Healthcare Exchanges

February 28, 2015

The Supreme Court, the ACA, Healthcare.gov, and an Alternative Plan

The US Supreme Court will be hearing a case – known as King v. Burwell – this coming week on whether or not the federal healthcare exchange program, known as Healthcare.gov, is legal. The question before the Court is whether or not the Affordable Care Act (ACA) allows for subsidies for healthcare premiums in any of the 34 states that refused to set up their own healthcare exchanges under the ACA.

The plaintiffs – four people from Virginia – argue that the federal government misinterpreted the ACA in regards to the subsidies. They argue that the law only allows for subsidies in states that set up a state-based exchange. Virginia in one of the 34 state who opted out of a state-based exchange. These four individuals, who don’t want to purchase insurance, say that without the subsidies, they would not have to either buy insurance or pay a penalty since they do not make enough to afford healthcare without the subsidy*. The Obama administration argues that this is a politically motivated argument to narrowly interpret a couple of words found in the ACA in order to gut it.

If the US Supreme Court invalidates the Healthcare.gov websites in all of the states that refused to set up their own healthcare exchanges, everyone who gets a subsidy to purchase their health care through the exchange will lose that subsidy. According to the Washington Post, this type of ruling would affect about eight million people across the country. That’s about 87% of all Healthcare.gov users nationwide in the 34 states that did not set up a state-based exchange receive. In Pennsylvania, somewhere between 70-84% of all users of healthcare.gov receive these subsidies.

The subsidies in Healthcare.gov currently reduces healthcare premiums by up to 72% of the full premium, depending on the size of one’s family and family income. So if the Court holds that subsidies within the Federal Healthcare exchange are illegal, premiums for individuals needing these subsidies will dramatically increase; out-of-pocket premium increase could amount to an average increase of 256%. This increase could begin in as little as 25 days after the ruling is made in June 2015. OR the Court could set a date further in the future to allow some time for transition.

What would the end of these subsidies mean?

Healthcare in the 34 states in the federal exchange program would destabilize. The predictions include lots of people – mostly the young and the healthy – ending their insurance, insurance companies pulling out of the exchanges in these states, lots of layoffs, and a return to uncovered people attempting to get care in hospitals without any coverage. Those left in the exchanges after the young and healthiest leave are the older and the sickest individuals. Insurance companies will begin to feel the pain and start to pull out of the exchanges as participation in the exchanges would no longer be financially viable. With fewer people seeking care on the federal exchange, thousands of people hired by the insurance companies and by the federal exchange system will likely face layoff. In addition, hospitals will once again see a surge in the uninsured arriving on their doorstep for care.

Here’s how the Kaiser Family Foundation summarizes this issue:

People Leaving the Market Followed by Premium Increases for Those Who Remain. As a result, the elimination of the subsidies would destabilize the individual insurance markets in states not running their own marketplaces. Under the ACA, insurers would still be required to guarantee access to coverage irrespective of health status and prohibited from charging sick people more than healthy people. Even without the subsidies, many people who are sick would likely find a way to maintain their insurance in the face of substantial premium increases. However, people who are healthy would likely drop their insurance.

Insurers in the affected states would immediately find themselves in a situation where premiums revenues were insufficient to cover the health care expenses of the remaining enrollees, who would be far sicker on average than what insurers assumed when they set their premiums for 2015. This would trigger a classic adverse selection “death spiral,” where insurers would seek very large premium increases, which in turn would cause the healthier of the remaining enrollees to drop coverage….

Insurance Companies Leave the Market and Layoff Employees…Under ACA regulations, premiums for insurance sold inside the marketplaces are locked in for a full calendar year. So, the earliest those premiums could change would be January 1, 2016, though even that would be tricky since insurers will have already submitted proposed 2016 premiums to state insurance departments by the time the Court issues a decision. Depending on state laws, premiums for products sold outside of the marketplaces could potentially be increased more quickly. And even if insurers could adjust rates, establishing stable and sustainable premium levels in this type of environment is extremely difficult, because as rates move higher, more of the relatively healthy enrollees drop their coverage.

Because this may all happen very quickly, it is possible that many or all insurers would choose to exit the individual markets in these states rather than facing significant losses in a quickly shrinking market. Insurers that remain in the market risk being one of the only carriers continuing to guarantee access to coverage to people in poor health (since people who lose coverage from exiting insurers have special enrollment periods to choose new coverage).

