The American Health Care Act: Economic and Employment Consequences for States

Could health insurance reductions under the American Health Care Act (AHCA) cause problems for employment in the future? Check out this article from The Commonwealth Fund to learn more.

Abstract

Issue: The American Health Care Act (AHCA), passed by the U.S. House of Representatives, would repeal and replace the Affordable Care Act. The Congressional Budget Office indicates that the AHCA could increase the number of uninsured by 23 million by 2026.
Goal: To determine the consequences of the AHCA on employment and economic activity in every state.
Methods: We compute changes in federal spending and revenue from 2018 to 2026 for each state and use the PI+ model to project the effects on states’ employment and economies.
Findings and Conclusions: The AHCA would raise employment and economic activity at first, but lower them in the long run. It initially raises the federal deficit when taxes are repealed, leading to 864,000 more jobs in 2018. In later years, reductions in support for health insurance cause negative economic effects. By 2026, 924,000 jobs would be lost, gross state products would be $93 billion lower, and business output would be $148 billion less. About three-quarters of jobs lost (725,000) would be in the health care sector. States which expanded Medicaid would experience faster and deeper economic losses.

Background

On May 24, 2017, the U.S. House of Representatives passed the American Health Care Act (AHCA, H.R. 1628) to partially repeal and replace the Affordable Care Act (ACA), also known as Obamacare. The U.S. Senate is currently developing its own version of the legislation.

A January 2017 analysis found that repealing certain elements of the ACA—the Medicaid expansion and premium tax credits—could lead to 2.6 million jobs lost and lower gross state products of $1.5 trillion over five years.1,2 That brief focused only on specific repeal elements because other details were not available. This brief examines all aspects of the AHCA, including restructuring Medicaid and health tax credits and repealing ACA taxes (Exhibit 1).

Exhibit 1
Key Provisions of the American Health Care Act as Passed by the U.S. House of Representatives
Eliminates individual penalties for not having health insurance and penalties for employers that do not offer adequate coverage to employees. Raises premiums for people who do not maintain continuous insurance coverage.
Replaces the current income-related premium tax credits to subsidize nongroup health insurance with age-based tax credits. Allows premiums to be five times higher for the oldest individuals, compared to the current threefold maximum.
Restricts state Medicaid eligibility expansions for adults, primarily by reducing federal matching rates from 90 percent beginning in 2020 to rates ranging between 50 percent and 75 percent.
Creates temporary funding for safety-net health services in states that did not expand Medicaid.
Restructures Medicaid funding based on per capita allotments rather than the current entitlement. States may adopt fixed block grants instead.
Creates a Patient and State Stability Fund and Invisible Risk-Sharing Program.
Terminates the Prevention and Public Health Fund.
Repeals numerous taxes included in the ACA, including Medicare taxes on investment income and on high-income earnings, taxes on health insurance and medical devices, and a tax on high-cost insurance (i.e., the “Cadillac tax”); raises limits for health savings accounts and lowers the threshold for medical care deductions.
Allows states to waive key insurance rules, like community rating of health insurance and essential health benefits. Creates a fund that states could use to lower costs for those adversely affected by the waiver.

The Congressional Budget Office (CBO) reported the AHCA would increase the number of uninsured Americans under age 65 by 14 million in fiscal year 2018, eventually reaching 23 million more by 2026.3 A RAND analysis of an earlier version of the bill was similar: 14 million more uninsured in 2020 and 20 million in 2026.4

This report examines the potential economic effects of the AHCA from calendar years 2018 to 2026, including:

    • employment levels, measured as changes in the number of jobs created or lost due to policy changes
    • state economic growth, as measured by changes in gross state products in current dollars, adjusted for inflation; an aggregate measure of state economies, analogous to the gross domestic product at the national level

state business output,

    as measured by changes in business receipts in current dollars at production, wholesale, and retail levels, encompassing multiple levels of business activity.

Our estimates are based on changes in federal funding gained or lost to states, consumers, and businesses. The AHCA significantly reduces federal funding for Medicaid. It lowers federal match funding for the 31 states and District of Columbia that expanded Medicaid, encouraging them to discontinue their expansions. It gives states an option to either adopt per capita allotments for Medicaid or fixed block grants; either option lowers federal Medicaid expenditures. Eliminating the tax penalty for individuals without health insurance reduces incentives to purchase insurance, raising the number of uninsured people. Restructuring premium tax credits and widening age-related differences in premiums are expected to shrink nongroup insurance coverage and reduce federal spending for health insurance subsidies. The AHCA is designed so that tax cuts take effect sooner than reductions in health insurance subsidies. Thus, state employment and economies could grow at first but shrink in later years as the coverage reductions deepen.

How Federal Health Funding Stimulates Job Creation and State Economies

Federal health funds are used to purchase health care. Then, fiscal effects ripple out through the rest of the economy, creating employment and other economic growth. This phenomenon is called the multiplier effect. Health funds directly pay hospitals, doctors’ offices, and other providers; this is the direct effect of federal funding. These facilities use revenue to pay their employees and buy goods and services, such as rent or equipment; this is the indirect effect of the initial spending. In addition, there are induced effects that occur as health care employees or other businesses (and eventually their workers) use their income to purchase consumer goods like housing, transportation, or food, producing sales for a diverse range of businesses. Similarly, when federal taxes are reduced, consumers or businesses retain income and can purchase goods and services, invest, or save. Due to interstate commerce, each type of effect can flow across state lines.

Both government spending increases and tax reductions can stimulate job creation and economic growth. The relative effects depend on how the funds are used. Government spending or transfers, like health insurance subsidies, typically have stronger multiplier effects in stimulating consumption and economic growth than do tax cuts. Tax cuts usually aid people with high incomes who shift much of their gains into savings, stimulating less economic activity.5,6,7 A recent analysis found that 90 percent of the AHCA’s tax cuts go to the top one-fifth of the population by income.8

This report estimates how the AHCA will change federal funds gained or lost for all 50 states and the District of Columbia from 2018 to 2026. We allocate federal funding changes, based on CBO estimates, for each state. We then analyze how federal funding changes ripple through state economies, using the PI+ economic model, developed by Regional Economic Models, Inc. (REMI).9 (See Appendix B. Study Methods.)

Findings

Overall Effects

As illustrated in Exhibit 2, most of the AHCA’s tax repeals begin almost at once, while coverage-related spending reductions phase in. The net effect initially raises the federal deficit. In 2018, the number of jobs would rise by 864,000 and state economies would grow. Health sector employment begins to fall immediately in 2018, with a loss of 24,000 jobs, and continues dropping to 725,000 health jobs lost by 2026 (Exhibit 3). Most other employment sectors gain initially, but then drop off and experience losses.

