolitics.

AboutHealthCareConsumers

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OverviewoftheAffordableCareAct*

*FullnameisPatientProtectionandAffordableHealthCareAct*AlsoknownastheACA

*Alsoknownas“Obamacare”

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• Signedintolawin2010.

• Designedtoreformthehealthcaresystembyexpandingaccesstoaffordablehealthinsurance andimprovinginsurance.

• 50millionuninsuredAmericansatthetimeitwaspassed.

• Itisnot “government-runhealthcare”– healthcareandinsurancestillprovidedbyprivatecompanies(thegovernmenthasnottakenoverthosecompanies).

AbouttheAffordableCareAct(ACA)

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• Expandhealthinsurancecoveragetomillionsofuninsured.

• Improvecoverageforthosewhoalreadyhad/havehealthinsurance.

• Improveaccessto,andqualityof,care.

• Improveaccessto,andaffordabilityofpreventivehealth.

• Controlrisinghealthcarecosts.

GoalsoftheACA

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• Allowedadultchildrenuptoage26togetontheirparents’healthinsurance.

• ExpandMedicaidtocoveradultswhomeetincomecriteria(138%FPL):650,000adultsinIllinois.

• CreatetheMarketplace(healthcare.gov)wherepeoplecanpurchaseaffordableprivatehealthinsuranceplansandqualifyforfinancialassistanceintheformoftaxcredits.

WhattheACAhasdonetoexpandcoverageandmakeitaffordable

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• Taxcreditsthathelpreducethecostofmonthlypremiumsareavailableforpeopleearningupto$48K.335,000onMarketplaceinIllinoisand78%gettaxcredits.

• Taxcreditsarepeggedtoincomelevelanddesignedtoensurethatpeoplegetenoughassistancesothattheydonotspendmorethan9%oftheirincomeonpremiums.

• AgeRatinglimit– Insurancecompaniescanonlychargeolderpeople3xtheamountthatischargedforyoungerpeople.

HowtheMarketplace(healthcare.gov)makesinsuranceaffordable

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• TheACAhasimprovedhealthinsuranceforeveryone,includingthosewithemployer-basedhealthplans,aswellasthosewithindividualplans

• HealthinsuranceplanshavebeenimprovedbecausetheACAsetnewstandardsandprotectionsforallhealthplans

HowtheACAhasimprovedhealthinsuranceforeveryone

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SettingActuarialStandards:

- ActuarialStandardsrefertolevelsofcoverage(i.e.,whatpercentofyourhealthcostswillyourhealthinsuranceplancover).

- “Metal”LevelsintheMarketplace– seta“floor”forcoverageofabout60%(Bronzeplans),meaningthathealthinsurancehastobeabletocoveratleast60%ofthehealth

- Alsocreatedstandardsforemployer-basedhealthplansthroughthe“EmployerMandate”

HowtheACAhasimprovedhealthinsuranceforeveryone– cont’d.

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EnactingNewStandardBenefits:– Allowsadultchildrentoremainontheirparents’healthinsurancepolicyuntilage26

– Certainpreventiveservicesarecoveredatnocostincludingwell-carevisits– thisistrueforALL formsofhealthinsurance– whetherprivateplans,employerbasedplans,andMedicare. Thisisveryimportantforencouragingpreventivecare,whichleadstoearlydetection,prevention,andtreatmentofmanyhealthconditions– whethercancer,highbloodpressure,diabetes,etc.

– ContraceptivecoverageandSTItesting/counselingwithnoco-pays

HowtheACAhasimprovedhealthinsuranceforeveryone– cont’d.

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EnactingNewProtections:– Noannualorlifetimecapsorlimits– Insurancecompaniescannotdropcoveragebecauseofillness(rescissionprohibited)

– Peoplewithpre-existingconditionscannotbedeniedinsuranceorchargedmore(2010forchildrenand2014foradults)

–Medicallossratio(80%ormoreofyourpremiumdollarsmustbeusedtopayforcareyoureceive)

– Out-of-pocketmaximumlimitsforconsumers.

HowtheACAhasimprovedhealthinsuranceforeveryone– cont’d.

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HowtheACAhasimprovedhealthinsuranceforeveryone– cont’d.

EssentialHealthBenefitsRequirements:Employer-basedplans(thrutheEmployerMandate),privateplans,Medicaid,andMarketplaceplansmustinclude10EssentialHealthBenefitsataminimuminordertobeconsideredQualifiedHealthPlans(QHPs)

• Ambulatorypatientservices• Emergencyservices• Hospitalization• Maternityandnewborncare• Mentalhealthandsubstance

usedisorderservices,includingbehavioralhealthtreatment(thisincludescounselingandpsychotherapy)

• Prescriptiondrugs• Rehabilitativeand

habilitativeservicesanddevices

• Laboratoryservices• Preventiveandwellness

servicesandchronicdiseasemanagement

• Pediatricservices11

EnactedtheEmployerMandate:• Employerswith50+employeesmustcomply• Healthinsurancemustbeatleastequivalentto“Bronze”plan(60%actuarialvalue)

• Premiumsmustbe“affordable”(nomorethan9%ofincome)

• MustbeaQualifiedHealthPlan(QHP)thatmeets10EssentialHealthBenefits

HowtheACAhasimprovedhealthinsuranceforeveryone– cont’d.

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- TheACAenactedarequirementthathealthinsurancecompaniessellpoliciestoeveryone,regardlessofPre-ExistingConditions.- Healthinsurancecompaniescouldnotdiscriminatebydenyingcoverageorchargingmore forcoverageforsomeonewithapre-existingcondition.- Thiscreated“guaranteedissue”healthinsurance;youareguaranteedtogetthehealthplan,despitepre-existingconditions.