Since it is unlikely that Congressional opponents to the ACA would be willing to craft a law allowing for subsidies within Healthcare.gov should the Court overturn this portion of the ACA regulations, the burden of the fix falls upon each of the 34 states. Some of these 34 states will allow the healthcare exchange to die with the dire predictions quickly coming to fruition. Others, in advance of the Court’s hearing and decision of this case, are starting to talk about alternatives should the Court outlaw the subsidies in their states.

One of these states attempting to deal with this possibility is Pennsylvania, where I live. The insurance companies and hospitals throughout the state, fearing for their livelihood, are lobbying the PA General Assembly to set up a state-based exchange system. Tom Wolf (D), our new Governor, has said he is interested in setting up a state-based exchange.

The question then becomes, where would the money for the set-up of a state exchange come from in a state that has a large budget deficit since federal dollars for such a set-up are no longer available.

Might this be a great time to lobby for a universal health care plan for Pennsylvania? As well as in the other 21 states currently working towards such a solution as well?

Healthcare for All PA, in conjunction with some of our state legislators, are working on re-introducing the Pennsylvania Health Care Plan. This bill, if it becomes law, would

…create one insurance plan that has one single payer, to cover all Pennsylvania taxpayers.  The premiums for The Pennsylvania Health Care Plan would be a flat rate of 3% of income for individuals and 10% of payroll for businesses.  The Pennsylvania Health Care Plan would place you and your healthcare provider in charge of you and your family’s healthcare. The plan will be a public/private hybrid with the insurance function provided by the state government and the medical care would be privately delivered.

It’s cost effective. It covers everyone. It’s comprehensive in that it covers all medical treatment, dental care, eye care, physical therapy, mental health treatment,  hospice care, treatments for addiction, long-term care, access to wellness programs, prescription drugs and emergency transport. And you won’t need an army of navigators in either a state- or a federal-based healthcare exchange to help you interpret your plan.

Check out Healthcare for All PA for more information on this bill and become a citizen lobbyist for comprehensive health care that allows you access to the healthcare you need and want without bankrupting you, your family or your neighbors.

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*NOTE: The four plaintiffs in this case before the Supreme Court–David King, Douglas Hurst, Brenda Levy and Rose Luck—appear to be either ideologues and/or guinea pigs for the libertarian Competitive Enterprise Institute (CEI). CEI is an organization committed to overturning the Affordable Care Act. If the subsidies are overturned, all four of these individuals may not even be affected by the Court’s ruling according to a February 9 article in Mother Jones. Three of the four – Levy, King and Hurst – are now or soon will be fully eligible for Medicare. Two of them – King and Luck – already qualify for a hardship exemption from purchasing healthcare and/or paying a penalty due to their relatively low-income levels. However, the issue of “standing” (the legal argument that they would actually be harmed if the law were to continue), for some reason, has not been raised in this case by the Obama administration and will not be considered when the Court hears the case next week.

February 20, 2013

Why I Support Universal Health Care: A Right, Not a Privilege

Congressman John Conyers Jr. (D-MI) has reintroduced his National Health Care plan bill HR 676, “The Expanded and Improved Medicare for All Act.” I strongly support a universal national health care program such as HR 676. I also support any effort by any state to implement a state-based single-payer health care plan. Why?  For many reasons.

My life was threatened by the multi-company, private health insurance system we currently have.

I received a bone marrow transplant in 1989 from my identical twin sister. Although I had no problem finding a match, I had to jump through many hoops and barriers put up by the two health insurance companies covering my sister and myself. In the case of my insurance provider, I was refused coverage of the donor portion of the transplant because my twin sister wasn’t on my health insurance plan. In the case of my twin sister’s insurance provider, they refused to cover her portion of the transplant because she “wasn’t sick.” Then the hospital administration said that they would not perform the transplant until this conflict between the two insurance agencies was resolved with a guarantee of payment by either or both companies. And my doctors said that if the resolution did not occur rapidly, I would be dead within the year due to the seriousness of the form of leukemia that I had.

According to Health Care for America, health insurance companies profit by denying–not by providing–healthcare. Health insurance CEOs of the top 10 health insurance companies today typically enjoy an average of $10,000,000 in annual compensation–salary, bonuses, stock options, etc.

Back to my story. I went into battle mode against the insurance companies when I was told that they would let me die because of their bottom line and attempts to deny coverage. Because of the support and advocacy I had through the organization where I self-purchased my health insurance (the National Organization for Women), we were finally able to get me the life-saving transplant that I needed. And I am here today.

This experience is why I became an advocate for a single-payer health care system rather than the current system that allows private companies the ability to deny critical health care to “save” their bottom line for profit only.

