Can States Fill the Gap if the Federal Government Overturns Preexisting-Condition Protections?

https://www.commonwealthfund.org/blog/2019/can-states-fill-gap-preexisting-condition-protections

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Once again, the Affordable Care Act (ACA) is under threat, this time in the form of Texas v. Azar, a federal lawsuit challenging its constitutionality. This litigation, now under consideration by the Fifth Circuit Court of Appeals, took an unexpected turn in March when the U.S. Department of Justice (DOJ) sided with the plaintiffs, urging the Court to strike the ACA down in its entirety.

On May 1, the administration filed a brief in support of this action. But even before this suit, DOJ had refused to defend key provisions that guarantee coverage of preexisting conditions. If the courts agree with the DOJ, it would invalidate every provision of the 2010 law.

As many as 20 million people nationwide would lose their coverage, while millions more could face insurance company denials, premium surcharges, or high out-of-pocket costs because of their health status.

ACA Protections for People with Preexisting Conditions

  • Guaranteed issue. Health insurers are prohibited from denying an individual or employer group a policy based on their health status.
  • Community rating. Health insurers may not use an individual or small employer group’s health status to set premiums.
  • Preexisting condition exclusions. Health insurers and employer group plans are prohibited from refusing to cover services needed to treat a preexisting condition.
  • Essential health benefits. Health insurers selling to individuals and small employers must cover a minimum set of 10 “essential” benefits: ambulatory services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services; and pediatric services, including oral and vision care.
  • Cost-sharing protections. Health insurers and employer group plans must cap the amount enrollees pay out-of-pocket for health care services each year.
  • Annual and lifetime limits. Health insurers and employer group plans are prohibited from imposing annual or lifetime dollar limits on essential health benefits.
  • Preventive services. Health insurers and employer group plans are required to cover evidence-based preventive services without any enrollee cost-sharing.
  • Nondiscrimination. Health insurers must implement benefit designs for individuals and small employers that do not discriminate based on age, disability, or expected length of life.

To help blunt potential fallout and prevent adverse effects for millions of individuals, several states are enacting bills to ensure that federal ACA protections become part of state law (see box). However, before the ACA, state efforts to require insurers to cover people with preexisting conditions resulted in large premium spikes and, in some cases, caused insurers to exit the market.

The ACA’s premium subsidies have had a critical stabilizing effect. If those subsidies are invalidated, states will have a hard time restoring them with state dollars. In addition, state regulation of self-funded employer plans is preempted under the federal Employee Retirement Income Security Act (ERISA), meaning the 61 percent of people with this type of job-based coverage can regain their protections under the ACA only if Congress steps in to restore them.

States Are Stepping Up, but Power to Fully Protect Consumers Is Limited

In a previous post, we found that at least four states (Colorado, Massachusetts, New York, and Virginia) had laws that would preserve key ACA preexisting-condition protections if the federal law is overturned. Since that time, seven more states (Connecticut, Hawaii, Indiana, Maine, Maryland,1 New Mexico, and Washington) have acted to preserve the ACA’s protections for their residents.

These bills take different approaches. Maine, New Mexico, and Washington passed comprehensive bills that would preserve all the protections listed above. The Connecticut, Hawaii, and Indiana laws are more narrowly focused. Hawaii and Indiana prohibit insurers from imposing preexisting condition exclusions; Connecticut aligns its benefit standards with the ACA. Maryland took a different approach, creating a workgroup to recommend ways to protect residents if the ACA is struck down. The governors of New Jersey and Rhode Island have issued executive orders directing their state agencies to uphold the ACA’s principles, by guarding against discrimination based on preexisting conditions and strengthening consumer protections to ensure access to affordable coverage.

Looking Forward

The Fifth Circuit Court of Appeals is expected to hear arguments in Texas v. Azar in July. Whatever that court decides, the losing party is likely to ask the Supreme Court to hear the case, and a ruling could come as soon as June 2020. With the future of the ACA hanging in the balance, at least 14 other states are considering legislation codifying some of the federal consumer protections during their 2019 sessions.

