David Michael Miller
If you’re confused about the future of the Affordable Care Act and all the talk about repeal and replacement, join the club. Heck, about one-third of Americans polled by Morning Consult apparently don’t even realize that the Affordable Care Act and Obamacare are the same thing! Sad.
At least in Wisconsin, it seems to be working for people. This year a record 242,863 Wisconsin residents enrolled in the program, an increase of 1.6 percent over 2016. Adam VanSpankeren of Covering Wisconsin, which helps clients connect with insurance coverage, including Obamacare, says the “need and demand is still there.”
One reason for the plan’s popularity is that pre-existing conditions can no longer be used to deny coverage. “Obamacare has been a blessing for us,” says Tammy Wolfgram, a small business owner near Hartland. Wolfgram was previously denied coverage due to her 11-year-old daughter’s pre-existing condition. Eventually she was able to get coverage, but for a price: a $1,000 monthly premium and large deductibles through Wisconsin’s high-risk pool (HIRSP).
Rep. Mark Pocan (D-Madison) says the GOP budget resolution introduced in January to repeal Obamacare puts at risk nearly 2.5 million state residents who have pre-existing conditions, like the Wolfgram family.
Nevertheless, President Donald Trump is determined to dismantle the program. In his first address to Congress Tuesday night, he promised consumers would have greater choice with a plan based on tax credits and expanded health savings accounts — but he made no mention of subsidies to help consumers pay for their insurance.
But how will the president and congressional Republicans get on the same page and enact a replacement? For the past six years we have heard a lot about repealing Obamacare, but few details about the replacement. Now, finally, replacement options are being proposed, including one introduced by House leaders on Feb. 17.
While Congress’ repeal of Obamacare may occur quickly, it is believed any replacement would be phased in by Republicans over the next few years in the hopes of not disrupting individual coverage. But who knows? Much remains unclear and uncertain. Here are some questions you might have that we tried to get answers to.
How many Wisconsin residents with Obamacare are subsidized?
Roughly 85 percent of the 239,000 individuals with Obamacare in 2016 had premium subsidies, reducing their coverage costs by $332 monthly on average.
How did Obamacare affect insurance premiums in Wisconsin?
A study by Citizen Action Wisconsin found that health insurance inflation in Wisconsin averaged 15 percent each year from 2001 to 2013 prior to Obamacare and just 2 percent on average in the four years since.
What pieces of Obamacare are likely to be repealed?
The individual mandate and premium subsidies.
What parts are likely to stay?
The pre-existing condition ban and coverage up to age 26 for young adults on their parents’ insurance.
Will all current recipients lose coverage if the program is repealed without a replacement?
They will lose coverage they have now and may be eligible for individual coverage outside the exchanges, but without premium subsidies. And, according to a new report from Citizen Action of Wisconsin, if the tax subsidies were eliminated, it would add an average of $4,953 in 2018 premiums for Wisconsin residents who used subsidies to purchase insurance through the exchange.
Will those with a subsidy to buy insurance through Obamacare have to pay the full cost if the program is repealed?
Yes, most likely but it is dependent on what the replacement coverage looks like. Any changes Republicans make would not be effective until January 2018 at the earliest. If the ACA is repealed, Rep. Mark Pocan says four in five working families would lose coverage, and more than 9 million Americans across the country who would receive insurance tax credits would no longer receive that help.
It’s been reported that Republicans have 10 replacement plans for Obamacare. Do any of these seem more likely to become law?
They all include tax credits to purchase insurance, and many allow insurance to be sold across state lines, which would be a big regulatory change. One new plan, the Patient Freedom Act, released Jan. 24 by Sens. Bill Cassidy (R-Louisiana) and Susan Collins (R-Maine), would allow states the choice of staying with Obamacare or auto-enrolling consumers on high-deductible health plans financed by health savings accounts.
Plans proposed by House Speaker Paul Ryan and Health and Human Services Secretary Tom Price include age-based tax credits to purchase high-deductible health plans that would leave millions more uninsured persons than currently are under Obamacare. The Price and Ryan plans reverse Obamacare’s ban on pre-existing conditions. At this point there’s not a clear betting favorite.
Why is it so hard to come up with a replacement plan for Obamacare?
Health insurance is an intricate patchwork of components. Obamacare builds on decades of health insurance legislation from Medicare and Medicaid to COBRA and HIPAA. When Obamacare, rather than a single-payer system, was passed, it added complexity. As in the past, any new law is likely to add complexity as well, although Republicans argue that it won’t.
If Obamacare is repealed, what effect will it have on those who get insurance through their employers?
If there’s no equivalent replacement matching the number of persons covered, the uninsured will contribute to cases of uncompensated care, such as those that existed pre-Obamacare. The costs incurred by physicians and hospitals will shift to those who do have coverage, spiking those insurance premiums.
How would the insurance market be affected by a repeal-and-replace strategy that includes a year or two grace period while Republicans come up with a new program?
That would leave tremendous uncertainty in the market. It is widely believed this would cause more insurers to withdraw from Obamacare for 2018. On Feb. 14, Humana announced it is withdrawing from the individual marketplace and Obamacare’s public exchanges for 2018. More insurer withdrawals reduces competition and drives premiums to rise at a much higher rate. Those with employer-based coverage could also face higher premiums.
If there’s no mandate to have insurance, what effect will this have on the insurance industry?
If the individual mandate goes away, fewer young, healthy individuals will buy coverage. These healthy individuals are needed to offset the costs of older, less healthy Americans; higher premiums overall will result.
What do Madison insurers think about repealing Obamacare?
Phillip Dougherty of Wisconsin Association of Health Plans says that Wisconsin will be okay because it is “well-positioned for proposals targeting consumer choice and affordability,” noting that “Wisconsin has the most competitive health insurance market in the nation.”
Has anything, other than Obamacare, been done to drive down the cost of health insurance or health care in general?
The 2015 Medicare Access CHIP (Children’s Health Insurance Program) attempts to rein in costs by paying providers based on outcomes rather than individual services and tests. It’s redefining health care reimbursement, according to Chris Queram, president and CEO of the Madison-based Wisconsin Collaboration for Healthcare Quality: “Value is a megatrend and firmly entrenched regardless of what happens with Obamacare.”
Michael Meulemans is a Monona-based health insurance consultant.