By 2020, the reduction in federal funding for coverage would roughly equal the total level of tax cuts. By the following year, 2021, coverage reductions outpace tax cuts. As a result, there are 205,000 fewer jobs than without the AHCA and state economies begin to shrink.

By 2026, 924,000 fewer people would have jobs. Gross state products would drop by $93 billion and business output would be $148 billion lower. These downward trends would continue after 2026.

Looking at Coverage-Related and Tax Repeal Policies

To better understand how the AHCA affects state economies and employment, Exhibit 4 looks at the two major components of the AHCA separately. The coverage-related policies (Title I of the AHCA and sections related to premium tax credits and individual and employer mandates) generally lower federal spending, particularly due to cuts to Medicaid and premium tax credits. Some policies partially offset those large cuts, such as the Patient and State Stability Fund. The tax repeal policies (Title II, except for sections about premium tax credits and individual and employer mandates), such as repeal of Medicare-related taxes, Cadillac tax, or medical device tax, predominantly help people with high incomes or selected businesses.

Implemented alone, the coverage-related policies would lead to steep job losses over time, reaching 1.9 million by 2026, driven by deep Medicaid cuts (Exhibit 4). Job losses begin to mount in 2019.

Alternatively, the tax repeal policies on their own would be associated with higher employment and state economic growth. Gains begin with 837,000 more jobs in 2018; this rises through 2024, and leads to 1 million additional jobs in 2026. Combined, tax repeal and coverage-related changes lead to initial economic and employment growth but eventual losses.

The detailed employment results show how these two components of the AHCA affect different economic sectors. Coverage and spending-related policies are directly related to funding for health services (e.g., Medicaid, premium tax credits, high-risk pools). The reductions directly affect the health sector—hospitals, doctors’ offices, or pharmacies—but then flow out to other sectors. Thus, about two-fifths of jobs lost due to coverage policies are in the health sector while three-fifths are in other sectors. Tax changes affect consumption broadly, spreading effects over most job sectors.

Within the health sector, job losses due to coverage-related cuts are much greater than gains due to tax repeal; losses in health care jobs begin immediately. In other sectors, employment grows at the beginning but later declines.

State-Level Effects

Consequences differ from state to state. We summarize data for nine states: Alaska, Florida, Kentucky, Maine, Michigan, New York, Ohio, Pennsylvania, and West Virginia. Exhibit 5 shows the effects of the AHCA in 2018 and in 2026. Complete results for all 50 states and the District of Columbia are available in Appendices A1–A4. In this analysis, states that expanded Medicaid tend to experience deeper and faster economic declines, although substantial losses occur even among nonexpansion states:

  • Eight of the nine states (Alaska, Florida, Kentucky, Maine, New York, Ohio, Pennsylvania, and West Virginia) begin with positive economic and employment effects in 2018, but are worse off by 2026, with outcomes typically turning negative well before 2026.
  • Michigan is worse off in 2018 and continues to decline through 2026. We assume Michigan will terminate its Medicaid expansion immediately because of a state law that automatically cancels the expansion if the federal matching rate changes.10 Six other states (Arkansas, Illinois, Indiana, New Hampshire, New Mexico, and Washington) have similar legislation and experience losses sooner than other states.
  • Most job losses are in health care. In six states (Florida, Kentucky, Maine, Michigan, Ohio, and West Virginia) health care job losses begin in 2018, but all nine states have significant reductions in health employment by 2026. Looking at the U.S. overall, in most states, losses in health care jobs begin by 2020 (Appendix A2).
  • States that expanded Medicaid have deeper and faster losses. Having earned more federal funds, they lose more when Medicaid matching rates fall. While cutting funds to states that expanded health insurance for low-income Medicaid populations, the bill temporarily increases funding to states that did not expand Medicaid. Nonetheless, states that did not expand Medicaid, like Florida and Maine, experience job and economic losses after a few years. In fact, Florida has the third-highest level of job loss in the nation by 2026.
  • Other factors that can affect the size of economic and employment effects include:
    • the extent to which states gained coverage in the ACA health insurance marketplaces; states with higher marketplace enrollment tend to lose more
    • the cost of health insurance in the state; the new tax credits are the same regardless of location, making insurance less affordable in high-cost states and reducing participation
    • age structure; older people will find insurance less affordable
    • state population size; the population size of states magnifies their losses or gains
    • other factors that affect tax distribution, like number of residents with investment income or high incomes or whether medical device or pharmaceutical manufacturers are located in the state.

Overall, the 10 states with the largest job losses by 2026 are: New York (86,000), Pennsylvania (85,000), Florida (83,000), Michigan (51,000), Illinois (46,000), New Jersey (42,000), Ohio (42,000), North Carolina (41,000), California (32,000), and Tennessee (28,000). Forty-seven states have job losses by 2026; four states (Colorado, Hawaii, Utah, and Washington) have small job gains in 2026, but would likely incur losses in another year or two (Appendix A1).

Conclusions

The House bill to repeal and replace the Affordable Care Act would greatly reduce the number of people with insurance coverage, effectively reversing gains made since the law’s enactment. The AHCA would initially create more employment and economic growth, driven by a federal deficit increase in 2018 and 2019, but the effects turn negative as coverage reductions deepen, with job losses and lower economic growth beginning in 2021. By 2026, 924,000 jobs would be lost, gross state products would be $93 billion lower, and business output could fall by $148 billion.

Health care has been one of the main areas of job growth in recent years.11 Under the AHCA, the sector would lose jobs immediately, with a loss of 24,000 jobs in 2018. By 2026, 725,000 fewer health sector jobs would exist. This would be a major reversal from current trends. While our analysis shows other employment sectors grow initially, most other sectors would experience losses within a decade.

It may be useful to look at these findings in a macroeconomic context. The U.S. unemployment rate for May 2017 was 4.3 percent, the lowest in 16 years and about half as high as during the recent recession. When unemployment is low, additional job growth creates a tighter labor market, so that businesses often have greater difficulties filling job vacancies. In turn, this can accelerate inflation.

It is likely that the business cycle will eventually slow down again. In that event, the AHCA could accentuate job loss and economic contraction. Combined with major increases in the number of uninsured, this could contribute to a period of economic and medical hardship in the U.S. The AHCA could exaggerate both the highs and lows of the business cycle. From a national policy perspective, it may be more useful to develop countercyclical policies that strengthen employment and the economy during times of contraction.

This analysis finds that the net effect of the AHCA would be a loss of almost 1 million jobs by 2026, combined with 23 million more Americans without health insurance, according to the CBO. In late May, the Trump administration released its budget proposal, which appears to propose an additional $610 billion in Medicaid cuts, beyond those included in the AHCA.12 Such deep cuts would further deepen the employment and economic losses discussed in this study.