TheACAandPre-ExistingConditions

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- Insurancecompanieswereunsurehowtosetpremiumsforplans,whichwouldnowbe“guaranteedissue”– noonecouldbeturneddownforcoverageorchargeddifferentforcoverageiftheyhadaPre-Existingcondition.

- WhatprovisionsoftheACAmake“guaranteedissue”healthinsurancepossible?

TheACAandPre-ExistingConditions–cont’d.

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TheIndividualMandate:

• Thisisthe“taxpenalty”thatpeoplefaceundertheACAiftheydonotpurchasehealthinsurancecoverage.

• ThepurposeoftheIndividualMandateistomakesurethathealthypeople– notjusthighly-motivatedsickpeople– purchasehealthinsurance.

• Thisimprovestheinsurance“riskpools”andhelpslowercostsofpremiumsforeveryone.

TheACAandPre-ExistingConditions–cont’d.

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PremiumTaxSubsidiesintheMarketplace:

- Thesetaxsubsidieshelpreducethecostofhealthinsurancepremiumssothatpeoplecanaffordtheirmonthlyinsurancepremiums.

- Premiumtaxsubsidiesarebasedonincomeandgeographiclocation(localmarket)andthegoalistokeephealthinsurancecosts“affordable”–9%orlessofone’sincome.

- Ifhealthinsurancepremiumsrise,thetaxsubsidiesalsorise.

TheACAandPre-ExistingConditions–cont’d.

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Fundingfor“RiskCorridors”:

• AprovisionoftheACAthathelpedprovidefundstohealthinsurancecompaniesiftheylostmoneyasaresultofprovidingcoverageintheMarketplace.

• WhentheACAstartedrequiringinsurancecompaniestosellpoliciestoeveryone(evensickpeoplewithpre-existingconditions),thosecompanieswerecaughtinatoughspot.Theydidn’tknowhowmuchtochargeinpremiumstocoverexpensesforallthosenewpolicies.

TheACAandPre-ExistingConditions–cont’d.

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Fundingfor“RiskCorridors”– cont’d:

• TheACAsetupathree-yearperiod,from2014to2016,duringwhichthegovernmentwouldspreadtheriskforinsurersinthenewlaw’smarketplaceswhiletheyadjustedpremiums.Thisprogramisknownasriskcorridors.

• RiskCorridorsarenot“bailouts”– theyarefundingmechanismstostabilizeinsurancemarkets.ThesewereusedunderthelawthatcreatedtheMedicarePartDprogram.

TheACAandPre-ExistingConditions–cont’d.

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Fundingfor“RiskCorridors”– cont’d:

• SpendingbillpassedinCongressinDecember2014de-funded the“RiskCorridor”,thankstoSen.MarcoRubioandthen-SpeakeroftheHouse,JohnBoehner.

• Resultsofde-fundingthe“RiskCorridor”includenon-profithealthinsurancecompanieshavingtoshutdown,andseveralinsurersleavingcertaingeographicmarketsintheMarketplace.

• Thisalsoledtoincreaseinpremiumsin2017.

TheACAandPre-ExistingConditions–cont’d.

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De-Funding“RiskCorridors”:

TheACAandPre-ExistingConditions–cont’d.

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De-Funding“RiskCorridors”:

TheACAandPre-ExistingConditions–cont’d.

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Expandhealthinsurancecoveragetomillionsofuninsured.• ThemaingoaloftheACAwastoexpandcoveragetotheuninsured.

• ThankstotheACA,ournation’suninsuredrateisatthelowestithaseverbeeninthehistoryofournation.BeforeACA,16%ofAmericanslackedhealthinsurancecoverage.Nowthatratehasbeencutinhalf.

• Over20millionpeoplewhopreviouslydidnothavecoverage,arenowcovered.

ExpandingHealthInsuranceCoverage—in2014IstheACAaccomplishingitsgoals?

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Improvecoverageforthosewhoalreadyhad/havehealthinsuranceandforallwithpre-existingconditions.• 27%ofadultsunderage65havepre-existingconditionsthatin

thepastwouldhavemadethem“uninsurable”orwouldhavemadetheircoverageunaffordable.Thisismorethan130millionpeople.

• Alltheotherprotectionsmakeitsothatinsurancecompaniescannotrescindyourpolicywhenyougetabaddiagnosis,andtheycan’tplaceannualorlifetimecapsonhowmuchtheywillcoverfinanciallyforthecarethatyouneed.

• Healthinsuranceisnow“guaranteedissue”- youdon’tneedtofilloutahealthhistoryforminordertoapplyforcoverage,andyou,andyourpre-existingconditionsmustbecovered.

ExpandingHealthInsuranceCoverage—in2014IstheACAaccomplishingitsgoals?– cont’d.

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Improveaccessto,andqualityof,care.• Millionsofpeoplearenowgettingpreventiveandprimarycare.

• Medicarehasdocumentedsignificantimprovementsinqualityofcare.

Improveaccessto,andaffordabilityofpreventivehealth.• 137millionpeoplenowbenefitfrompreventiveserviceswithoutthecostofco-pays.

ExpandingHealthInsuranceCoverage—in2014IstheACAaccomplishingitsgoals?– cont’d.

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Controlrisinghealthcarecosts.• ThankstotheACA,wehavebeguntobendthecostcurveon

Medicare– costsarenotincreasingatthesamerateastheyhadbeenbeforetheACA.And,asaresult,wehaveextendedMedicare’ssolvencyby11years.

