Friday, October 19 , 2018, 6:51 am | Fair 51º

 
 
 
 

Lou Cannon: Obamacare Expanding Despite Rising Health Insurance Premiums

The Virginia Senate voted last week to expand Medicaid to 400,000 low income residents, becoming the 33rd state to do so under the Affordable Care Act, widely known as Obamacare.

It was another victory for a law that has survived body blows from the Republican-controlled Congress and President Donald Trump’s administration and is now seen as a political asset for Democrats in an election year in which they hope to gain legislative and congressional ground.

But the battle over health-care policy is ongoing, and the ACA is threatened by rising insurance premiums and cut-rate plans that limit health-care coverage.

Meanwhile, states are struggling to contain the rising costs of Medicaid, the second largest item in most state budgets. Some states have achieved savings by providing social services and one-on-one assistance that have helped the sickest patients deal with multiple health issues.

The good news for Obamacare is that it’s become popular with the American people despite congressional and executive actions aimed at weakening the law.

President Barack Obama was in the White House and Democrats controlled Congress when the ACA was enacted in 2010. It didn’t take effect until 2013, and the public was skeptical.

Republicans successfully made repeal of the ACA a central issue in the 2010 midterm elections. This helped the GOP to gain control of Congress and win or tie in 24 state legislative chambers previously held by Democrats. Republicans have held Congress and dominated a majority of statehouses ever since.

After Trump was elected president in 2016, the ACA seemed ripe for repeal. But Obamacare had by then developed a following. It took Republicans two attempts to get an ACA repeal measure through the House of Representatives in 2017. Polls showed the ACA’s popularity rising as the issue was debated in the Senate, where repeal was narrowly but repeatedly rejected.

Since then, Obamacare has become even more popular. A recent survey by the Kaiser Family Foundation found that 54 percent of Americans favor the law compared to 42 percent who oppose it, the ACA’s best showing in any poll.

According to Kaiser, more than 24 million Americans have health insurance because of the ACA. About half of these have policies purchased on the federal ACA exchange or the exchanges run by 11 states and the District of Columbia.

The other 12 million people are covered by Obamacare’s expansion of Medicaid, the federal-state program that provides health care for the poor and disabled. A U.S. Supreme Court decision upholding the constitutionality of the ACA gave states the discretion on expanding Medicaid, which now serves more than 70 million people, one in five Americans.

The federal government initially funds 90 percent of Medicaid expansion. This incentive has prompted 32 states and the District of Columbia to expand Medicaid.

Five other states could join them this year. Voters in Maine in 2017 approved Medicaid expansion, which Gov. Paul LePage, a Republican, has resisted implementing. He faces a July deadline for submitting an expansion plan to the federal Centers for Medicare & Medicaid Services (CMS).

In Virginia, expansion of Medicaid was blocked for five years by the GOP-controlled Legislature. But Democrats gained 15 seats in the House of Delegates last November.

Although the GOP still controls the House by one vote, enough Republicans joined the Democrats to easily approve Medicaid expansion. The Senate, where Republicans hold a 21-19 edge, held out for weeks until two Republicans announced they would join Democrats in supporting expansion, as they did May 30.

Voters could decide the issue in three other states that Trump carried by big margins. In Utah, supporters have gathered enough signatures to put Medicaid expansion on the November ballot. In Idaho, supporters claim to have enough signatures, but they have yet to be certified. Backers of expansion are gathering signatures in Nebraska.

Conservatives who want to limit Medicaid are fighting back. New Hampshire recently became the fourth state to receive federal approval to impose work requirements on Medicaid recipients, joining Arkansas, Indiana and Kentucky.

“Medicaid work requirements will cause many low-income adults to lose health coverage,” according to the Center on Budget and Policy Priorities, a liberal group.

An analysis by The New York Times said “the thicket of new documentation requirements in Medicaid will be daunting for low-income people, who may have little education and struggle with transportation, paying for cell phone minutes and getting access to the Internet.”