This analysis has many limitations. We do not know whether or when the AHCA or an alternative will be enacted into law. Alternative policies could yield different effects. We focus only on the consequences of the AHCA. Other legislation, such as infrastructure, trade, national security, or tax policies, may be considered by Congress and might also affect economic growth and employment.

These projections, like others, are fraught with uncertainty. Economic, technical, or policy changes could alter results. In particular, the AHCA grants substantial discretion to states, such as in Medicaid expansions, waivers of federal regulations, and use of new funds like the Patient and State Stability Fund. While this analysis is aligned with CBO’s national estimates, we developed state-level projections, introducing further uncertainty. Our approach conservatively spreads changes across states and may underestimate the highs and lows for individual states.

See original article Here.

Source:

Ku, L., Steinmetz, E., Brantley, E., Holla, N., Bruen, B. (14 June 2017). The American Health Care Act: Economic and Employment Consequences for States. [Web Blog Post]. Retrieved from address http://www.commonwealthfund.org/publications/issue-briefs/2017/jun/ahca-economic-and-employment-consequences


Would States Eliminate Key Benefits if AHCA Waivers are Enacted?

If lower premiums were a possibility, would states actually enact waivers to exclude certain essential health benefits? Check out this article from the Kaiser Family Foundation to learn more about the possible result of giving states the power to use waivers when it comes to healthcare coverage.

As the debate over amending health insurance market rules continues, proponents of changing the law have proposed reducing the health benefits provided by non-group plans as a potential way to lower premiums in the market.  The Affordable Care Act (ACA) prescribes 10 categories of essential health benefits that non-group and small-group policies must cover, and provides in most cases that the scope of these benefits should be similar to those in employer group health plans, which cover most non-elderly Americans.  The American Health Care Act (AHCA), which passed the House of Representatives on May 5, would permit states to seek waivers to amend the required benefits if doing so would achieve one of several purposes, including lowering premiums.1  We look below at the benefits covered by non-group plans before the ACA as a possible indication of how states could respond to the waiver authority under the AHCA.

Background

The lack of coverage for benefits such as maternity and mental health care in many nongroup plans, which was a frequent point of criticism when the ACA was debated, was one (but not the only) reason why non-group coverage was less expensive before the ACA was enacted.  In the pre-ACA market, certain benefits were excluded to make coverage more affordable and to guard against potential adverse selection by applicants with more predictable, chronic health care needs.  Even with the ability to medically screen applicants for non-group policies, some insurers excluded coverage for conditions such as mental health and substance abuse care unless states required that they be covered.

States determined coverage requirements for health insurance policies prior to the ACA.  A few states defined a standard benefit package to be offered by insurers in the nongroup market.  Most states adopted some mandates to cover or offer specific benefits or benefit categories – such as requirements for policies to cover maternity benefits or mental health treatments. In addition to deciding which categories of benefits must be included or offered, states might also specify a minimum level or scope of coverage; for example, a few states required that mental health benefits have similar cost sharing and limits as other outpatient services (sometimes called parity).

Pre-ACA non-group plans varied considerably in scope and comprehensiveness of coverage, with some plans limiting benefit categories or putting caps on benefits, while others offered more comprehensive options.  For example, some plans did not cover prescriptions, others covered only generic medications or covered a broader range of medications subject to an annual cap, while still others covered a more complete range of medications.  This diversity was possible because insurers generally were able to decline applicants with pre-existing conditions, and could require their existing customers to pass screening if they wanted to upgrade to more comprehensive benefits.  This prevented applicants from selecting the level of coverage they wanted based on their known health conditions, but also prevented many people from being able to obtain non-group coverage at all.

To look more closely at the benefits provided in pre-ACA non-group plans, we analyzed data submitted by insurers for display on HealthCare.gov for the last quarter of 2013.  Beginning in 2010, insurers submitted information about their non-group plans to be displayed on HealthCare.gov; the data includes information on benefits, coverage levels for each benefit, benefit limits, premiums and cost sharing parameters, and enrollment.  We focus here on the benefits and benefit limits.  We use data from 2013 because it is the most current year prior to when the ACA’s major insurance market changes went into effect, provides more benefit categories than some earlier years, and has more information about benefit limits for each category.  We note, however, that the ACA prohibition on annual dollar limits took effect shortly after enactment and was phased in between 2010 and 2013, so these types of limits would likely not be reflected often in data we received. This means that our analysis likely misses some of the limits (for example, dollar limits on prescriptions) that existed in nongroup policies before the ACA was enacted.  We limit the analysis to plans where insurers report enrollment in the product upon which the plan is based.  Our methods are described in more detail in the appendix.

Results

The data include 8,343 unique plans across 50 states and the District of Columbia.  We looked at the percentage of plans that included coverage for major benefit categories.  Not surprisingly, all of the plans covered basic benefits such as inpatient hospital services, inpatient physician and surgical services, emergency room services, and imaging services, while virtually all (99%) covered outpatient physician/surgical services,  primary care visits, home health care services, and inpatient and outpatient rehabilitation services.

Certain other benefits, however, were covered much less often (Figure 1).  Large shares of plans did not provide coverage for inpatient or outpatient mental/behavioral health care services (38% each), inpatient or outpatient substance abuse disorder services (45% each), and delivery and inpatient care for maternity care (75%).2 In addition, 6% of plans did not provide coverage for generic drugs, 11% did not provide coverage for preferred brand drugs, 17% did not provide coverage for non-preferred brand drugs, and 13% did not provide coverage for specialty drugs.

Even when coverage was provided, some policies had meaningful limits or restrictions for certain benefits.  Mental/behavioral health care is a case in point.  Among plans with coverage for outpatient mental/behavioral health services, 23% limited benefits for some or all mental/behavioral services to fewer than 30 visits or sessions over a defined period (often a year) and 12% limited it to 12 or fewer.  A small share (about 5%) of plans providing coverage for outpatient mental/behavioral health services provided benefits only for conditions defined as severe mental disorders or biologically-based illnesses or applied limits (such as visit limits) if the illness was not defined as severe or biologically based.  The definitions of these terms varied by state.3

Similarly, for plans covering outpatient substance abuse disorder services, 22% limited the benefit to fewer than 30 visits or sessions; 12% limited it to 12 or fewer. In many of these plans, visits for either mental health or substance abuse care were combined to apply toward the same limit.

Among the relatively few plans that provided coverage for delivery and inpatient maternity care, a small share (3%) applied separate deductibles of at least $5,000 for maternity services and some plans (6%) applied a separate waiting period of at least year before benefits were available.  A few plans restricted benefits to enrollees enrolled in family coverage or required that the enrollee’s spouse also be enrolled.