• Rateofpremiumincreaseshasdecreasedsignificantlyforthefirsttime.Recentpremiumincreasesforjob-basedplanshavebeenbelow5percentonaverage,lessthanthehistoricaltrendandfarloweronaveragethanpremiumhikesforindividualinsurance.

• Forconsumers,wenolongerseemedicalbillsleadingtobankruptcylikeweusedto.Medicalbillsusedtobethe#2reasonforbankruptcyinournation,and80%ofthosefilingforbankruptcybecauseofmedicalbillshadhealthinsuranceatthetimetheyincurredthosebills.

ExpandingHealthInsuranceCoverage—in2014IstheACAaccomplishingitsgoals?– cont’d.

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W/outtheACA,2017PremiumsWouldBe30-50%Higher

ExpandingHealthInsuranceCoverage—in2014IstheACAaccomplishingitsgoals?– cont’d.

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ACA“RepealandReplace”

TheHouseRepublicanhealthcarebill:

TheAmericanHealthCareAct*

*Alsoknownas“TrumpCare”or“RyanCare”ortheGOPACA

ReplacementPlan27

ACA“repealandreplace”

Whatwasthe“healthpolicy”languageyouheardabouttheACA“repealandreplace”?• Covermorepeople.• Makecoveragemoreaffordable(reducepremiumsanddeductibles).

• ThemostsignificantimpactoftheAHCAwasnotdiscussedduringthecampaign– 25%cuttingandcappingofMedicaidtopayfor$860billiontaxcut.

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TheHouseGOP’sAmericanHealthCareAct

OnMonday,March5,2017theHouseRepublicansunveiledtheirplantorepealandreplacetheACA:theAmericanHealthCareAct(AHCA).

TheHouseRepublicansplantovoteonthisbillonThursday,March23,2017.

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KeyFeaturesoftheAHCA

TheGOP’sAmericanHealthCareAct:• MedicaidExpansion“freezes”in2020• RemovalofEssentialHealthBenefitrequirementsforMedicaidplans.

• MedicaidFundingchangesfromEntitlementtoaPerCapitaCap

• Permanentlycuts$880billion– or25%- fromtheMedicaidprogram,andthencapsittopayfortaxcuts.

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KeyFeaturesoftheAHCA– cont’d.

TheGOP’sAmericanHealthCareAct:• EndsCost-SharingReductionsandcutsACATaxCredits

• Olderpeoplecanbecharged5timesasmuchasyoungerpeople

• ChangeinActuarialValuerequirementandremovalofmetallevels(e.g.,“Silver”Plan).

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KeyFeaturesoftheAHCA– cont’d.

TheGOP’sAmericanHealthCareAct:• NoIndividualMandate– insteadacontinuouscoveragerequirement

• NoEmployerMandate• CutsFederalFundingtoPlannedParenthood• TaxCutstoWealthy,Insurers,PharmaceuticalCompanies,MedicalDevice,TanningSalons

• Taxcutstothesetotal$860billion.(Thisappearstobeataxbillmasqueradingasahealthcarebill.) 32

KeyFeaturesoftheAHCA– cont’d.

TheGOP’sAmericanHealthCareAct:

• Slashesthebilliondollarpreventionfund,PreventionandPublicHealthFund,whichcomprisesabout12%ofCDCbudget.

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AHCAandTaxCredits

EndstheACA’staxcredits,whichwerebasedonincome,startingin2020andreplacesthemwithtaxcreditsthatonlygoupwithage.

•TheACApegstaxcreditstoincomelevelsand,whenpremiumsrise,thosetaxcreditsrisealongwiththem,protectingconsumersagainstincreasesinmedicalcosts.

•TheAHCAprovidesaflat-ratetaxcreditbasedonage,andthetaxcreditrangesfrom$2,000/yr.forpeopleunder30to$4,000/yr.forpeopleover60.

•Taxcreditsarenot adjustedforlocalcostofliving.

•Insurancewillbecomeunaffordableforlower-income. 34

AHCAandTaxCredits

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AHCAandTaxCredits– cont’d.ExamplesofchangesintaxcreditsunderGOPplan:

•InChampaignCounty,a27-yearoldwithanincomeof$20,000wouldgetanACAtaxcreditof$3,660.UndertheGOPplan,theirtaxcreditwouldbe$2,000.

•InChampaignCounty,a60-yearoldwithanincomeof$20,000wouldgetanACAtaxcreditof$11,010.UnderGOPplan,theirtaxcreditwouldbe$4,000.

•InChampaignCounty,a60-yearoldwithanincomeof$40,000wouldgetanACAtaxcreditof$7,890.UndertheGOPplan,theirtaxcreditwould$4,000.

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AHCAandTaxCredits– cont’d.

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AHCAandOlderAmericans

TheAHCAimposesan“agetax”byallowinghealthinsurancecompaniestochargemuchmoreforolderpeople(ages50– 64).

•TheACAallowsinsurancecompaniestochargeolderpeopleupto3timestheamounttheychargeforyoungerpeople.

•TheAHCAallowsinsurancecompaniestochargeolderpeopleupto5timestheamounttheychargeforyoungerpeople.

•AndtheAHCAonlyoffers2:1taxcreditrateforolderpeoplecomparedtoyoungerpeople ($4,000vs.$2,000)

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AHCAandOlderAmericans

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AHCA– Individual&EmployerMandates

TheAHCAimmediatelyeliminatestheACA’sIndividualMandateandtheEmployerMandate(morethan50employees).• Endingtheindividualmandate,combinedwithkeepingcoverageforpre-existingconditionsandloweringtaxcreditswillleadtohigherpremiumsandmorepeopledroppingout.

