Spurred by the Consumer Financial Protection Bureau’s investigation into how credit companies report medical debt, TransUnion, Equifax, and Experian—the country’s three largest credit bureaus, who keep records on 200M Americans—are revising how they report medical debt.
As a result, the companies could eliminate up to 70 percent of medical debt from consumers’ credit reports. Starting in July, medical debts paid after going to collections will no longer appear on credit reports, and unpaid debts won’t be added until a year after being sent to collections (instead of six months, per current policy). And beginning in 2023, medical debts of less than $500 will also be excluded from credit reports altogether.
The Gist:The poorest and sickest patients have been disproportionately saddled with the highest levels of medical debt. In 2017, 19 percent of US households carried medical debt, including many with private insurance.
While these changes will help mitigate the impact of medical debt for some, they aren’t a fix to the larger underlying problem of rising healthcare costs and access to adequate health insurance coverage.
Obamacare enrollment at a record-high 14.5 million
Congress may not fund premium subsidies in 2023
The Affordable Care Act marks its 12th anniversary Wednesday, and despite a record 14.5 million enrollees, the Biden administration is preparing for the possibility that millions could lose coverage next year.
The $1.9 trillion pandemic stimulus package (Public Law 117-2), signed March 2021, reduced Obamacare premiums to no more than 8.5% of income for eligible households and expanded premium subsidies to households earning more than 400% of the federal poverty level. The rescue plan also provided additional subsidies to help with out-of-pocket costs for low-income people. As a result, 2.8 million more consumers are receiving tax credits in 2022 compared to 2021.
But without congressional action, the subsidies—and the marketplace enrollment spikes they ushered in—could be lost in 2023. A new HHS report released Wednesday, shows an estimated 3.4 million Americans would lose marketplace coverage and become uninsured if the premium tax credits aren’t extended beyond 2022.
In a briefing with reporters Tuesday, Chiquita Brooks-LaSure, administrator for the Centers for Medicare & Medicaid Services, said her agency is “confident that Congress will really understand how important the subsidies were” to enrolling more people this year. The CMS would “pivot quickly,” however, to implement new policies and outreach plans if the subsidies aren’t extended as open enrollment for 2023 begins in November.
“That said, today and tomorrow we are celebrating the Affordable Care Act,” Brooks-LaSure added. “As part of that process, we’ve been reminding ourselves that sometimes it takes some time to pass legislation. And just like the Affordable Care Act took time, we’re confident that Congress is going to address these critical needs for the American people.”
After years of legal and political brawls that turned the landmark legislation into a political football, Obamacare “is at its strongest point ever,” Brooks-LaSure said. The 14.5 million total enrollees—those who extended coverage and those who signed up for the first time—is a 21% increase from last year. The number of new consumers during the 2022 open enrollment period increased by 20% to 3.1 million from 2.5 million in 2021.
This week, the Department of Health and Human Services will highlight the impact of the ACA and the Biden administration’s efforts to strengthen the law. The CMS recently announced a new special enrollment period opportunity for people with household incomes under 150% of the federal poverty level who are eligible for premium tax credits. The new special enrollment period will make it easier for low-income people to enroll in coverage throughout the year.
Troubled times could be around the corner, however, as millions of people with Medicaid coverage could become uninsured after the public health emergency ends. Under the Families First Coronavirus Response Act (Public Law 116-127), signed March 2020, states must maintain existing Medicaid enrollment until the end of the month that the public health emergency is lifted. Once the continuous enrollment mandate ends, states will resume Medicaid redeterminations and disenrollments for people who no longer meet the program’s requirements.
Dan Tsai, deputy administrator and director of the Center for Medicaid and CHIP Services at CMS, said the agency is working with states to make sure people who lose Medicaid coverage can be transferred into low- and no-cost Obamacare coverage.
“A substantial portion of individuals who will no longer be eligible for Medicaid will be eligible for other forms of coverage,” including marketplace coverage, Tsai told reporters Tuesday.
In a statement, President Joe Biden acknowledged the law’s great impact. “This law is the reason we have protections for pre-existing conditions in America. It is why women can no longer be charged more simply because they are women. It reduced prescription drug costs for nearly 12 million seniors. It allows millions of Americans to get free preventive screenings, so they can catch cancer or heart disease early—saving countless lives. And it is the reason why parents can keep children on their insurance plans until they turn 26.”
