How the Coming Health Law Changes Could Affect You
Before Donald Trump even took the oath of office, both houses of Congress had set the stage for making changes to the healthcare landscape. Thus far, there have been a lot of generalities, but few specifics. So we dug into the programs on the line in an effort to assess how changes might impact you.
What’s happening: Congressional leaders are talking about enacting legislation by mid-February that would repeal the ACA, but what form that repeal might take is unclear.
Karen Pollitz, senior fellow at non-partisan Kaiser Family Foundation, says it’s likely that the “requirement for individuals to buy health insurance and the requirement for large employers to provide it” would be repealed immediately, while other pieces of the law would remain until a replacement plan is agreed upon. On the other hand, Devon Herrick, health economist at the National Center for Policy Analysis, a conservative think tank, believes Republicans will proceed cautiously. “Republicans cannot repeal Obamacare without the assistance of about eight or 10 Democrats,” he says.
What it means for you: If and when the ACA is repealed, healthy people currently buying health insurance who feel it’s a cost burden could drop their coverage without penalty. Depending on how many do, the overweighting of not-so-healthy people on health insurance rolls will likely lead insurers to increase their rates. By 2018, experts predict that many insurance companies will likely leave the marketplace.
Can you do anything to prepare? “This is like preparing for the snow — it’s either going to fall or it isn’t,” says Pollitz. “The best people can do now is get the coverage that’s available to them that they’re entitled to and the financial help [in the form of subsidies] they’re entitled to under current law.”
Replacement of the ACA
What’s happening: Three different plans for replacing the ACA have been floated by Republican party leaders and Congress. One plan comes from Senators Richard Burr (R-NC) and Orrin Hatch (R-UT), and Congressman Fred Upton (R-MI); one is from House Speaker Paul Ryan (R-WI); and the third is from Congressman and HHS Nominee Tom Price (R-GA). We don’t know exactly what a replacement plan would look like, but there are some common elements.
What it means for you: The ACA introduced the concept of “essential health benefits” — a federal standard for benefits that must be provided by any insurance plan — including pediatric services, mental health, maternity care, prescription drugs and birth control. The three Republican proposals don’t include this kind of health benefit standard, so you could lose different aspects of your coverage, and an emergency would result in higher out-of-pocket costs due to higher deductibles.
On the other hand, you’d likely pay a lower monthly premium since less coverage is required, and you wouldn’t be forced to pay for coverage you don’t think you need or pay a penalty if you opt out. The ACA also sets standards for how much consumers can be required to pay through their deductibles, and these three plans would eliminate those price-sharing standards. The replacement plans do discuss preserving the pre-existing conditions clause, but only for people who stay continuously covered — meaning a lapse might mean getting turned down or paying higher prices.
Finally, most of the 150 million Americans under age 65 with health insurance get it through work, says Pollitz. But another commonality of these three bills would be to limit or end the tax subsidy that the federal government provides for employee health benefits. That would lead employers to cut or limit benefits or to shift more of the cost burden to you.
Possible Lawsuit Appeal
What’s happening: Last May, a federal judge ruled — in favor of House Republicans — that the Obama administration illegally spent money that Congress had never appropriated to pay for a portion of the ACA. The payments at issue were for cost-sharing subsidies to reduce copays and deductibles for low-income enrollees; about 60 percent of people in the marketplace currently receive them.
Here’s how this has been playing out in practice: Say you buy a “silver” plan (with a deductible of $2,000 or $3,000 per person). The insurance company sells it to you at that price, but bumps the plan’s benefits up (to those akin to more of a gold or platinum level), and the government later pays the insurance company back the difference. They’ve opted for this workaround, Pollitz explains, because it would be a headache for the government to write a single check every time you go to the doctor or have a procedure done.
“The insurance companies are basically selling you a Cadillac at the price of a Volkswagen and are later getting reimbursed by the government,” says Pollitz.
But the judge agreed that the Obama administration doesn’t have the authority to repay those insurance companies and ordered the administration to stop. The judge stayed the order — meaning it doesn’t go into effect — pending appeal, and the deadline for filing that appeal is February 21. If the ruling stands on appeal it could reach the Supreme Court in about two years’ time.
What it means for you: If the ruling is upheld, insurance companies in the marketplace could balk — they’d be losing money quickly due to the fact they’d be offering better plans for lower costs and wouldn’t be reimbursed. As a result, they could increase their rates or leave the marketplace as a result. Congress could also decide to appropriate the money, but that too has its complications. And, notes Herrick, this verdict could be “used as leverage when it comes to getting a replacement plan.”
What’s happening: “Donald Trump has already said he doesn’t want anybody touching Medicare,” says Joseph Antos, health policy expert at the American Enterprise Institute. “I don’t see any major changes to the Medicare program, but I could see some reforms related to Medicare Advantage.” More than 30 percent of Medicare beneficiaries are currently in private Medicare Advantage plans. Antos believes changes enacted by the new administration could enhance competition by having fee-for-service Medicare plans (which most people are automatically enrolled in upon reaching 65) directly bid against Medicare Advantage plans.
What it means for you: More competition typically brings better deals. And if you do decide to go with a Medicare Advantage plan, it’ll likely more tightly control the care you get, Herrick notes. But there could be fewer unexpected bills — and the plan may be easier to understand.
What’s happening: Medicaid is currently run by states and paid for by both states and the federal government. States submit their bills to the government, and the government is more or less generous depending on the state. For example, in wealthier states like California and New York, the federal government pays roughly 50 cents on the dollar. In poorer states, Alabama or Mississippi, the federal government usually closer to 75 cents, says Antos.
The new administration aims to give each state a fixed sum of money — a block grant — based on population. That gives the states more freedom to run their plans, but simultaneously puts pressure on them to tighten up costs. Another aspect of this is Medicaid expansion. Thirty-two states (if you count D.C.) expanded the program under the ACA, receiving 100 percent reimbursement for a few years, and 90 percent currently. Republicans will likely significantly lower that percentage, meaning some states would rethink their expansion program — and some people would lose eligibility.
What it means for you: Less money for the program in each state means it might no longer be a simple matter to go to, say, the emergency room in the middle of the night, says Antos. Beneficiaries might be pressured to make lower-cost decisions, like making appointments to see doctors in clinics, rather than the ER. Some beneficiaries could also lose eligibility depending on each state’s decision about its own expansion program. And since rules will be state-by-state, says Herrick, state governments could also revoke eligibility for breaking certain state rules, like not paying a co-pay on time.
With Hayden Field