• EmployerswillnolongerberequiredtoofferplansthatmeetcriteriaundertheACA’sEmployerMandate.

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AHCA– ContinuousCoverage&HighRisk

Hikeshealthcarecostsforpeoplewithpre-existingconditions.• Insurancecompaniesmustchargeanyonewhohasnotbeeninsuredfor63daysa30%surchargeontheirpremiums.

• Setsupa“Patientandstatestabilityfund,”whichcanfundstatehigh-riskpools,forpeoplewhoneedcostlymedicalcare.The35-yearhistoryofstatesattemptinghigh-riskpoolsresultedinhigh-premiums,high-deductiblesandlong-waitinglists.

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AHCA- Medicaid

TheAHCAendsthecurrentfinancingstructureofMedicaid.

TheCBOestimatesthatseveralmajorprovisionsaffectingMedicaidwoulddecreasedirectspendingby$880billionover2017-2026andresultin14millionindividualslosingMedicaid.

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AHCA– Medicaid,cont’d.

1.AHCAImplementsaPerCapitaCapSince1965,Medicaidhasoperatedasafederal- statepartnershipwherestatesreceiveonaverage63%ofthecostsofMedicaidfromthefederalgovernment.Thefederalshareisbasedonactualcostsofprovidingservices.AHCAlimitsthefederalcontribution,basedonastate’s2016expendituresinflatedataratethatisprojectedtobelessthantheyearlygrowthofMedicaidhealthcarecosts.SostartingJanuary1,2020,fundingforstateMedicaidprogramswillshrinkovertime,resultinginstatescuttingcoverageandservicesforallbeneficiaries.

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AHCA– Medicaid,cont’d.

2.RepealsMedicaidExpansion.AHCAeffectivelyrepealstheMedicaidexpansiononJanuary1,2020byeliminatingtheenhancedfederalfundingforstatestoenrollnon-pregnantchildlessadults.ItalsorequiresthoseintheMedicaidexpansionpopulationtosubmiteligibilityrenewalpaperworkeverysixmonthsjusttostayonMedicaid,beginningOctober1,2017.Thus,statescancontinuetocoverthisgroup,butonlyatregularmatchingratesand,this,coupledwiththestringentre-determinationrequirementsforthisgroup,willeffectivelyrepealthecoverage(CBOestimatesonly5percentwillbeleftinthisgroupby2024).

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AHCA– Medicaid,cont’d.

3.RepealsMandatoryMedicaidCoverageforChildrenages6-18over100%FPL.TheACArequiresstatestoprovideMedicaidcoveragetoallchildrenagesfrombirthtoage19under138%oftheFederalPovertyLevel(FPL).PriortotheACA,stateshadtocoverchildrenages0-5yearsoldupto133%FPLbutstatesonlyhadtocoverchildrenages6-19(orupto21atstateoption)upto100%FPL.AHCAlowerstheeligibilitylevelforchildrenages6-19from133%FPLbackto100%FPL.Thismeansthat(insomestates)childrenmaylosetheirMedicaidandcanonlybeenrolledinCHIPorbeuninsured.ThesechildrenmaygetfewerbenefitsthanonMedicaidandmaynotreceiveallservicestheyneedtocorrectoramelioratetheirmedicalormentalhealthconditions.45

AHCA– Medicaid,cont’d.

4.RepealsPresumptiveEligibilityfortheMedicaidExpansionPopulationandRepealsHospitalPresumptiveEligibilityforEveryone.InadditiontorepealingtheMedicaidexpansion,AHCApreventsstatesfromusing“presumptiveeligibility”fornon-pregnantchildlessadultsafterJanuary1,2020evenifastatechosetocontinuecoveringnon-pregnantchildlessadultsunderitsregularMedicaidfunding.Further,AHCArepealstheabilityofstatestouseHospitalPresumptiveeligibilitytoenrollanyindividualinMedicaid. 46

AHCA– Medicaid,cont’d.

5.EliminatesRetroactiveEligibility.Medicaidcurrentlyprovidescoverageuptothreemonthsbeforethemonthanindividualappliesforcoverage.This“retroactivecoverage”protectsindividualsfrommedicalexpensestheyincurredbeforetheyapplyforMedicaid.AnindividualmaynotbeabletoapplyforMedicaidimmediatelyduetohospitalization,adisability,orothercircumstancesandretroactivecoverageprovidesthatcriticalcoverageandensuresproviderscangetreimbursedfortheircostsandlow-incomeindividualsdonotendupfacingseveremedicaldebtorbankruptcyduetothesemedicalexpenses.AHCArepealsthiscoverageforallMedicaidbeneficiariesstartingOctober1,2017.

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AHCA– Medicaid,cont’d.

6.ImposesStricterCitizenshipVerificationRequirements.CurrentlyMedicaidapplicantsmustprovidedocumentationoftheircitizenshipornationalitytoenrollinMedicaid,butcanaccesshealthcareserviceswhilewaitingforverification.Beginning6monthsafterthisbillisenacted,AHCAwouldpreventstatesfromobtainingreimbursementforanyservicesreceivedwhileanindividualisobtainingthenecessarydocumentation(calleda“reasonableopportunityperiod”)eveniftheindividualmeetsallotherMedicaideligibilityrequirementsandatteststohisorhercitizenshipstatus.Itislikelythatstateswillalsoelecttodelayeligibilityuntilafterdocumentationisverifiedsotheydonothavetopay100%ofthecostsduringthereasonableopportunityperiod.

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AHCA– Medicaid,cont’d.

