ACA: Five tactics could lead to implosion
4. Work for Medicaid recipients
Potential work requirements for Medicaid beneficiaries may harm the Medicaid expansions that were part of the ACA.
On March 14, the HHS sent a letter to 50 U.S. governors encouraging states to come up with innovative ideas for their Medicaid programs, including the possibility of work requirements. The letter included specific suggestions, such as introducing plans that include health savings account–like features, encouraging Medicaid patients to secure employer-provided insurance, and requiring small premiums or other contributions from patients to encourage personal responsibility. The letter noted that the HHS would be open to states proposing work requirements for some Medicaid recipients, an approach that has “produced proven results for Americans enrolled in other federal, state, and local programs.”
Four states – Arizona, Indiana, Kentucky, and Pennsylvania – have formally submitted waiver requests to the HHS that would require work as an eligibility condition. To date, none has been approved. Arkansas also recently announced that it would seek changes to its waiver, including a work requirement.
Imposing work requirements would hurt access to Medicaid for patients who need health assistance, but who cannot work, Dr. Forman said. Under the ACA, 31 states and the District of Columbia have expanded their Medicaid coverage to people previously uncovered. Dr. Forman stresses that the bulk of Medicaid funding is spent on elderly, disabled, and mentally ill patients.
5. Withhold cost sharing reduction payments
For months, President Trump has threatened to stop making cost saving reduction (CSR) payments to insurers in the marketplace, a move that analysts say would raise premiums and cause insurers to exit the marketplaces. Most recently, the President on July 29 tweeted, “If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!”
Under the ACA, the federal government provides CSR payments to insurers to offset the costs for providing discount plans to patients who earn up to 200% of the federal poverty level. Plans on the individual exchanges are required to cover a package of essential benefits with pricing limitations to ensure that out-of-pocket costs are low enough for poorer patients. Because insurers lose money on these plans, the ACA provides about $7 billion to insurers through CSR payments.
Republican members of the House of Representatives sued the HHS over the CSR payments under the Obama administration, claiming the funding was illegal because it was never appropriated by Congress. A court ruled in favor of the House in 2016, but an appeal filed by the Obama administration allowed the CSR payments to continue.
President Trump has not indicated whether he plans to drop the appeal or carry on the case. But if he fails to continue the suit, the move would immediately end the CSR payments.
“If the funding for the CSR benefits goes away, premiums will go up, taxpayer dollars will go up, and choices will go down,” Ms. Grow of AHIP said in an interview. “The benefits as we understand them are still required to be offered on the exchanges. In order to cover those benefits, the premiums for everybody in the individual market will have to go up, and they will go up by about 20%.”
While the federal government would save money by ending the CSR payments, it would face increased costs for tax credits that subsidize premiums for marketplace enrollees with incomes that are 100% to 400% of the poverty level, according to an analysis by the Kaiser Family Foundation.
Following President Trump’s most recent threat to stop the CSR payments, AHIP issued a joint statement with the American Academy of Family Physicians, the American Medical Association, and several others underscoring the importance of the payments.
“Cost-sharing reductions are used to help those who need it most – low- and moderate-income consumers,” the associations said in the Aug. 2 statement. “Without these funds, consumers’ access to care is jeopardized, their premiums will increase dramatically, and they will be left with even fewer coverage options ... As medical professionals, insurers providing health care services and coverage to hundreds of millions of Americans, and business leaders concerned with maintaining a stable health insurance marketplace for consumers, we believe it is imperative that the administration fund the cost-sharing reduction program.”
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