Discussion

The ACA raised the range of benefits provided by non-group policies such that the benefits now offered by non-group plans are comparable to those offered in employer group plans.  The desire to lower non-group premiums, however, has led policymakers to consider allowing states to roll back the essential health benefits prescribed by the ACA.

Among the pre-ACA policies we reviewed, virtually all included benefits for certain services: hospital, physician, surgical, emergencies, imaging, and rehabilitation.  Other services were covered less often, including prescription drugs, mental/behavioral health care, substance abuse disorder care, and coverage for pregnancy and delivery.  This latter group of services all have some element of predictability or persistency that make them more subject to adverse selection. For example, many people use drug therapies over long periods and would be much more likely to select policies covering prescriptions than people who do not regularly use prescription drugs. If states were to drop any of these services from the list of essential health benefits for non-group plans, access to them could be significantly reduced.

The difficulty is that insurers would be very reluctant to offer some of these services unless they were required in all policies because people who need these benefits would disproportionately select policies covering them. In the pre-ACA market, insurers were able to offer products with different levels of benefits because they generally were able to control who could purchase them by medically screening new applicants.  Even existing customers faced medical screening if they wanted to change to a more comprehensive policy at renewal.  Through these practices, insurers were able to avoid the situation where people could choose cheaper policies when they were healthy and upgrade to better benefits when their health worsened. The proposed AHCA market rules, however, would not guard against this type of adverse selection, because people with pre-existing health conditions would be able to select any policy offered at a standard premium rate, and change their selection annually without incurring a penalty, as long as they maintained continuous coverage. This means that the range of benefits provided by insurers in states with essential health benefit waivers would likely be more limited than what insurers offered in the pre-ACA non-group market.  Benefit choice might be particularly limited in states that specify only a few benefits as essential.

It is hard to imagine that insurers would cover certain benefits if they were not required.  For example, some insurers before the ACA did not offer mental health benefits unless required by a state, even when they could medically screen all of the applicants.  And given the current problems with substance abuse in many communities, insurers would be reluctant to include coverage to treat them unless required. Offering these benefits as an option (for example, including them in some policies but not in others), would result in very high premiums for optional benefits because people who know they need them would be much more likely to choose them.

The AHCA presents state policymakers with a dilemma: they can reduce the essential health benefits to allow less expensive insurance options for their residents, but doing so may eliminate access to certain benefits for people who want and need them.

See original article Here.

Source:

Claxton, G., Pollitz, K., Semanskee, A., Levitt, L. (14 June 2017) Would States Eliminate Key Benefits if AHCA Waivers are Enacted? [Web Blog Post] Retrieved from address http://www.kff.org/health-reform/issue-brief/would-states-eliminate-key-benefits-if-ahca-waivers-are-enacted/


Analysis: Before ACA Benefits Rules, Care for Maternity, Mental Health, Substance Abuse Most Often Uncovered by Non-Group Health Plans

What would happen to the non-group insurance market under the American Health Care Act (AHCA)? Read this article from the Kaiser Family Foundation to learn more.

Three in four health plans in the non-group insurance market did not cover delivery and inpatient maternity care in 2013, before the Affordable Care Act (ACA) essential health benefits requirement took effect, finds a new Kaiser Family Foundation analysis.

Other major benefits most often left uncovered before the ACA include substance abuse disorder services (inpatient and outpatient services each not covered by 45% of 2013 non-group plans) and mental/behavioral health services (inpatient and outpatient services each uncovered by 38% of the plans).

Additionally, some plans that covered maternity, substance abuse or mental health care services included meaningful limits or restrictions, the analysis finds.

Since 2014, the ACA has required non-group plans to cover 10 categories of essential health benefits comparable to those offered in employer group plans. The new analysis offers a window into how insurers could respond if the essential health benefits requirement is rolled back, a change being considered by Congressional leaders and allowed through state waivers by the House-passed American Health Care Act as a potential way for lowering premiums.

Without the requirement, however, insurers in the non-group market would likely be reluctant to offer coverage for some expensive services that have an element of predictability and persistence, as people who needed these benefits would disproportionately select policies covering them. Unlike in the pre-ACA market, insurers would not be able to exclude from coverage altogether people with pre-existing conditions.

The new analysis finds that all 2013 non-group plans covered basic benefits, such as inpatient hospital services, inpatient physician and surgical services, and emergency room services. Some plans didn’t provide various levels of prescription drug coverage, however.

The analysis uses data insurers provided for the Health Plan Finder on HealthCare.gov for the last quarter of 2013.  Certain provisions of the ACA, such as the prohibition of annual and lifetime dollar limits on benefits, had already begun to be phased in by that point, so the data does not reflect all of the types of limitations in non-group policies prior to the ACA.

See original article Here.

Source:

(14 June 2017) Analysis: Before ACA Benefits Rules, Care for Maternity, Mental Health, Substance Abuse, Most Often Uncovered by Non-Group Health Plans. [Web Blog Post]. Retrieved from address http://www.kff.org/health-reform/press-release/analysis-before-aca-benefits-rules-care-for-maternity-mental-health-substance-abuse-most-often-uncovered-by-non-group-health-plans/


us capitol

Senate Health Bill Would Revamp Medicaid, Alter ACA Guarantees, Cut Premium Support

The Senate has just released their version of the American Health Care Act (AHCA).  Here is a great article by Julie Rovner from Kaiser Health News detailing what the Senate's version of the AHCA legislation means for Americans.

Republicans in the U.S. Senate on Thursday unveiled a bill that would dramatically transform the nation’s Medicaid program, make significant changes to the federal health law’s tax credits that help lower-income people buy insurance and allow states to water down changes to some of the law’s coverage guarantees.

The bill also repeals the tax mechanism that funded the Affordable Care Act’s benefits, resulting in hundreds of billions of dollars in tax cuts for the wealthy and health care industry.

Most senators got their first look at the bill as it was released Thursday morning. It had been crafted in secret over the past several weeks. Senate Majority Leader Mitch McConnell (R-Ky.) is seeking a vote on the bill before Congress leaves next week for its Fourth of July recess.

Senators had promised that their ACA replacement would be very different than the version that passed the House in May, but the bill instead follows the House’s lead in many ways.

At lightning speed and with a little over a week for wider review, the Republicans’ bill could influence health care and health insurance of every American. Reversing course on some of the more popular provisions of the Affordable Care Act, it threatens to leave tens of millions of lower-income Americans without insurance and those with chronic or expensive medical conditions once again financially vulnerable.