But the Trump administration is not rubber stamping state requests. Seema Verma, the CMS administrator, last month warned nonexpansion states that applications for work requirements would need to include a plan to avoid the “subsidy cliff,” in which a person earns too much to keep Medicaid coverage and too little to qualify for a tax credit on the insurance exchange.

This could block a pending application for work requirements by Mississippi, which has no plan for avoiding the subsidy cliff.

CMS also blocked Iowa’s attempts to implement a controversial plan to funnel $1 billion of Medicaid money into privately owned nursing homes.

All in all, Medicaid is holding its own. But individual policyholders on the various ACA exchanges face daunting premium hikes in 2019, judging from early requests for increases of 30 percent or more filed by several insurers in Maryland and Virginia.

Alfred W. Redmer Jr., Maryland’s health insurance commissioner, said soaring premiums are causing healthy people to drop out of the insurance pool, leaving only sick people behind.

Democrats often say this is happening because a provision of last year’s tax bill eliminated an ACA provision requiring most Americans to have health insurance or pay a penalty. But this requirement, known as a mandate, was already on shaky ground, as many young and healthy Americans chose to pay the penalty rather than buy health insurance.

The main reason for the pending premium increases is Trump’s decision last October to discontinue paying insurance companies to subsidize policies for low- and moderate-income Americans. Starting in 2014, the Obama administration paid insurers to offer low-cost policies to people with annual incomes between 100 percent and 400 percent of the poverty line ($12,000 to $48,000 for single people).

Trump’s action panicked patient advocates and insurance regulators, who foresaw the move would destabilize insurance markets.

“It’s going to hurt people, it’s going to hurt kids, it’s going to hurt families,” Nevada Gov. Brian Sandoval, a Republican, said at the time.

Sandoval and other moderates urged Congress to restore the payments. Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., tried to do so, but their bipartisan bill ran aground because of differences between Democrats and Republicans on abortion.

The Trump administration has continued to nibble away at Obamacare in an effort to cripple a law it has been unable to kill. Last month the CMS allowed states to reduce the benefits an insurer must cover. The ACA requires coverage of 10 benefits, including maternity and prescription drugs.

According to Kaiser Health News, sales are growing for bare-bones health policies that offer a cheaper alternative to traditional insurance but put buyers at risk for big bills if they have major medical needs. Known as fixed indemnity plans, the products typically pay set amounts toward the cost of doctor visits and hospital stays and carry restrictions on people with pre-existing conditions.

Full coverage remains a preferable option, and Kaiser surveys show that most Americans holding ACA-compliant policies intend to keep them. Whether they can afford to do so will depend upon whether states make up the loss of federal subsidies either directly or through reinsurance that would lower premiums.

Nine states have approved reinsurance plans or applied for a federal waiver that will allow them to do so. (See “The ACA’s Key to Success?” in the May 14 State Net Capitol Journal.)

With many of the 2019 premium increases due to be announced in October, the ACA is likely once again to be a prime issue in this year’s November elections. But unlike in 2010, when the issue harmed Democrats, this time it is Republicans who are on the defensive.

According to Politico, Democrats have a “unified message blaming Republicans for ‘sabotaging’ the health-care law, leading to a cascade of sky-high insurance premiums ...”

Republicans counter that they are offering affordable alternatives to Obamacare “but haven’t developed a consistent message since their repeal efforts collapsed after years of insistent campaign promises to undo Obamacare,” Politico said.

The recent Kaiser Family Foundation survey on the popularity of the Affordable Care Act found that independents for the first time hold a favorable view of the law. The actions of these independents at the ballot box in November could determine the future of Obamacare.

Lou Cannon, a Summerland resident, is a longtime national political writer and acclaimed presidential biographer. His most recent book — co-authored with his son, Carl — is Reagan’s Disciple: George W. Bush’s Troubled Quest for a Presidential Legacy. Cannon also is an editorial adviser to State Net Capitol Journal, which published this column originally. Click here to read previous columns. The opinions expressed are his own.

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