When I started this blog three years ago, I focused largely on health reform, and specifically the Affordable Care Act (ACA). My goal was to help “make sense” of the overwhelming amount of new information about exchanges, insurance market reforms, and more. We are in another time of turmoil, this one generated by the changes Republicans are seeking to make in the ACA [1]. A complete repeal of the ACA is unlikely, but the future of the ACA is still precarious, given Republican control of Congress and the White House. That said, it’s worth noting several aspects of the ACA that are receiving Republican support.
Let’s take a look at some of the significant ones:
- Subsidies for the Individual Market
Before the ACA, the individual (non-group) health insurance market had no subsidies. Some people qualified for a high-risk pool in certain states, and would receive a subsidy. But the only widely available subsidized insurance program was Medicaid, and adults had to be very low-income to qualify. While the Republican ACA replacement plans vary in qualifying factors for subsidies (such as age vs. income standards) and diminish the size of the subsidies relative to the ACA, Republican proposals are keeping the subsidies in the individual market.
- Protecting People with Preexisting Conditions
One of the more popular provisions of the ACA is that people with preexisting health conditions cannot be denied coverage or charged more for their health insurance. (Up to 50% of non-elderly Americans are estimated to have a pre-existing condition, and up to 86% of Americans 55-64 year of age do [2].) Recent Republican plans may undermine the pre-existing condition protection by allowing state-based waivers and/or redefining what required coverage (such as “essential health benefits”) includes. However, the Senate bill contains a provision to protect people with preexisting conditions. While imperfect, the Senate provision is viewed as an improvement over the House bill. (The House bill was strongly criticized for eliminating this protection.)
- Incentivizing People to Buy Insurance
The ACA incentivizes healthy people to purchase health insurance by creating an individual mandate. The Republican proposals would eliminate the individual mandate, but they replace it with a different incentive (or penalty). Specifically, they define a continuous coverage requirement designed to motivate healthy people to purchase insurance. While many experts believe this incentive is weaker than the mandate, this requirement demonstrates a bipartisan desire to incentivize people to buy insurance which helps to spread risk and keep premium prices more affordable.
- Age Rating Safeguards
The ACA established an age rating ratio of 3:1 so that older people wouldn’t have to pay more than 3 times what younger people pay for health insurance. The new Republican bills widen the ratio to 5:1, but they leave the ratio in place. This safeguard helps to protect older consumers from high insurance rates.
- Young Adult Coverage
An extremely popular provision of the ACA was allowing children to stay on their parents’ health insurance plan until age 26. Both the House and Senate bills continue this.
- Health Insurance Exchanges
The recent Republican bills do not dismantle the state-based exchanges that were set up by the ACA. They allow for some alternatives for consumers to obtain insurance subsidies, but presumably state exchanges with a strong value proposition will continue to operate. Currently, there are 12 state-based marketplaces and they are all required to be self-sufficient now (i.e. not using federal tax dollars to operate). Most of these exchanges are examining ways in which to offer new and additional services under Republican reform scenarios. With an innovative and business-like approach, these exchanges have strong prospects for survival. Additionally, if states are given more flexibility through waivers, some states may want to develop their own state-based exchange so as to have more options than the federal exchange platform offers.
In sum, the nature of the health reform debate has changed, and Republicans are supporting expanded insurance options and protections that did not exist before the ACA. A major difference is that Republicans propose significantly less funding for these options than Democrats did in the ACA (and hence the CBO’s projection of 22-23 million people losing coverage). But the ACA has provided a new baseline, and every proposed change is being measured against that.
[1] The American Health Care Act (AHCA) was passed by the House on May 4thand the Senate introduced the Better Care Reconciliation Act (BCRA) last week. For some great summaries of these bills, check out these sites: http://www.coloradohealthinstitute.org/research/re-aca/matrix, http://www.kff.org/interactive/proposals-to-replace-the-affordable-care-act/ .
[2]The Center for Consumer Information & Insurance Oversight: https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/preexisting.html