Other Reasons why I support a Universal Health Care Plan at Either the National or State Level.

It is the ethical and moral to treat all people, regardless of economics or status when they are sick.

A 2009 article in the Journal of Public Health reports that approximately 45,000 people on average die each year due to lack of health insurance. One of the goals of The Affordable Care Act (ACA) is to reduce the number of people without health insurance, so that premature deaths from lack of coverage would also be reduced.

People will continue to struggle to receive health care coverage and treatment with both passage of the ACA and the Supreme Court’s decision declaring the ACA as constitutional while allowing states to opt out of the expanded Medicaid program for low-income people.

The Centers for Disease Control acknowledges that access to coverage will improve under the ACA. But that acknowledgement holds a caveat; they state, “Even after ACA is implemented fully, some persons eligible for coverage might go uninsured.” The ACA will not fully resolve this ethical and moral threat to peoples’ lives. 

Some states are threatening people’s health care and lives based on decisions either by their legislature and/or their governors.

These states place people who could have been covered under the Expanded Medicaid program in continued jeopardy since they will neither be able to sign up for Medicaid nor be able to afford private health insurance through the ACA’s health care exchanges. The 13 states that have already threatened the healthcare of their citizens are Alabama, Georgia, Idaho, Louisiana, Maine, Mississippi, North Carolina, South Carolina, South Dakota, Oklahoma, Pennsylvania, Texas, and Wisconsin. Five states – Iowa, Nebraska, New Jersey, Virginia, and Wyoming—are leaning towards opting out of coverage. Kentucky, New York and Oregon haven’t yet made their decision, but do appear to be leaning towards opting into full ACA with the expanded Medicaid coverage. All remaining 22 states plus the District of Columbia have opted into full ACA with the expanded Medicaid coverage.


Where the States Stand

Via: The Advisory Board Company

For the low-income people living in the 18 states that have either opted out of or are considering opting out of the expanded Medicaid coverage, nothing changes for them since most of these individuals will not be able to afford private health insurance in the new health care exchanges under the ACA.

A Single Payer, Universal Healthcare program would cover everyone.

According to predictions by the Congressional Budget Office and the Joint Commission on Taxation, we will we still have 30 million uninsured in 2023 under Obamacare. At the same time, health care costs for our nation, states, and families will continue to increase. A single-payer, universal healthcare program could cover everyone at lower cost. Everyone in and no one out regardless of income or health status.

The BETTER Alternatives: National and State-Based Single-Payer Plans

The plan introduced by Representative Conyers is basically an expansion of the efficient and cost-effective Medicare system currently used by the elderly and people with disabilities. Its overhead (all costs other than for healthcare) is much lower–and patient satisfaction is much higher–than under for-profit healthcare. And it would cover everyone regardless of their economic or health status without fear of an insurance company denying coverage to save their bottom line.

Similarly, legislation is being considered in about half of the states to create state-based single-payer healthcare programs. Some of these states’  legislatures have held hearings and/or had votes on universal healthcare. Vermont has already passed a law that sets in place the possibility of a single-payer healthcare program by 2017. 2017 is the year that the ACA—aka “Obamacare”—allows states to try other healthcare plans IF they cover at least the same number of people with at least the minimum coverage under the ACA.

Obamacare is now the law of the land. It is an improvement over what we had before 2009. It is also the basis from which we can work towards a comprehensive healthcare program. We could do it nationally, such as with HR 676. Or, like Canada, we can start at the state level.

So check out HR 676. See if your Representative is one of the 40 current co-sponsors. If not, meet with him/her, tell your personal story about why you support an expanded and improved Medicare for All, and ask them to co-sponsor the bill. If he/she is already a co-sponsor, ask your Representative to take the next step. They can hold a town-hall meeting on universal healthcare to hear from their constituents. They can also call on the chairs of the three committees reviewing HR 676 to hold Congressional hearings on HR 676. These three committees are the House Energy and Commerce Committee, the House Ways and Means Committee, and the House Natural Resources Committee.

Also get active with your state-based single-payer organization. These local and state-based single-payer health care groups will let you know how can help with your state-based legislation. Healthcare NOW has a full listing of state- and local-based organizations. If your state does not have a single-payer chapter yet, contact Healthcare NOW at their national office in Philadelphia, PA; they can help you to organize a plan for your state.

All other “advanced” nations have already adopted comprehensive healthcare systems. All deliver better health outcomes at a lower per capita cost than the USA. Let’s get cracking. Let’s do it here in the US of A as well.