Commentary

CBO report contradicts Tillis on Trumpcare and pre-existing conditions

During a Facebook Live Q&A session on May 11, Senator Thom Tillis told North Carolinians that he is comfortable with letting states decide whether to protect people with pre-existing conditions from pricing discrimination. His rationale? No state would want to take up the American Health Care Act’s (AHCA) waivers from those protections.

Well, the experts at the Congressional Budget Office (CBO) disagree. According to the report released yesterday by Congress’ objective legislative impact scorekeeper, half of the U.S. population would live in states that waived the ban on charging people higher premiums based on health status (called “community rating”) and/or the requirement that plans cover minimum services, such as mental health and prescription drugs (called “essential health benefits”).

The CBO looks to states’ past behavior to predict whether they would take up a waiver from the essential health benefits requirement and the community rating protection. They “expect that states that previously mandated fewer benefits [be covered by health plans] would be more likely to apply for a waiver to modify the EHBs.”

Before the ACA, only 18 states mandated coverage of maternity care and only 23 states mandated some mental health benefit coverage. North Carolina was not among those states. Before the ACA, 18 states limited or prohibited pricing discrimination against people with pre-existing conditions. North Carolina was not among those states.

What’s more, the CBO expects that states with “fewer insurers” (North Carolina has one statewide insurer on the individual market) and “higher premiums” (North Carolina has the second-highest gross benchmark plan premium before subsidies in the country) would be those most likely to seek those waivers.

Here’s what the CBO says about what will happen in states that seek both waivers. Fair warning: it is shocking:

About one-sixth of the population resides in states that CBO and JCT expect would obtain waivers from EHB and community-rating requirements and make substantial changes to market regulations. Those changes would result in significantly lower premiums for those with low expected health care costs and higher nongroup enrollment by those individuals than under current law—and lower average premiums for such people than in states making moderate changes to regulations. However, over time, less healthy individuals (including those with preexisting or newly acquired medical conditions) would be unable to purchase comprehensive coverage with premiums close to those under current law and might not be able to purchase coverage at all.

They continue, noting that the return of medical underwriting (premium pricing based on health status and pre-existing conditions), would completely destabilize markets for people who need health care:

Eventually, CBO and JCT estimate, those premiums [for less healthy people or those with preexisting medical conditions] would be so high in some areas that the plans would have no enrollment. Such a market would be similar to the nongroup market before the enactment of the ACA, in which premiums were underwritten and plans often included high deductibles and limits on insurers’ payments and people with high expected medical costs were often unable to obtain coverage.

Sen. Tillis doesn’t seem to recognize the severe damage that the Republican health care bill would cause or the likelihood that its waivers will hit home here in North Carolina. Let’s hope that he and his colleagues in the Senate carefully read the CBO report.

Commentary, News

Congress changes Trumpcare in dead of night to allow insurers to cap coverage and deny care

Shortly before 11 PM last night, the Republican House of Representatives amended their Trumpcare bill. Following the House’s delay of a planned floor vote on the American Health Care Act yesterday, Republican leadership made the change to persuade hardline conservatives in the Freedom Caucus to vote for the bill.

Zachary Tracer from Bloomberg explains how this last-minute, secretive amendment drastically alters the rules of the insurance market:

If healthy people can buy cheap, skimpy insurance plans, they don’t subsidize those who are sick — meaning that people who aren’t healthy have to pay more, or may not be able to get insurance. Cutting the rules could push insurers to offer only limited plans, resulting in less choice for consumers, particularly those who are sick or want more comprehensive coverage.

This change also opens the door for insurance companies to reintroduce lifetime limits and annual caps on coverage, yet it’s reported that Congress will vote on this bill less than 24 hours after making the change. After years of peddling alternative facts about how hastily and secretively Congress passed the Affordable Care Act seven years ago, Republican leadership in Congress aims to change the health care system under the cover of night to allow millions of Americans to be denied care and coverage.

After last night’s failed effort to bring Trumpcare to a vote on the House floor, President Trump delivered an ultimatum to the House—pass this bill or nothing at all. The candidate who promised that everyone would be covered under his plan seems to care more about the appearance of getting a bill done than he cares about what the bill does.