Like the House measure, the Senate bill, which is being called a “discussion draft,” would not completely repeal the ACA but would roll back many of the law’s key provisions. Both bills would also — for the first time — cap federal funding for the Medicaid program, which covers more than 70 million low-income Americans. Since its inception in 1965, the federal government has matched state spending for Medicaid. The new bill would shift much of that burden back to states.

The bill would also reconfigure how Americans with slightly higher incomes who don’t qualify for Medicaid would get tax credits to help pay insurance premiums, eliminate penalties for those who fail to obtain insurance and employers who fail to provide it, and make it easier for states to waive consumer protections in the ACA that require insurance companies to charge the same premiums to sick and healthy people and to provide a specific set of benefits.

“We agreed on the need to free Americans from Obamacare’s mandates, and policies contained in the discussion draft will repeal the individual mandate so Americans are no longer forced to buy insurance they don’t need or can’t afford; will repeal the employer mandate so Americans no longer see their hours and take-home pay cut by employers because of it,” McConnell said on the floor of the Senate after releasing the bill. He also noted that the bill would help “stabilize the insurance markets that are collapsing under Obamacare as well.”

It is not clear that the bill will make it through the Senate, however, or that all of it will even make it to the Senate floor. The Senate (like the House) is operating under a special set of budget rules that allow it to pass this measure with only a simple majority vote and block Democrats from dragging out the debate by using a filibuster. But the “budget reconciliation” process comes with strict rules, including the requirement that every provision of the bill primarily impact the federal budget, either adding to or subtracting from federal spending.

For example, the legislation as released includes a one-year ban on Medicaid funding for Planned Parenthood. That is a key demand of anti-abortion groups and some congressional conservatives, because Planned Parenthood performs abortions with non-federal funding. But it is not yet clear that the Senate parliamentarian will allow that provision to be included in the bill.

Also still in question is a provision of the Senate bill that would allow states to waive insurance regulations in the Affordable Care Act. Many budget experts say that runs afoul of Senate budget rules because the federal funding impact is “merely incidental” to the policy.

Drafting the Senate bill has been a delicate dance for McConnell. With only 52 Republicans in the chamber and Democrats united in opposition to the unraveling of the health law, McConnell can afford to lose only two votes and still pass the bill with a tie-breaking vote from Vice President Mike Pence. McConnell has been leading a small working group of senators — all men — but even some of those have complained they were not able to take part in much of the shaping of the measure, which seems to have been largely written by McConnell’s own staff.

So far, McConnell has been fielding complaints from the more moderate and more conservative wings of his party. And the draft that has emerged appears to try to placate both.

For example, as sought by moderates, the bill would phase down the Medicaid expansion from 2020 to 2024, somewhat more slowly than the House bill does. But it would still end eventually. The Senate bill also departs from the House bill’s flat tax credits to help pay for insurance, which would have added thousands of dollars to the premiums of poorer and older people not yet eligible for Medicare.

A Congressional Budget Office report estimating the Senate bill’s impact on individuals and the federal budget is expected early next week. The House bill, according to the CBO, would result in 23 million fewer Americans having health insurance over 10 years.

For conservatives, however, the Senate bill would clamp down even harder on Medicaid in later years. The cap imposed by the House would grow more slowly than Medicaid spending has, but the Senate’s cap would grow even more slowly than the House’s. That would leave states with few options, other than raising taxes, cutting eligibility, or cutting benefits in order to maintain their programs.

Defenders of the health law were quick to react.

Sen. Ron Wyden (D-Ore.) complained about changes to coverage guarantees in the ACA.

“I also want to make special note of the state waiver provision. Republicans have twisted and abused a part of the Affordable Care Act I wrote to promote state innovation, and they’re using it to give insurance companies the power to run roughshod over individuals,” he said in a statement issued shortly after the bill was released. “This amounts to hiding an attack on basic health care guarantees behind state waivers, and I will fight it at every turn.”

“The heartless Senate health care repeal bill makes health care worse for everyone — it raises costs, cuts coverage, weakens protections and cuts even more from Medicaid than the mean House bill,” said a statement from Protect Our Care, an umbrella advocacy group opposing GOP changes to the health law. “They wrote their plan in secret and are rushing forward with a vote next week because they know how much harm their bill does to millions of people.”

See the original article Here.

Source:

Rovner J. (2017 June 22). Senate health bill would revamp medicaid, alter ACA guarantees, cut premium support [Web blog post]. Retrieved from address http://khn.org/news/senate-health-bill-would-revamp-medicaid-alter-aca-guarantees-cut-premium-support/


top secret folder

Ear To The Door: 5 Things Being Weighed In Secret Health Bill Also Weigh It Down

With Congress passing the American Health Care Act a few weeks, the legislation now shifts to the Senate for its final approval. Take a look at this article by Julie Rovner from Kaiser Health News and find out where we are at on the healthcare repeal process and which aspects of the AHCA legislation the Senate is bound to change.

Anyone following the debate over the “repeal and replace” of the Affordable Care Act knows the 13 Republican senators writing the bill are meeting behind closed doors.

While Senate Majority Leader Mitch McConnell (R-Ky.) continues to push for a vote before the July 4 Senate recess, Washington’s favorite parlor game has become guessing what is, or will be, in the Senate bill.

Spoiler: No one knows what the final Senate bill will look like — not even those writing it.

“It’s an iterative process,” Senate Majority Whip John Cornyn (R-Texas) told Politico, adding that senators in the room are sending options to the Congressional Budget Office to try to figure out in general how much they would cost. Those conversations between senators and the CBO — common for lawmakers working on major, complex pieces of legislation — sometimes prompt members to press through and other times to change course.

Although specifics, to the extent there are any, have largely stayed secret, some of the policies under consideration have slipped out, and pressure points of the debate are fairly clear. Anything can happen, but here’s what we know so far:

1. Medicaid expansion

The Republicans are determined to roll back the expansion of Medicaid under the Affordable Care Act. The question is, how to do it. The ACA called for an expansion of the Medicaid program for those with low incomes to everyone who earns less than 133 percent of poverty (around $16,000 a year for an individual), with the federal government footing much of the bill. The Supreme Court ruled in 2012 that the expansion was optional for states, but 31 have done so, providing new coverage to an estimated 14 million people.

The Republican bill passed by the House on May 4 would phase out the federal funding for those made eligible by the ACA over two years, beginning in 2020. But Republican moderates in the Senate want a much slower end to the additional federal aid. Several have suggested that they could accept a seven-year phaseout.

Keeping the federal expansion money flowing that long, however, would cut into the bill’s budget savings. That matters: In order to protect the Senate’s ability to pass the bill under budget rules that require only a simple majority rather than 60 votes, the bill’s savings must at least match those of the House version. Any extra money spent on Medicaid expansion would have to be cut elsewhere.