 

 

 

Conservatives Are Using the Courts to Attack Health Care for All Americans

https://www.americanprogress.org/issues/healthcare/news/2018/12/20/464562/conservatives-using-courts-attack-health-care-americans/

A doctor in Milton, Massachusetts, wheels his patient into his office, February 2018.

Conservative state officials, in conjunction with the Trump administration, have launched an all-out attack on health care in the United States. They have brought a suit to overturn the entirety of the Affordable Care Act (ACA), which would have serious consequences for nearly every American who has health coverage, whether through their employer, the individual market, Medicare, or Medicaid. And they found a partisan judge who, last Friday, proved willing to ignore the rule of law and help them advance their political agenda through the courts.

For now, the ACA remains the law of the land. But if the partisan decision in Texas v. United States is upheld, the consequences could be devastating. The Urban Institute estimates that overturning the ACA would result in 17 million more Americans being uninsured in 2019—in addition to coverage reductions that would occur due to the elimination of the individual mandate penalty. Millions of American families could be left without access to health care—and without the financial safety and peace of mind that health insurance provides. Overturning the law would also have serious negative effects on public health and drug development and would shorten the life of the Medicare trust fund. Moreover, it would provide a major tax break to the wealthiest Americans, insurance companies, and drug manufacturers.

Supporters of the decision have talked about this as an effort to end “Obamacare,” which may cause some people to mistakenly believe it only affects those who obtain coverage through the individual marketplace. Nothing could be further from the truth: Virtually no American’s health care coverage would be safe from the effects of this decision. Here are just some of the impacts that this decision, if upheld, would have.

Risks for people who obtain coverage through their employer

  • Lifetime and annual limits on coverage: Polling shows that without the ACA’s ban on lifetime and annual caps on benefits, firms would choose to reinstate limits on coverage. Tens of millions of workers and dependents could face annual or lifetime limits.
  • Loss of coverage for young adult children: The ACA requires employer plans that cover dependents to include young adults up to age 26. More than 2 million young adults have gained coverage under the ACA’s dependent coverage provision.
  • Loss of free preventive services, including contraception: The ACA requires preventive services—such as immunizations; screenings for cancer, diabetes, and depression; and well-child visits—to be available at no cost to the patient. Womensave about $250 annually thanks to the lack of cost sharing for contraception.
  • Elimination of rebates to cover excessively high premiums: The ACA requires insurers to provide rebates if they overprice premiums relative to actual medical costs. Under the ACA’s medical loss ratio provision, insurance companies paid back $344 million in 2016 to people with employer coverage.

Risks for people who receive coverage through Medicare

  • Increases in premiums and out-of-pocket costs: Elimination of the ACA would increase some beneficiaries’ premiums, deductibles, and copayments in Medicare Part A and Part B; overturning the law would eliminate Medicare savings, and premiums are based on program spending.
  • Cost sharing for preventive services such as mammograms: Under the ACA, Medicare provides preventive services and covers a yearly wellness visit at no cost to the patient.
  • Possibility of falling back into the prescription drug coverage gap: The ACA narrowed the Part D coverage gap and was on track to completely fill it by 2020. Without the ACA, many seniors could face higher costs for prescription medications.

Risks for people who receive coverage through Medicaid

  • Loss of coverage under the Medicaid expansion: About 12 million people are covered under the Medicaid expansion, which was funded mostly by the federal government under the ACA.
  • Higher costs for preventive services such as children’s vaccines: The ACA provided a financial incentive for states to provide preventive services to Medicaid beneficiaries free of charge, which a number of states currently utilize.
  • Fewer options to receive care in homes and communities: The ACA provided new options to states to allow elderly enrollees and enrollees with disabilities to receive care in their homes. If the law is overturned, more enrollees will be forced into institutional care.