Commentary, public health, Trump Administration

Congress sneaking in last-minute change to make Trumpcare even worse

Ahead of a floor vote scheduled for later today, Republican leadership in the House has realized that they do not have enough votes right now to pass the American Health Care Act (AHCA), the Trump-Ryan proposal to repeal and replace the Affordable Care Act (ACA). As a result, Trump and others are trying to sneak in disastrous last-minute changes to an already terrible bill to win over conservative votes at the expense of millions of lives.

One such change that they are proposing is repealing the requirement that health insurance plans cover a core set of essential health benefits. This guarantees that plans provide coverage for core services, such as hospitalizations, maternity care, prescription drugs, as well as mental health and substance use disorder treatment.

If this provision is repealed, insurers could offer bare-bones plans that don’t cover services that North Carolinians need, meaning only the most expensive, premium plans would cover services like treatment for opioid addition, for example.

What’s more, other key consumer protections would fall apart. While the AHCA does not repeal the ACA’s prohibition on lifetime limits and annual caps on services, that protection is useless without the essential health benefits requirement. Current law only applies these protections to services considered essential health benefits. If this provision is repealed, insurers may be free once again to arbitrarily cut off coverage for patients because their treatment is too expensive.

The haste with which Congress and Trump are moving to repeal our health care is telling; why rush to change one-sixth of the U.S. economy and millions of lives unless you don’t want the public to see what you’re doing? After all, we still haven’t seen the bill language that the House will vote on today. It seems like the Republicans may have to pass the bill to find out what’s in it.

Commentary

New info: Blue Cross turned a $185 million profit in 2016, minimized ACA losses by 86%

On March 1, Blue Cross and Blue Shield of North Carolina provided a year-end financial report for its health insurance business in 2016. What we learned is telling: after turning a small profit the prior year, Blue Cross produced a profit of $185 million in 2016.

Much has been made in the past of the financial losses that Blue Cross has incurred on plans sold on the individual/nongroup market, to which the Affordable Care Act made critical reforms that became effective in 2014.

However, Blue Cross’ financial losses on its ACA business shrunk by 86% from 2015 to 2016.

The lesson: It has taken a little time for insurers to adapt and learn how to manage the costs and utilization patterns in this new line of business. But that’s not out of the ordinary for businesses adjusting to changing markets.

Despite any losses it incurs through what it calls its ACA line of business, Blue Cross has held steady reserves of around $2 billion. The company is healthy, and even if it experiences slightly larger losses on these lines of business, it can sustain them without having its solvency threatened and without passing the buck to consumers.

While conservatives throw out alternative facts about the ACA going into collapse, it’s clear that—in only the third year of the ACA’s health insurance marketplace—companies are figuring this thing out. As Blue Cross minimizes their losses and more than half a million North Carolinians continue to enroll each year, it’s easy to see that there is no imminent collapse here in our state, even with limited insurer competition.

Commentary

GOP health care proposal would hike premium costs for half a million North Carolinians

The Republican Congress’ plans to repeal and replace the Affordable Care Act (ACA) have started to come into focus following the release of a policy brief and the leak of draft legislative language. Their proposal would eliminate the ACA’s premium tax credits and replace them with flat tax credits, which would operate like a voucher, for people buying their own insurance. These changes are important for people in our state, as 499,178 North Carolinians enrolled in a plan with financial help from the ACA’s premium tax credits in 2016.

While the GOP tax credit proposal is similar in a few ways to the ACA’s premium tax credit, it differs significantly in how it determines how much financial help an individual can receive. The dollar-amount of the GOP tax credit is adjusted for age, but it is not adjusted for crucial factors, meaning it will fall short of helping the people who need it most.

  1. There is no income test for tax credit eligibility, nor does the size of the tax credit adjust for people with lower incomes. Under this proposal, Art Pope could get a larger tax credit than a 30-year-old teacher.
  2. Second, the tax credit does not adjust for the costs of plans available to the consumer.

As a result, North Carolinians who are older, have low-to-moderate incomes, and have high health care needs would face unaffordable costs under the GOP proposal.

For a Greensboro family of four—two 35-year-old parents with two young children—that earns $65,000 annually, premium costs for a Silver plan would jump by 73 percent. In order to afford a decent health care plan, this middle-income family would have to pay roughly 15% of their income toward premiums alone.

Young people with much lower incomes would also see higher costs. A 33-year-old single mother of two children who makes $26,000 a year in Orange County would see her premium increase by a whopping 490 percent. Read more