2. Medicaid caps

A related issue is whether and at what level to cap federal Medicaid spending. Medicaid currently covers more than 70 million low-income people. Medicaid covers half of all births and half of the nation’s bill for long-term care, including nursing home stays. Right now, the federal government matches whatever states spend at least 50-50, and provides more matching funds for less wealthy states.

The House bill would, for the first time, cap the amount the federal government provides to states for their Medicaid programs. The CBO estimated that the caps would put more of the financial burden for the program on states, who would respond by a combination of cutting payments to health care providers like doctors and hospitals, eliminating benefits for patients and restricting eligibility.

The Medicaid cap may or may not be included in the Senate bill, depending on whom you ask. However, sources with direct knowledge of the negotiations say the real sticking point is not whether or not to impose a cap — they want to do that. The hurdles: how to be fair to states that get less federal money and how fast the caps should rise.

Again, if the Senate proposal is more generous than the House’s version, it will be harder to meet the bill’s required budget targets.

3. Restrictions on abortion coverage and Planned Parenthood

The senators are actively considering two measures that would limit funding for abortions, though it is not clear if either would be allowed to remain in the bill according to the Senate’s rules. The Senate Parliamentarian, who must review the bill after the senators complete it but before it comes to the floor, will decide.

The House-passed bill would ban the use of federal tax credits to purchase private coverage that includes abortion as a benefit. This is a key demand for a large portion of the Republican base. But the Senate version of the bill must abide by strict rules that limit its content to provisions that directly impact the federal budget. In the past, abortion language in budget bills has been ruled out of order.

4. Reading between the lines

A related issue is whether House language to temporarily bar Planned Parenthood from participating in the Medicaid program will be allowed in the Senate.

While the Parliamentarian allowed identical language defunding Planned Parenthood to remain in a similar budget bill in 2015, it was not clear at the time that Planned Parenthood would have been the only provider affected by the language. Planned Parenthood backers say they will argue to the Parliamentarian that the budget impact of the language is “merely incidental” to the policy aim and therefore should not be allowed in the Senate bill.

5. Insurance market reforms

Senators are also struggling with provisions of the House-passed bill that would allow states to waive certain insurance requirements in the Affordable Care Act, including those laying out “essential” benefits that policies must cover, and those banning insurers from charging sicker people higher premiums. That language, as well as an amendment seeking to ensure more funding to help people with preexisting conditions, was instrumental in gaining enough votes for the bill to pass the House.

Eliminating insurance regulations imposed by the ACA are a top priority for conservatives. “Conservatives would like to clear the books of Obamacare’s most costly regulations and free the states to regulate their markets how they wish,” wrote Sen. Mike Lee (R-Utah), who is one of the 13 senators negotiating the details of the bill, in an op-ed in May.

However, budget experts suggest that none of the insurance market provisions is likely to clear the Parliamentarian hurdle as being primarily budget-related.

See the original article Here.

Source:

Rovner J. (2017 June 16). Ear to the door: 5 things being weighed in secret health bill also weigh it down [Web blog post]. Retrieved from address http://khn.org/news/ear-to-the-door-5-things-being-weighed-in-secret-health-bill-also-weigh-it-down/


did you know

The Facts on the GOP Health Care Bill

Do you know all the facts behind the American Health Care Act (AHCA)? Check out this article by Fact Check and find out about all the details behind the GOP new health care legislation.

House Republicans released their replacement plan for the Affordable Care Act on March 6. How does the GOP’s American Health Care Act differ from the ACA? We look at the major provisions of the amended version of the bill, as of May 4. (The legislation passed the House on May 4 and now goes to the Senate for consideration.)

Is there a requirement to have insurance or pay a tax?

No. For all months after Dec. 31, 2015, the bill eliminates the tax penalties that the ACA imposes on nonexempt individuals for not having health insurance, as well as employers with 50 or more full-time workers who do not offer health insurance to their employees. (To be clear, unless this bill becomes law quickly, those filing their 2016 tax returns will still be subject to the penalty.)

Are insurance companies required to offer coverage regardless of preexisting conditions?

Yes, but there’s a penalty for not having continuous coverage. Under both the ACA and the GOP bill, insurers can’t deny coverage to anyone based on health status. Under the GOP bill, they are required, however, to charge 30 percent higher premiums for one year, regardless of health status, to those entering the individual market who didn’t have continuous coverage, which is defined as a lapse of coverage of 63 days or more over the previous 12 months.

However, an amendment proposed in late April allows states to obtain a waiver that would enable insurers to charge more to people with preexisting conditions who do not maintain continuous coverage. Such policyholders could be charged higher premiums based on health status for one year. After that, provided there wasn’t another 63-day gap, the policyholder would get a new, less expensive premium that was not based on health status. This change would begin in 2019, or 2018 for those enrolling during special enrollment periods.

States with such a waiver would also have to have either a “risk mitigation program,” such as a high-risk pool, or participate in a new Federal Invisible Risk Sharing Program, as a House summary of the amendment says. Beyond those programs, another amendment to the bill would provide $8 billion in federal money over five years to financially aid those with preexisting conditions who find themselves facing higher premiums in waiver states.

For more on this waiver program, see our May 4 article, “The Preexisting Conditions Debate.”

What happens to the expansion of Medicaid?

It will be phased out.

Prior to the ACA, Medicaid was available to groups including qualified low-income families, pregnant women, children and the disabled. The ACA expanded eligibility to all individuals under age 65 who earn up to 138 percent of the federal poverty level (about $16,643 a year for an individual), but only in states that opted for the expansion. Thirty-one states and the District of Columbia have opted in to the expansion, which includes enhanced federal funding, so far. More than 11 million newly eligible adults had enrolled in Medicaid through March 2016, according to an analysis by the Kaiser Family Foundation of data from the Centers for Medicare & Medicaid Services.

Under the Republican health care plan, no new enrollment can occur under this Medicaid expansion, with enhanced federal funds, after Dec. 31, 2019. States that haven’t already opted in to the expansion by March 1, 2017, can’t get the ACA’s enhanced federal funding for the expansion-eligible population.

To be clear, the bill doesn’t eliminate the Medicaid expansion coverage for those who are enrolled prior to 2020 in the current expansion states. But if those enrollees have a break in coverage for more than one month after Dec. 31, 2019, they won’t be able to re-enroll (unless a state wanted to cover the additional cost itself).

The Republican plan includes another notable change to Medicaid. It would cap the amount of federal funding that states can receive per Medicaid enrollee, with varying amounts for each category of enrollee, such as children, and the blind and disabled. Currently, the federal government guarantees matching funds to states for qualifying Medicaid expenses, regardless of cost. Under the GOP bill, states have the option of receiving a block grant, rather than the per-capita amounts, for traditional adult enrollees and children – not the elderly or disabled. States also have the option of instituting work requirements for able-bodied adults, but not pregnant women.

