The new 115th Congress officially starts on January 3. Behind the scenes discussion have been on-going on using a 2017 budget resolution (left over from last year) to very quickly provide the first budget reconciliation.
The process will start this week with the Senate expected to pass a budget resolution this week and the House set to adopt it in the following few days. That 2017 budget resolution will set up a reconciliation instruction that will call for a rapid repeal of the Affordable Care Act but the key question appears to be how quickly the reconciliation or legislation will replace the ACA.
CWLA will begin a series of conference calls in the first week of January to both track developments in Washington as well as prepare for the 2017 CWLA Conference Advancing Excellence in Practice and Policy: Successful Strategies, March 29 through 31, 2017.
A rapid repeal without a replacement could have significant effects on the current health insurance market.
Studies and Research
Two studies released in December provided information on what will happen if Congress repeals the Affordable Care Act without a replacement. According to an analysis by the Urban Institute, if Congress repeals the ACA through the congressional reconciliation process without a replacement plan, at least 29 million people will lose their health insurance coverage. That means that non-elderly people without health insurance will rise from 11 percent to 21 percent. The study examined what would happen if the Congress uses the reconciliation process with the limits it places on legislating. Congress could repeal the tax credits through the insurance exchanges, repeal Medicaid expansion, perhaps repeal the individual mandate as well as some other significant parts of the law.
A second study from the Kaiser Family Foundation provided information that showed that nearly 9.4 million Americans received close to $33 billion in tax credits that reduce their health insurance premiums. The ACA offsets all or part of health insurance premiums for individuals up to 400 percent of federal poverty level based on a sliding scale. In addition, individuals, up to 133 percent of poverty are covered by Medicaid (if you live in one of 31 states that took the Medicaid option).
The Kaiser Foundation estimated the total amount of tax credits received in each state for 2016, based on the average credit per person and the number of ACA marketplace enrollees receiving credits this year. The five states with the highest premium tax credits at risk of loss if the law is repealed are Alaska, Wyoming, North Carolina, West Virginia and Louisiana. The average monthly subsidies ranging between $362 and $750. Enrollees in these states could lose more than $3.5 million in tax credits with an outright repeal. The states of Florida, California and Texas have the highest volume of enrollees at risk with 3.5 million, receiving nearly $13 million in subsidies. A map by the Foundation allows people to make comparisons by state.
Also, sounding out in December, the American Hospital Association and the Federation of American Hospitals (FAH) released a study and held a press conference stating that repealing the ACA could cost hospitals $165 billion by the middle of the next decade and trigger “an unprecedented public health crisis.” They released their findings to Congress through a letter and a study by consultants.
Another letter to leadership by the American Academy of Actuaries (AAA) also warned Congress about repealing the individual mandate without a replacement, “Even if the effective date of a repeal is delayed, the threat of a deterioration of the risk pool could lead additional insurers to reconsider their participation in the individual market. Eliminating reimbursements to insurers for cost-sharing reduction (CSR) subsidies could result in insurer losses and solvency challenges, leading insurers to further consider withdrawing from the market.”
Child Welfare Will Be Affected
In December, the Georgetown University Health Policy Institute posted a commentary on how the repeal of the ACA could affect child welfare children and families. The piece, Top Five Threats to Child Welfare from ACA Repeal was authored by Olivia Golden, Executive Director, CLASP.
The paper highlights the impact of the Medicaid coverage for youth who aged out of foster care and who are now covered by Medicaid to age 26. Perhaps more significantly, it also highlights the impact of cutting access to mental health and medical treatment for parents involved with child welfare.
As loss of mental health and substance use services would be especially impactful now with much of the country experiencing a dramatic opioid addiction crisis inevitably resulting in increased child removals. A new drug epidemic but an old child welfare factor: substance use.
Golden would understand the overall impact of reduced health care coverage. Before her position at CLASP, Golden oversaw the Washington DC child welfare system and before that was Assistant Secretary at the helm of Administration for Children and Families, HHS.
Medicaid and Block Grants
As part of this repeal is a decision on the Medicaid expansion. The ACA, after a Supreme Court decision in 2012, made Medicaid expansion to people at 138 percent of poverty a state option. Thirty-one states had taken the option with the federal government providing a 90 percent match in the first years. Before the ACA, Medicaid coverage was a patchwork of eligibility with very limited coverage for any single adults. An ACA repeal could repeal the Medicaid expansion sooner than the rest of the ACA repeal.
On December 29, HHS announced that nearly 17 million additional people—including children—gained coverage through Medicaid and the Children’s Health Insurance Program (CHIP) since the start of the ACA. Total coverage through the two health insurance programs was more than 74 million as of October 2016, (69 million on Medicaid). The ACA created a single application for the two programs plus Marketplace coverage.
The Trouble With Block Grants
A Medicaid block grant would be an appealing prospect for governors. It swaps a fixed amount of funding instead of the current structure of automatic increases and decreases based on need. A block grant deal would allow for greater freedom to spend funds in the way governors want. For a governor, especially one leaving office in two years, they could enhance services in the first couple years because funding would likely be the same as the current entitlement but in the future years these Medicaid block grants would pit the growing demand for aging baby-boomers’ need of Medicaid long term care (nursing homes) vs. the needs of families of children. The discussion of a Medicaid block grant is more likely to be raised later in the spring or year.
Repeal and Delay
The strategy by Republican leaders to have a symbolic repeal in early January 2017 but to delay the actual repeal has its problems. The Urban Institute study indicated that with a repeal and delay strategy “…insurers are unlikely to participate in Marketplaces in 2018—even with tax credits and cost-sharing reductions still in place—if the individual mandate is not enforced starting in 2017. A precipitous drop in insurer participation is even more likely if the cost-sharing assistance is discontinued (as related to the House v. Burwell case) or if some additional financial support to the insurers to offset their increased risk is not provided.”