A new spring brings another anniversary of the Affordable Care Act. Twelve (sometimes tumultuous) years later, this remarkably resilient law is on firmer ground than ever before.
And there are currently no existential legal threats to the law working their way through federal courts.
In some ways, this rosy report feels unremarkable. Why expect otherwise with the law now in place for more than a decade and baked into every part of the health care system?
But this outcome was far from inevitable.
Just five years ago, Congress tried to repeal as much of the law as possible. When those broader efforts failed, Congress eliminated the much-maligned individual mandate penalty. We appeared to have reached a stalemate: Democrats could not improve the law while Republicans could not repeal it.
Could this be the moment we moved on from ACA politics?!
Enter the courts. In early 2018, Republican attorneys general sued to invalidate the mandate and, with it, the rest of the law. That lawsuit—California v. Texas—was ultimately heard by a new Supreme Court one week after the 2020 election, and the ACA was upheld just last summer.
This marked the third time that the Supreme Court largely rebuffed what could have been a crippling legal challenge to the law. It feels like ancient history now, but it is worth remembering that we were still playing “will they or won’t they?” with the Supreme Court and ACA only one year ago.
In the meantime, the Trump administration tried to undermine access to coverage under the law—except when it didn’t. I won’t list all the relevant Trump-era policies, but they had an impact: the uninsured rate rose, and marketplace enrollment declined until the 2021 plan year.
Ironically, one policy meant to destabilize the market had the opposite effect: so-called “silver loading” led to more generous marketplace subsidies and likely helped stave off even greater coverage losses.
This is the recent history that is top of mind as I reflect on the year ahead—and the work left to do to achieve universal coverage. Here are just some of the major issues facing policymakers:
• The clock is ticking toextend the American Rescue Plan Act subsidies. If Congress fails to do so, millions will face premium hikes next year and marketplace enrollment will likely drop.
• More than 2 million low-income peopleremain stuck in the Medicaid coverage gap in the 12 states that have not yet expanded their Medicaid program.
• Up to 15 million people, including nearly 6 million children, could lose Medicaid coverage at the end of the COVID-19 public health emergency.
• There is increasingly an affordability and underinsurance crisis, including for those with job-based coverage: an estimated 87 million peoplewere underinsured in 2018.
Congress and the White House are working to address these challenges, but much uncertainty remains.
“It feels like ancient history now, but it is worth remembering that we were still playing ‘will they or won’t they?’ with the Supreme Court and Affordable Care Act only one year ago.” – Katie Keith
Looking beyond Congress, 2022 will be an important year for regulatory changes. The Biden administration has proposed, but has not yet finalized, major marketplace changes. Other already-identified priorities include fixing the family glitch, limiting short-term limited duration insurance, and enhancing nondiscrimination protections. We could see movement on at least some of these rules soon.
While the Biden administration may be waiting out Congress before initiating some rulemaking, time is of the essence. New rules take many months to adopt and then take effect—followed by more time to deal with the legal challenges that typically follow.
Follow along as I dive deep on these issues and more in a new Health Affairs’ Health Reform newsletter.
We’ll highlight the latest health policy developments—from legislation to litigation—and explain what these changes mean for patients, payers, providers, and other key health care stakeholders.
It’s Your Birthday, Affordable Care Act!
In March 2020, Health Affairspublished a theme issue to celebrate the tenth anniversary of the Affordable Care Act. The issue contains many illuminating research articles on the landmark legislation, from its impact on “the cost curve” to Medicaid expansion.
Above is a datagraphic from the issue showing how the ACA affected insurance coverage.
Part of the reason why medical debt is so high is because many Americans don’t have enough savings to pay their deductibles and other out-of-pocket costs, according to a second KFF analysis.
Driving the news: Health insurance plans’ out-of-pocket limits prevent enrollees from paying limitless sums of money for medical care. But that doesn’t mean they protect people from having to pay several thousands of dollars — which not everyone has lying around.
Deductibles alone, which people must pay before coverage for most services kicks in, are frequently thousands of dollars and can exceed the amount of liquid assets a household has.