Are insurers required to cover certain benefits?

The latest version of the bill requires insurers to provide 10 essential health benefits mandated by the ACA, unless a state obtains a waiver to set its own benefit requirements. The ACA’s essential health benefits required insurance companies to cover 10 health services: ambulatory, emergency, hospitalization, maternity and newborn care, mental health and substance use disorder services, prescription drugs, rehabilitative services and devices, laboratory services, preventive care and chronic disease management, and pediatric services including dental and vision.

Beginning in 2020, states could set their own essential health benefits by obtaining a waiver.

At that point, state requirements could vary, as they did before the ACA was enacted. For instance, a 2009 report from the Council for Affordable Health Insurance, a group representing insurance companies, said 47 states had a mandate for emergency service benefits, while 23 mandated maternity care and only three mandated prescription drug coverage.

State Medicaid plans would not have to meet the essential health benefits requirement after Dec. 31, 2019.

Are there subsidies to help individuals buy insurance? How do they differ from the Affordable Care Act?

There are two forms of financial assistance under the ACA: premium tax credits (which would change under the GOP plan) and cost-sharing to lower out-of-pocket costs (which would be eliminated).

Let’s look at the premium tax credits first. They would be available to individuals who buy their own coverage on the individual, or nongroup, market. But instead of a sliding scale based on income, as under the ACA, the Republican plan’s tax credits are based on age, with older Americans getting more. (The plan, however, allows insurers to charge older Americans up to five times more than younger people, as we will explain later.)

The ACA tax credits also take into account the local cost of insurance, varying the amount of the credit in order to put a cap on the amount an individual or family would have to spend for their premiums. The Republican plan doesn’t do that. (See this explanation from the nonpartisan Kaiser Family Foundation for more on how the ACA tax credits are currently calculated.)

There are income limits under the GOP bill. Those earning under $75,000, or $150,000 for a married couple, in modified adjusted gross income, get the same, fixed amounts for their age groups — starting at $2,000 a year for those under age 30, increasing in $500 increments per decade in age, up to $4,000 a year for those 60 and older. The tax credits are capped at $14,000 per family, using the five oldest family members to calculate the amount. This new structure would begin in 2020, with modifications in 2018 and 2019 to give more to younger people and less to older people.

For those earning above those income thresholds, the tax credit is reduced by 10 percent of the amount earned above the threshold. For instance, an individual age 60 or older earning $100,000 a year would get a tax credit of $1,500 ($4,000 minus 10 percent of $25,000).

That hypothetical 60-year-old gets $0 in tax credits under the ACA. But if our 60-year-old earns $30,000 a year, she would likely get more under the ACA than the GOP plan: In Franklin County, Ohio, for instance, the tax credit would be $6,550 under the ACA in 2020 and $4,000 under the Republican plan. (This interactive map from the KFF shows the difference in tax credits under the health care plans.)

As for the cost-sharing subsidies available now under the ACA — which can lower out-of-pocket costs for copays and other expenses for those earning between 100 percent and 250 percent of the federal poverty level  — those would be eliminated in 2020. However, the GOP bill sets up a Patient and State Stability Fund, with $100 billion in funding over nine years with state matching requirements, that can be used for various purposes, including lowering out-of-pocket costs of a state’s residents. An additional $30 billion was added to this fund for other programs: $15 billion would be used to set up the Federal Invisible Risk Sharing Program, another reinsurance program, and $15 billion is set aside specifically for maternity and mental health coverage.

Small-business tax credits would end in 2020. The health insurance marketplaces stay, but the tax credits can be used for plans sold outside of those marketplaces. And the different levels of plans (bronze, silver, etc.) based on actuarial value (the percentage of costs covered) are eliminated; anyone can buy a catastrophic plan, not just those under 30 as is the case with the ACA.

What does the bill do regarding health savings accounts?

It increases the contribution limits for tax-exempt HSAs, from $3,400 for individuals and $6,750 for families now to $6,550 and $13,100, respectively. It allows individuals to use HSA money for over-the-counter drugs, something the ACA had limited to only over-the-counter drugs for which individuals had obtained a prescription.

There were so-called winners and losers in the individual market under the ACA. How would that change under this bill?

Both the current law and the Republican proposal primarily impact the individual market, where 7 percent of the U.S. population buys its own health insurance. As we’ve written many times, how the ACA affected someone in this market depended on their individual circumstances — and the same goes for the House Republicans’ plan. In general, because the ACA said that insurers could no longer vary premiums based on health status and limited the variation based on age, older and sicker individuals could have paid less than they had before, while younger and healthier individuals could have paid more.

The GOP plan allows a wider variation in pricing based on age: Insurers can charge older individuals up to five times as much as younger people, and states can change that ratio. Under the ACA, the ratio was 3:1. So, younger individuals may see lower premiums under this bill, while older individuals could see higher premiums.

Older Americans do get higher tax credits than younger Americans under the Republican plan, but whether that amounts to more or less generous tax credits than under the ACA depends on other individual circumstances, including income and local insurance pricing. Those with low incomes could do worse under the GOP plan, while those who earned too much to qualify for tax credits under the ACA (an individual making more than $48,240) would get tax credits.

We would encourage readers to use the Kaiser Family Foundation’s interactive map to see how tax credits may change, depending on various circumstances. “Generally, people who are older, lower-income, or live in high-premium areas (like Alaska and Arizona) receive larger tax credits under the ACA than they would under the American Health Care Act replacement,” KFF says. “Conversely, some people who are younger, higher-income, or live in low-premium areas (like Massachusetts, New Hampshire, and Washington) may receive larger assistance under the replacement plan.”

A few weeks after the bill was introduced, House Republicans, through an amendment, made a change to a tax provision to create placeholder funding that the Senate could use to boost tax credits for older Americans, as we explain in the next answer.

Also, some individuals with preexisting conditions could see higher premiums under the legislation, if they don’t maintain continuous coverage and live in states that received waivers for pricing some plans based on health status.

Which ACA taxes go away under the GOP plan?

Many of the ACA taxes would be eliminated.

As we said, the bill eliminates all fines on individuals for not having insurance and large employers for not offering insurance. Also, beginning in 2017, for high-income taxpayers, the bill eliminates the 3.8 percent tax on certain net investment income. The 0.9 percent additional Medicare tax on earnings above a threshold stays in place until 2023. The bill repeals the 2.3 percent tax on the sale price of certain medical devices in 2017 and the 10 percent tax on indoor tanning services (effective June 30, 2017). It also gets rid of the annual fees on entities, according to the IRS, “in the business of providing health insurance for United States health risks,” as well as fees on “each covered entity engaged in the business of manufacturing or importing branded prescription drugs.”