7.ImposesNewFinancialLimitsonMedicaidWaivers.StatesmayseekwaiversfromthefederalgovernmentallowingthestatetostophavingtofollowcertainfederalMedicaidrequirementssothestatecantestexperimental,pilot,ordemonstrationprojectsthatpromotetheobjectivesoftheMedicaidprogram.Normally,stateswouldhavetoensurethiswouldbe“budgetneutral”tothefederalgovernmentoverthecourseofthewaiverperiod(typicallyfiveyears),thus,canspendmorefederalfundsupfronttobuildnewinfrastructureorprovidemoreintensiveservices.AHCAtakesawaystates’flexibilitytospendthesewaiverfundsupfrontbyimposingyearlybudgetcaps. 49

AHCA– Medicaid,cont’d.

8.RepealsEssentialHealthBenefits(EHBs)forMedicaidExpansionBeneficiaries.UndertheACA,statesthatexpandedcoveragetonon-pregnantchildlessadultshadtoprovidecoverageinatleastthe10“essentialhealthbenefit”categories.AHCArepealsthisrequirement,whichwillnolongerapplyafterDecember31,2019,resultinginbeneficiarieslosingservicessuchasmentalhealthandsubstanceusedisorderservices,andlosingaccesstosomefreepreventivehealthservices. 50

AHCA– Medicaid,cont’d.

9.RepealsEnhancedFundingforStatesforCommunityFirstChoice(CFC)AttendantSupports.EstablishedundertheACA,the"CommunityFirstChoiceOption"allowsStatestoprovidehomeandcommunity-basedattendantservicesandsupportstoeligibleMedicaidenrolleesundertheirStateMedicaidPlan.CFCfundsassistindividualswithActivitiesofDailyLiving(ADLs),habilitativeservicesandemergencyback-upsystemslikeelectronicindicators.CFCalsogivesstatestheoptiontocovermanyofthecostsoftransitioningindividualsfrominstitutionalcaretosupportedcommunityliving,includingrentdeposits,movingexpensesandsomenonmedicaltransportation.Someoftheseservicescomplimentthetransitionservices.AHCArepealsthe6%increaseinfundsestablishedtocovertheseservicesstartingJanuary1,2020.

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AHCA– Medicaid,cont’d.

10.LimitsHomeEquityExclusions.Currently,individualsneedingnursinghomeorotherlong-termcareservicesmusthavehomeequitybelowacertainlimittoqualifyforthoseMedicaidservices.Statescanexcludeupto$750,000oftheseindividuals’homeequity.AHCAprohibitsstatesfromexceeding$500,000ofhomeequity,starting6monthsafterthebillisenactedintolaw,potentiallylimitingtheavailabilityofnursinghomeandotherlongtermcareservicestoindividualswhomayliveinhigh-costareasandhavesubstantialhomeequitybutlimitedincomeandotherassets.

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FiveConsequencesofChangingMedicaid’sFinancingStructure

1. Fundingwillnotkeepupwithneed,burdeningstatebudgets.Ofcourse,ILisinpeculiarpositionofhavingnobudget:(

2. Medicaidwillnolongerrespondautomaticallytoeconomicdownturns.

3. Stateswillbeunderpressuretocutbenefitsandreimbursements.

4. Statesmaycuteligibility,pittingvulnerablepopulationsagainsteachother.

5. Thesafetynetwillbeinconsistentacrossstates.53

The“StateMedicaidFlexibility”Argument

•ProponentsoftheHouseGOPplansforMedicaidarguethatBlockGrantsorPerCapitaCapsareneededtogivestatesmore“flexibility.”

•Statesalready haveflexibilityintheMedicaidprogram.StatescanchoosetohaveMedicaidcoveradultdentalcare,prescriptiondrugs,etc.Also,statescanapplyforwaiverstodoinnovativeprogrammingsuchasaddressingtheopioidcrisis,etc.

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The“StateMedicaidFlexibility”Argument– cont’d.

•AsGovernorJohnBelEdwardsofLouisianaexplained,“Undersuchascenario,flexibilitywouldreallymeanflexibilitytocutcriticalservicesforourmostvulnerablepopulations,includingpoorchildren,peoplewithdisabilities,andseniorsinneedofnursinghomeandhome-basedcare.”•ThekindofflexibilitytheGOPistalkingaboutisgivingstatesflexibilityto,forexample,putworkrequirementsonMedicaidbeneficiaries,orcutcertaingroupsorformsofcareoutofcoverage.•“Stateflexibility”isjustaTrojanHorseforpassingthebuckandwehavetoresistit.

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AHCA– ImpactonMedicare

ImpactonMedicare:•AHCAwouldcutseveralyearsfromthelifeoftheMedicareTrustFund(ACAextendeditby11years).LifeofMedicarereducedby30%.•Overtime,wouldincreasecostsoftheMedicareprogramasmorepeoplewould“arrive”intoMedicaresicker andneedingmorecostlycarebecauseofpreviousyearsspentbeingunabletoaffordhealthinsurance.•Whenthathappens,GOPwillpushtoturnMedicareintoa“voucher”programinordertosavemoneyforthefederalgovernment.

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AHCA– MoreEffects

Pushespeopleintohighdeductiblehealthplans,throughseveralprovisions.• Allowsinsurancecompaniestosellcatastrophicplans,endingtherequirementthatplanscoverasetpercentageofmedicalcosts– theACA’splatinum,gold,silverandbronzeplans.

• EndstheACA’scost-sharingsubsidiesthatlimitoutofpocketcostsforpeoplewithmoderateincomes.

• Increasestaxbenefitsofhealthsavingsaccounts,whichareusuallyhighdeductibleplansthatonlyworkifyouarerichenoughtosavemoneyoutofyourpaycheck.

