Republicans’ failure on Friday to pass a proposed “skinny” repeal of the Affordable Care Act in the U.S. Senate staves off an immediate death spiral for Maine’s ACA insurance marketplace, but an ongoing crisis of uncertainty will continue unless a bipartisan fix to the flawed 2010 health care law is achieved.
That’s the assessment of industry and consumer advocates in Maine, who said one of the insurance industry’s fears about the latest repeal effort – dubbed “skinny” repeal because it took aim at only a few of the law’s provisions – was that it would have eliminated the ACA’s individual mandate, which penalizes taxpayers who don’t receive health insurance through the ACA marketplace or their employer.
But another looming threat still exists, they said: the loss of a subsidy that applies to deductibles, co-payments and co-insurance for poor and middle-class ACA policyholders.
All of this is playing out against a backdrop of sharply rising premiums. Average individual plan premiums in Maine have already shot up more than 50 percent since the ACA was implemented, and have doubled nationally.
“This vote alone will probably not do much to stabilize Maine’s markets,” said Steve Butterfield, policy director of the Augusta-based Consumers for Affordable Health Care Foundation, about the skinny repeal’s failure. “That’s because Congress could still come back and vote on some version of this bill. Until Senate Majority Leader Mitch McConnell kills this bill and commits to finding bipartisan solutions through a proper hearing process, I doubt any insurance company is going to look at this and say, ‘We’re all set.’ ”
If signed into law as written, the skinny repeal would eliminate the individual mandate, and suspend for eight years enforcement of the employer mandate, which requires companies employing 50 or more workers to provide coverage. It also would eliminate ACA funding for preventive health care and prohibit Medicaid beneficiaries from being reimbursed for Planned Parenthood services for one year. In addition, it would end a 2.3 percent tax on medical device manufacturers for three years.
Friday’s vote on the measure failed, 51-49, mostly along party lines. No Democrats supported it. Among Republicans, only Maine Sen. Susan Collins, Alaska Sen. Lisa Murkowski and Arizona Sen. John McCain voted no.
THE INDIVIDUAL MANDATE
Insurers in Maine have said that the individual mandate is essential to keeping ACA insurance premiums from skyrocketing further, because it encourages the participation of younger, healthier residents in the insurance market. That participation helps offset costs for older and more disease-prone residents, they said, which is especially important in Maine because of its relatively old population. Maine has the oldest median age in the country at 43.8 years.
Many conservatives object to the individual mandate because it was designed to coerce healthy people into buying health insurance. But supporters say it was a necessary trade-off for a provision of the ACA that guarantees insurance coverage to all Americans regardless of whether they have pre-existing medical conditions.
CASCADE OF NEGATIVE CONSEQUENCES
“My understanding is that guaranteed issue (of health insurance) without an individual mandate is a recipe for an industry death spiral, particularly in small states like Maine, where there aren’t a lot of young people to offset our older population,” said Maine Hospital Association spokeswoman Becky Schnur.
Schnur said her organization is “grateful” and “relieved” that Collins, independent Sen. Angus King and others voted to reject the skinny repeal.
Kevin Lewis, president and CEO of Lewiston-based ACA insurance co-op Community Health Options, expressed concern that the skinny repeal could have produced a cascade of negative consequences for policyholders. Several Republican senators have said they only supported the bill as a means of continuing to develop a full ACA replacement, and that they did not support congressional approval of the skinny repeal as it was written.
“We are certainly relieved that the country avoided a seemingly haphazard approach to dealing with the complicated construction of health care policy and the infrastructure of marketplace dynamics,” Lewis said. “Zeroing out the mandate or torpedoing essential health benefits without regard to the other moving pieces have broad implications that would erode the many gains we’ve witnessed in Maine, particularly the increased numbers of people with more meaningful coverage.”
COST-SHARING CONCERNS
But the skinny repeal’s failure did nothing to eliminate fears that the federal government will stop reimbursing insurers for cost-sharing reduction subsidies, which minimize enrollees’ out-of-pocket expenses for medical care. The subsidies apply to participants in the ACA insurance marketplace with household incomes up to 250 percent of the federal poverty level who purchase standard “silver” tier insurance plans. ACA plans are divided into metal tiers such as bronze, silver and gold based on the quality of coverage.
Cost-sharing subsidies differ from the advance premium tax credit subsidies, which reduce the cost of premiums for ACA policyholders with household incomes up to 400 percent of the poverty level, regardless of which type of plan they purchase.
The Trump administration has made insurance providers nervous by threatening to withhold reimbursement of cost-sharing subsidies unless Congress passes a bill to repeal and replace the ACA. On Friday, President Trump tweeted, “As I said from the beginning, let ObamaCare (sic) implode, then deal. Watch!”
Insurance providers have said that cost-sharing subsidies make ACA coverage affordable for thousands of Mainers who otherwise would be forced to drop out of the insurance market.
“After the votes this week, Harvard Pilgrim remains convinced that it is imperative that Congress take immediate action to stabilize the individual insurance markets,” said Edward Kane, Maine vice president of Harvard Pilgrim Health Care. “The steps that Congress takes must provide clarity that cost-sharing reduction payments, which make health care affordable for many Maine consumers, will continue to be made.”
Maine’s three ACA insurers already are seeking double-digit average premium increases for 2018, citing uncertainty about enforcement of the individual mandate and the threat to cost-sharing subsidies as added risk factors for their operations. The rate requests are under consideration by Bureau of Insurance Superintendent Eric Cioppa. His spokeswoman said Friday’s vote against the skinny repeal preserves the status quo and that guidance on future rate changes would likely only come from the federal government.
Community Health Options, which has about 35,000 policyholders, is requesting a 19.7 percent average rate increase for individual plans. Harvard Pilgrim, which has about 20,000 policyholders, is seeking a 29.2 percent increase. Anthem Blue Cross and Blue Shield, which has about 28,000 policyholders, is asking for a 21.2 percent increase. Anthem declined to provide a comment for this story.
‘THIS AIN’T OVER YET’
According to a study released in May by the U.S. Department of Health and Human Services, average monthly premiums for individual plans on the ACA marketplace in Maine have increased by 55 percent since 2013, the law’s first year of implementation. During that time, the average monthly premium has increased from $335 to $518, it said. Nationally, average premiums have increased by 105 percent. Those cost increases have been offset by subsidies for most policyholders, but not all of them. Middle-class residents and small-business owners have been hit the hardest.
Butterfield, the consumer advocate, said he doesn’t regard the skinny repeal’s failure as a step toward better rates for policyholders. It was merely the latest bullet dodged in an ongoing firefight.
“This ain’t over yet. We’ve seen similar setbacks before only to watch the bill pass by a new vote days or weeks later,” he said. “Until GOP leaders kill this thing dead, we are going to be vigilant and make sure we continue to engage them on knowing the damage they could do by rushing into something similar.”
J. Craig Anderson can be contacted at 791-6390 or at:
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