By the numbers: Over 40% of multi-person households can’t cover a mid-range employer family plan deductible of $4,000, and 61% don’t have enough to cover a high-range deductible.
The ability to pay out-of-pocket costs varies significantly by income.
Americans owe at least $195 billion of medical debt, despite 90% of the population having some kind of health coverage, according to new research from the Peterson Center on Healthcare and the Kaiser Family Foundation.
Why it matters: People are spending down their savings and skimping on food, clothing and household items to pay their medical bills, Adriel writes.
About16 million people, or 6% of U.S. adults, owe more than $1,000 in medical bills, and 3 million people owe more than $10,000.
The financial burden falls disproportionately on people with disabilities, those in generally poor health, Black Americans and people living in the South or in non-Medicaid expansion states, per the research.
Go deeper: 16% of privately-insured adults say they would need to take on credit card debt to meet an unexpected $400 medical expense, while 7% would borrow money from friends or family, per the research, which focused on adults who reported having more than $250 in unpaid bills as of December 2019.
It’s not yet clear how much the pandemic and the recession factor into the picture, in part because many people delayed or went without care. There also was a small shift from employer-based coverage to Medicaid, which has little or no cost-sharing.
While the new federal ban on surprise billing limits exposure to some unexpected expenses, it only covers a fraction of the large medical bills many Americans face, the researchers say.
A recent New Yorker article details the history of the American Medical Association’s (AMA) opposition to single-payer healthcare, and the grassroots movement that nearly changed its position in 2019.
Since its founding in the 1840s, the largest association of the nation’s doctors has wielded significant influence over healthcare policy, and has been the most effective opponent of several waves of progressive healthcare reform proposals across the last century. More recent changes in the demographic makeup of its physician constituents have begun to mirror the US population. A quarter of today’s practicing physicians graduated from foreign medical schools, and gender and racial gaps in medical schools have been reduced. Today, half of medical students are female, and half are people of color.
The Gist: The perspectives, needs, and politics of the physician community are changing. Younger physicians tend to be more left-leaning, and more are employees, rather than entrepreneurial business owners. While physician pocketbook issues historically dominated the AMA’s policy positions, today’s younger physicians are increasingly motivated by social justice concerns, leading to advocacy positions that would have been unimaginable a few decades ago.
Physician societies continue to move closer to endorsing more extensive healthcare reform policies, over trying to ensure economic protection for the profession—and in the long run, this shift in physician support could prove a key driver in increasing public approval of “Medicare for All” and other coverage reforms.
The cost of an ambulance ride has soared over the past five years, according to a report from FAIR Health, shared first with Axios.
Why it matters: Patients typically have little ability to choose their ambulance provider, and often find themselves on the hook for hundreds, if not thousands of dollars.
The details: Most ambulance trips billed insurers for “advanced life support,” according to FAIR Health’s analysis.
Private insurers’ average payment for those rides jumped by 56% between 2017 and 2020 — from $486 to $758.
Ambulance operators’ sticker prices, before accounting for discounts negotiated with insurers, have risen 22% over the same period, and are now over $1,200.
Medicare, however, kept its payments in check: Its average reimbursement for advanced life support ambulance rides increased by just 5%, from $441 to $463.
Between the lines: Ambulances aren’t covered by the new law that bans most surprise medical bills, meaning patients are still on the hook in payment disputes between insurers and ambulance operators.
State of play: Ground ambulances are operated by local fire departments, private companies, hospitals and other providers and paid for in a variety of ways, which makes this a tricky issue to address, according to the Commonwealth Fund.
Some states — such as Colorado, Delaware, Florida, Illinois, Maine, Maryland, New York, Ohio, Vermont and West Virginia — have protections against surprise ground ambulance billing, a columnist in the Deseret News pointed out earlier this year.
But in California, Florida, Colorado, Texas, Illinois, Washington state and Wisconsin, more than two-thirds of emergency ambulance rides included an out-of-network charge for ambulance-related services that posed a surprise bill risk in 2018, according to a Peterson-KFF Health System Tracker brief.
The bottom line: Costs for ground ambulance care are on the rise and, with few balance billing protections, that means patients could still be hit with some big surprises if they wind up needing a ride in an ambulance.
HENRY KOTULA 