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AHCA– ImpactonWomen

Willhurtwomen.• DefundsPlannedParenthood– noMedicaidpaymentstoPlannedParenthoodorothersimilarwomen’shealthclinics.

• Willnotallowtaxcreditsforindividualplansthatprovidecoverageforabortionservices.Therefore,mosthealthinsuranceplanswillcutthiscoverage.

• Startingin2020,willnotrequireplanstomeetthe10EssentialHealthBenefitsrequirements,whichincludematernity/prenatalcare,preventiveservices,andprescriptiondrugcoverage.

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AHCA– TaxBreaksforWealthy

Hugetaxbreaksforthewealthyandfordrug,insurance,medicaldevicecorporations,andtanningsalons.• EndstheACA’staxesonunearnedincomeforpeoplewithhighincomes.

• Thetop0.1%ofhouseholds— thosewithincomeofatleast$3.7millionayear— wouldreceiveataxcutofabout$197,000in2017,onaverage.

• EndstheACA’staxesoninsurance,drugandmedicaldevicecorporations.

• EvenendsanACAprovisionthatlimitedinsurancecompaniesfromwritingoffhighexecutivesalaries. 59

AHCA– WhatitmeansforIL’s13th District

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AHCA– WhatitmeansforIL’s13th District

FromTableofCBOCoverageLossbyCongressionalDistrict:• TotalCoverageLoss(non-elderly):51,200• Medicaid(non-elderly)total:32,700• MedicaidAdults:6,200• MedicaidChildren:13,200• MedicaidDisabled:1,700• MedicaidExpansion:11,600• MedicaidElderly:2,500• Employer-SponsoredInsurance:15,800• ExchangesandOtherCoverage:2,700

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OppositiontoAHCA

• AARP• AMA• America’sEssentialHospitals• FederationOfAmericanHospitals• AmericanCollegeOfPhysicians• AmericanCancerSociety• AmericanLungAssociation• ConsumersUnion• J.MarioMolina,CEOOfMolinaHealthcare

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InSummary:ACAvs.AHCA

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TheCongressionalBudgetOffice(CBO)ReportontheAHCA

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AbouttheCBOreport

• Thenon-partisanCongressionalBudgetOfficeandthestaffoftheJointCommitteeonTaxation(JCT)haveproducedanestimateofthebudgetaryeffectsoftheAmericanHealthCareAct.

• ReportwasissuedonMonday,March13,2017.• Summaryofthereport:TheAHCAwouldincrease

costs forconsumerswhileprovidingless coverage.TheAHCAwouldbenefitthehealthyandwealthy.

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AbouttheCBOreport– cont’d.• In10years,atotalof24millionmorepeoplewillbeuninsured undertheAHCAthanisprojectedundercurrentlaw.TheuninsuredrateundertheHouseRepublicans'billwillbehigherthanbeforetheACAwaspassed.

• $880billiondollarswillbecutfromtheMedicaidprogramthrougheliminationoftheMedicaidexpansionandafundamentalrestructureoftheMedicaidprogram.Thismassive,unprecedentedcostshifttostatesmeans14millionpeoplewillloseMedicaidcoverage andmillionsofseniors,disabledindividuals,andothervulnerablepopulationswhorelyontheprogramwillbeatrisk. 66

AbouttheCBOreport– cont’d.

Premiumsandout-of-pocketcostswillincrease,particularlyforolderadultsandthosewithlowerincomes.Atthesametime,plansavailableonthemarketplacewillbelesscomprehensive thantheyaretoday—meaningindividualswillbepayingmoreforless.

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CBOReport:UninsuredUninsured:UndertheAHCAbill,thenumberofuninsuredpeoplewillskyrocketanddramaticallyincreaseovertime:• By2026,24millionmorepeoplewillbeuninsured thanundercurrentlaw.Thismeansthatin2026,52millionpeoplewouldbeuninsured.

• In2018alone,14millionmorepeoplewillbeuninsuredthanwouldbeundercurrentlaw.

• By2020,roughly17percentofnon-elderlyadults(or48millionpeople)willbeuninsured.Thatis21millionmorepeoplethanwe’dseeundertheAffordableCareAct.

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CBOReport:OutofPocketCosts

Out-of-PocketCosts:Planswillcoveralowershareofhealthcarecosts,soconsumerswillfacehigherdeductiblesandcost-sharing.Low-incomeconsumerswillbeparticularlyaffectedbythesehigherout-of-pocketcosts.

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CBOReport:Premiums

Premiums:Premiumswillsignificantlyincreaseforolderandlow-incomeconsumers,leavingmanywithnooptionforaffordablecoverage.

• Astarkexampleincludedintheanalysisshowsthata64-yearoldmaking175percentofthefederalpovertylevel(or$26,500ayear)willseehisorheryearlypremiumincreasenearly$13,000.

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CBOReport:TaxBreaks

TaxBreaks:Thisbillisagiveawaytowealthyindividualsandcorporations:Thelegislationwouldprovidenearly$600billionintaxbreakstohigh-incomeearnersandhealthinsurers.

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CBOReport:ImpactbyTypesofCoverage

TypesofCoverage:Thisbillwillnegativelyimpactpeoplewithalldifferenttypesofhealthcoverage.In2020,comparedtocurrentlaw:

• 9millionfewerpeoplewillhavecoveragethroughtheindividualmarket

• 9millionfewerpeoplewillbecoveredthroughMedicaid

• 2millionfewerpeoplewillhavecoveragethroughtheiremployer

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CBOReport:CostShifttoStates

CostShifttoStates:Thisbillwouldcut$880billioninfederalMedicaidspendingover10years,passingthosecostsontostates.• CappingandcuttingMedicaidwillaffecteverystate,whetheritexpandedcoverageornot.