Risks for people who buy insurance on their own

  • Loss of tax credits that make coverage affordable: Nearly 9 in 10 enrollees in the ACA marketplaces receive premium tax credits. Without the ACA, enrollees would lose financial assistance toward monthly premiums, as well as funding that helps lower deductibles and copayments.
  • Increased costs or denial of coverage due to pre-existing conditions: Without the ACA, individual market insurers would be allowed to charge more, exclude coverage benefits, or turn away people based on medical history. More than 133 millionAmericans with pre-existing conditions could be subject to discrimination if they ever needed individual market coverage.
  • Increased costs for older enrollees: The ACA limits how much more insurance companies can charge older people for coverage relative to younger ones. Without the ACA’s protections, the elderly and near-elderly would see their premiums rise

The legal reasoning behind the lower court’s decision to overturn the ACA is so poor that it has been decried by even some of the most strident conservative legal critics of the law—including those who have backed the previous efforts to overturn it through the courts. Congress has tried and failed to repeal the ACA, and voters in the midterm elections made it clear that they care about keeping protections for pre-existing conditions. Yet the court’s ruling has been approvingly cited by conservative political officials, including President Donald Trump. As such, the decision is best understood not as a legal opinion but instead as a policy preference pursued through the U.S. judiciary. That preference could not be clearer: to give the country’s wealthy and special interests massive taxes cuts—and pay for them with everyone else’s health care.

 

 

 

What Graham-Cassidy means for pre-existing conditions

https://www.axios.com/what-graham-cassidy-really-means-for-pre-existing-conditions-2487720743.html

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Jimmy Kimmel’s takedown of Sen. Bill Cassidy, and Cassidy’s response, ripped open the question of whether the GOP’s latest health reform bill protects people with pre-existing conditions. Cassidy and co-sponsor Sen. Lindsey Graham insist it does — as did President Trump in a tweet last night — but experts say that’s not really the case.

The bottom line: The bill’s funding cuts could pressure states — even blue states — to waive protections for sick people, as a way to keep premium increases in check. Older, sicker people in every state could end up paying more as states try to make up for a funding shortfall.

What the bill does: The bill wouldn’t repeal the Affordable Care Act’s rules about pre-existing conditions. But they might end up only existing on paper, the Kaiser Family Foundation’s Larry Levitt said.

Graham-Cassidy doesn’t let states waive the part of the Affordable Care Act that says insurers have to cover sick people. But it does allow states to opt out of several other ACA rules that can cause people with pre-existing conditions to pay more for their health care. Those provisions include:

  • The ban on charging sick people higher premiums than healthy people.
  • The requirement that insurers cover “essential health benefits,” including prescription drugs. People who need expensive drugs might not have access to a plan that covers those drugs, requiring them to pay out of pocket.
    • Services that aren’t “essential” benefits aren’t subject to the ACA’s ban on annual and lifetime limits.
  • The bill also would also loosen rules about how much insurers can raise their premiums because of a customer’s age. (Older people are more likely to have pre-existing conditions.)

What supporters will argue: The bill requires states to say how their waivers would provide affordable and accessible coverage for people with pre-existing conditions. But there’s no definition of what that means, and there’s also no enforcement mechanism.

  • “The bottom line is these protections are much more at risk under this bill than they are now,” said Cori Uccello, a senior health fellow with the American Academy of Actuaries.

Another level: At least theoretically, because the bill gives states so much control, a more liberal state like California might choose to preserve more of the ACA’s regulations than, say, Alabama. But this bill would radically redistribute federal health care funding — generally away from blue and purple states and toward red states. Those cuts could back blue states into seeking more expansive waivers.

  • Caroline Pearson of Avalere told me: “if you have less money, you either cover fewer people, or you cover the same amount of people with less generous coverage. People with pre existing conditions are very reliant on having access to affordable insurance and need insurance that is comprehensive. So if a bill reduces the availability of comprehensive insurance, people with chronic conditions are going to be disproportionately harmed.”