• By2026,federalMedicaidspendingwillbecutby25percent.Withcutsofthatmagnitude,everystatewillbeaffected.

• CBOevenacknowledgesthatstateswillbeleftmakingharddecisions.

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CBOReport:StateEconomies

StateEconomies:FederalfundsmakeupmorethanhalfofstateMedicaidbudgets.Taking$880billionoutofstateeconomieswillhaveasignificantrippleeffectandeverystatewillbehitatsomelevel.• Theeconomicimpactofan$880billionfederalfundingcuttostateswouldbefeltinemploymentlosses,reducedbusinessactivity,andstateandlocaltaxlosses.

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Whatyoumightbehearing:Sortingfactfromfiction

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SortingFactfromFiction

Fiction: TheAHCAwillbringdownpremiums• PremiumswouldactuallyriseforolderAmericans• PricingforolderAmericanswouldgofrom3:1comparedtoyoungerpeople,to5:1

• Andsubsidieswouldbecappedat$4,000,whichisa2:1ratiotothatofyoungerpeople

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SortingFactfromFiction• In2018and2019,accordingtoCBOandJCT’sestimates,averagepremiumsforsinglepolicyholdersinthenon-groupmarketwouldbe15percentto20percenthigherthanundercurrentlaw,mainlybecausetheindividualmandatepenaltieswouldbeeliminated,inducingfewercomparativelyhealthypeopletosign up.

• Startingin2020,premiumsmay dropasaresultofchangestoindividualmandateandemployermandate– cheaperplanswithlesscoveragewillbeoffered (eliminationofactuarialminimumrequirement) 77

SortingFactfromFictionFiction:Themarketis“collapsing”orisina“deathspiral”• TheCBOreportdispelsRyan’sassertionthatthelawiscollapsingupfrontonpage2:“InCBOandJCT’sassessment,however,thenon-groupmarketwouldprobablybestableinmostareasundereithercurrentlaworthelegislation.”

• Withthisfinding,theCBOjoinsexpertsacrossthehealthcareindustryindismissingafavoriteGOPtalkingpointthatthelawisina“deathspiral”.

• AnalystsatS&P,CMSOfficeofActuaryagreewithCBO.• 4Millionnewpeopleboughtcoveragein2017. 78

SortingFactfromFiction

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SortingFactfromFictionFiction:Themarketis“collapsing”– cont’d.

TheAHCAbycontrast,wouldcreateastablemarketonlybymakingitnearlyimpossibleforolderadultsandthesicktofindaffordablecoverage,leavingonlythehealthyorwealthyinthemarket.

Inessence,undertheAHCA,thepeoplethatneedhealthinsurancethemostwouldbecutoutofthemarketentirely.

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SortingFactfromFictionFiction: HealthInsurancePremiumsarerisingandbecomingunaffordable• Healthinsurancepremiums on marketplacescreatedbythelawdidincreasemarkedlythisyearinmanypartsofthecountry asinsurersdealtwithhigher-than-expectedmedicalclaimsfrompatients.

• Butmostconsumersarestillabletogethealthplansforlessthan$100amonthonthemarketplaces, thankstoinsurancesubsidiesmadeavailablebytheACA.

• 84%inMarketplaceshad0%costincreases.

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SortingFactfromFictionFiction: HealthInsurancePremiumsarerisingandbecomingunaffordable– cont’d.• HealthcarecostsintheemployermarketandinMedicarehavebeenrisingathistoricallylowlevelssincetheenactmentofthe2010healthlaw.

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SortingFactfromFictionFiction: HealthInsurancePremiumsarerisingandbecomingunaffordable– cont’d.• In2016,forexample,annualfamilypremiumsforemployer-sponsoredhealthinsuranceroseanaverageofjust3%,accordingtoanannualsurveybythenonprofitKaiserFamilyFoundationandtheHealthResearch&EducationalTrust.

• Andsince2011,premiumshaverisen20%,farlowerthaninthepreviousfiveyears,whenpremiumsjumped31%,andevenlowerthaninthefiveyearsbetween2001and2006,whentheyshotup63%.

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SortingFactfromFiction

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SortingFactfromFictionFiction: HealthInsurancePremiumsarerisingandbecomingunaffordable– cont’d.

Medicarehasseenasimilarslowdown,asthecostperenrolleehasgrownbyanaverageofjust1.4%annuallysince2011,accordingtothelastreportbytheprogram’strustees.ThatwasthelowestgrowthrateinMedicare’shistory,datingto1965.

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SortingFactfromFiction

Fiction: TheACAisdestroyingjobs• TheU.S.hasaddedmoreprivatesectorjobseverymonthsincetheACAwassignedintolawbyPresidentObamainMarch2010,astarkreversalfromthemonthsbeforethelawwasenactedwhentheeconomywashemorrhagingjobsamidtherecession.

Fiction: ACAhascausedshifttopart-timejobs•Therearenostudiesthatshowthis.

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SortingFactfromFiction

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SortingFactfromFiction

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SortingFactfromFiction

Fiction: Menshouldn’thavetopayforwomen’sprenatalcarecoverage• StatementbyRep.JohnShimkusofIL’s15thCongressionalDistrictshowsafundamentallackofunderstandingabouthowhealthinsuranceworks.Hewouldliketohave“alacarte”healthinsurance,whereyoupickthespecificcoverageprovisionsyouthink youwillneedforyourself.

• Ignorestherealitiesofhowriskpoolswork.

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SortingFactfromFiction

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SortingFactfromFiction

Fiction:Menshouldn’thavetopayforwomen’sprenatalcarecoverage– cont’d.• Women’spremiumshelpsubsidizecoverageformen’shealthconditions,includingprostateortesticularcancers,heartattacksandheartdisease,etc.

• Also,wediscoveredmanyyearsagothatprenatalcareismorecost-efficientthannotprovidingsuchcare.Ithelpsproducehealthierpregnanciesanddeliveries,andhealthierbabies,children,andmoms. 91

SortingFactfromFiction

Fiction: TheAHCAwillprovide“patient-centeredcare”andgetthegovernmentoutoftheway.• ThereisabsolutelynothingintheAHCAthataddressesorprovidesfor“patient-centeredcare”.Itinnowayreshapeshowcareisdelivered.

• TheACAisnot“government-run”healthcare.

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SortingFactfromFiction

Fiction: TheCBOgottheACAanalysiswrong,sotheyarewrongagain.• Non-partisanCBOcorrectlyprojectedrecordcoverageandthatACAwouldbefullypaidfor.

• CBOdidnotprojectSupremeCourtcase,whichreducedMedicaidcoverageorCongressdefundingtheratestabilizationfund(“RiskCorridor”).

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InSummary:ACAvs.AHCA

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Whatconsumerscando

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Whatconsumerscando

• Rememberthatdemocracydoesnotbeginandendinthevotingbooth.Stayengagedthroughoutthelegislativeprocess!

• MakephonecallstoyourRepresentativesandSenators.

• Socialmediaisgreat,butnothingcomparestofloodingyourRepresentativewithphonecalls.

• Don’tjustcallonce– callthroughouttheentireprocess.LetyourRep.knowyouarepayingattention!

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Whatconsumerscando– cont’d.

• Teachothershowtomakephonecalls!

• Youcanalsocontactyourlegislatorwithlettersandin-officevisits.

• WriteLetterstotheEditor.

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Makingthatcall

• Samplemessage:“Hi.Mynameis________________.Ilivein_____________,Illinois.IamcallingtodemandthatRepresentative____voteagainstrepealingtheACAandcuttingMedicaidfunding.TheAmericanHealthCareActisnotanadequatereplacementthatprotectsmycare!"

• YoucanaddashortpersonalstoryofhowtheAffordableCareActhashelpedyouorsomeoneyouknow.Orhowyouwon’tbeabletoaffordyourhealthinsurancepremiumsundertheGOP’shealthcarelaw’staxcredits.

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Makingthatcall– PhoneNumbers

• Rep.RodneyDavis(IL13thCongressionalDistrict) -PleasecallRep.Davis’sdistrictofficeat(217)403-4690.

• Rep.JohnShimkus(IL15thCongressionalDistrict) –Pleasecallhisdistrictofficeat(217)446-0664.

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Makingthatcall– PhoneNumbers,cont’d

• NotsurewhoyourRepresentativeis,oryoudon’thavetheirphonenumber?

• YoucancalltheSEIUHealthCareProtectionLineat866-426-2631tocontactyourmemberofCongress.YouwillbepromptedtotypeinyourzipcodeinordertoconnectyoutoyourRepresentative.

• YoucanalsocalltheCapitolSwitchboardat202-224-3121andanoperatorwillconnectyouwiththeofficesyourrequest.

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Ifyouhavenevercalledyourrepresentative– sometips

• Ifyouhavenevercalledyourrepresentativebefore,wewanttoletyouknowthatitisveryeasy,andhighlyeffective!

• WhenyoucallyourRepresentative,youwillnotactuallyspeaktohimorher,butwillmostlikelybeleavingamessagewiththepersonwhosejobitistoanswerthephonefortheRepresentative.

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Ifyouhavenevercalledyourrepresentative– sometips

#1: Knowwhatyouwanttosay– youcanhaveashortscript,ifthathelps.#2: CalltheRepresentative’sDistrictOfficeinyourcommunity,ortheirWashington,DCoffice,orboth!#3: TellthepersonwhoanswersthephonethatyouwanttoleaveamessagefortheRepresentative#4: Bepreparedtogivethemyournameandaddress.Youcangivethemyourphonenumberifyouwouldlikeacallback.#5: TellthemwhatitisyouwantyourRepresentativetoknow.

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Thereishope!

#1: MillionsofAmericansjustlikeyouaregettinginvolvedintheeffortsto#ProtectOurCare!#2: TheGOPhasalreadychangeditsmessagefrom“repeal”to“repealandreplace”,andnowto“repealandrepair”–theyknowthatAmericansdon’twanttolosetheircoverage.#3: Lotsofpublicinterestorganizationsareactivelyadvocatingandchampioningtheeffort– buttheycan’tdoit,without“we,thepeople”.#4: PeoplewithMedicareandemployer-basedhealthinsurancearebeginningtounderstandthatthey,too,willbeaffected,andtheyarejoiningtheseefforts. 103

ResourcesCCHCC:http://healthcareconsumers.orgHealthyIllinois:http://healthyillinoiscampaign.org/EverThriveIL:http://www.everthriveil.org/SargentShriverNationalCenteronPovertyLaw:http://www.povertylaw.org/KaiserFamilyFoundation:http://healthreform.kff.org/FamiliesUSA:http://www.familiesusa.org/CommunityCatalyst:http://www.communitycatalyst.org/IllinoisHealthMatters:http://illinoishealthmatters.org/

ChampaignCountyHealthCareConsumers(217)352-6533|cchcc@healthcareconsumers.org

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