It reduces the tax on distributions from health savings accounts (HSAs) not used for qualified medical expenses from 20 percent to 10 percent and the tax on such distributions from Archer medical savings accounts (MSAs) from 20 percent to 15 percent. It lowers the threshold for receiving a tax deduction for medical expenses from 10 percent to 5.8 percent of adjusted gross income. (Originally, the bill lowered the threshold to 7.5 percent, but House Republicans changed that to create some flexibility for potential funding changes the Senate could make. A congressional aide told us that the change is expected to provide $85 billion in spending over 10 years that the Senate could use to boost the tax credit or provide other support for Americans in the 50-64 age bracket.)

And from 2020 through 2025, the bill suspends the so-called “Cadillac tax,” a 40 percent excise tax on high-cost insurance plans offered by employers.

Will young adults under the age of 26 still be able to remain on their parents’ plans?

Yes. The bill does not affect this provision of the ACA.

How does the bill treat abortion? 

It puts a one-year freeze on funding to states for payments to a “prohibited entity,” defined as one that, among other criteria, provides abortions other than those due to rape, incest or danger to the life of the mother. This would include funding to Planned Parenthood under Medicaid, which is most of the organization’s government funding. Under current law, Planned Parenthood can’t use federal money for abortions, except those in cases of rape, incest or risk to the mother’s life.

Also under the GOP plan, tax credits can’t be used to purchase insurance that covers abortion beyond those three exceptions. Health insurance companies would still be able to offer “separate coverage” for expanded coverage of abortions, which individuals could then purchase on their own.

How many people will have insurance under the plan, as compared with the ACA?

The nonpartisan Congressional Budget Office estimated that the legislation, as passed by the House, would lead to 14 million fewer people having insurance in 2018 and 23 million fewer insured in 2026, compared with current law under the ACA.
How much will the bill cost, as compared with the ACA?

CBO estimated that the legislation passed by the House would reduce federal deficits by $119 billion over the next decade, 2017-2026. It would reduce revenues by $992 billion, mostly by repealing the ACA’s taxes and fees, and reduce spending by $1.11 trillion for a net savings of $119 billion, according to CBO.

See the original article Here.

Source:

Robertson L., Gore D., Schipani V.  (2017 May 24). The facts on the GOP health care bill [Web blog post]. Retrieved from address http://www.factcheck.org/2017/03/the-facts-on-the-gop-health-care-bill/


Health Law’s 10 Essential Benefits: A Look At What’s At Risk In GOP Overhaul

Great article from Kaiser Health News about all the changes that could be coming with the ACA overhaul by Michelle Andrews

As Republicans look at ways to replace or repair the health law, many suggest shrinking the list of services insurers are required to offer in individual and small group plans would reduce costs and increase flexibility. That option came to the forefront last week when Seema Verma, who is slated to run the Centers for Medicare & Medicaid Services in the Trump administration, noted at her confirmation hearing that coverage for maternity services should be optional in those health plans.

Maternity coverage is a popular target and one often mentioned by health law critics, but other items also could be watered down or eliminated.

There are some big hurdles, however. The health law requires that insurers who sell policies for individuals and small businesses cover at a minimum 10 “essential health benefits,” including hospitalization, prescription drugs and emergency care, in addition to maternity services. The law also requires that the scope of the services offered be equal to those typically provided in employer coverage.

“It has to look like a typical employer plan, and those are still pretty generous,” said Timothy Jost, an emeritus professor at Washington and Lee University Law School in Virginia who is an expert on the health law.

Since the 10 required benefits are spelled out in the Affordable Care Act, it would require a change in the law to eliminate entire categories or to water them down to such an extent that they’re less generous than typical employer coverage. And since Republicans likely cannot garner 60 votes in the Senate, they will be limited in changes that they can make to the ACA. Still, policy experts say there’s room to “skinny up” the requirements in some areas by changing the regulations that federal officials wrote to implement the law.

Habilitative Services

The law requires that plans cover “rehabilitative and habilitative services and devices.” Many employer plans don’t include habilitative services, which help people with developmental disabilities such as cerebral palsy or autism maintain, learn or improve their functional skills. Federal officials issued a regulation that defined habilitative services and directed plans to set separate limits for the number of covered visits for rehabilitative and habilitative services.

Those rules could be changed. “There is real room for weakening the requirements” for habilitative services, said Dania Palanker, an assistant research professor at Georgetown University’s Center on Health Insurance Reforms who has reviewed the essential health benefits coverage requirements.

Oral And Vision Care For Kids

Pediatric oral and vision care requirements, another essential health benefit that’s not particularly common in employer plans, could also be weakened, said Caroline Pearson, a senior vice president at Avalere Health, a consulting firm.

Mental Health And Substance Use Disorder Services

The health law requires all individual and small group plans cover mental health and substance use disorder services. In the regulations the administration said that means those services have to be provided at “parity” with medical and surgical services, meaning plans can’t be more restrictive with one type of coverage than the other regarding cost sharing, treatment and care management.

“They could back off of parity,” Palanker said.

Prescription Drugs

Prescription drug coverage could be tinkered with as well. The rules currently require that plans cover at least one drug in every drug class, a standard that isn’t particularly robust to start with, said Katie Keith, a health policy consultant and adjunct professor at Georgetown Law School. That standard could be relaxed further, she said, and the list of required covered drugs could shrink.

Preventive And Wellness Services And Chronic Disease Management

Republicans have discussed trimming or eliminating some of the preventive services that are required to be offered without cost sharing. Among those requirements is providing birth control without charging women anything out of pocket. But, Palanker said, “if they just wanted to omit them, I expect that would end up in court.”

Pregnancy, Maternity And Newborn Care

Before the health law passed, just 12 percent of health policies available to a 30-year-old woman on the individual market offered maternity benefits, according to research by the National Women’s Law Center. Those that did often charged extra for the coverage and required a waiting period of a year or more. The essential health benefits package plugged that hole very cleanly, said Adam Sonfield, a senior policy manager at the Guttmacher Institute, a reproductive health research and advocacy organization.

“Having it in the law makes it more difficult to either exclude it entirely or charge an arm and a leg for it,” Sonfield said.

Maternity coverage is often offered as an example of a benefit that should be optional, as Verma advocated. If you’re a man or too old to get pregnant, why should you have to pay for that coverage?

That a la carte approach is not the way insurance should work, some experts argue. Women don’t need prostate cancer screening, they counter, but they pay for the coverage anyway.

“We buy insurance for uncertainty, and to spread the costs of care across a broad population so that when something comes up that person has adequate coverage to meet their needs,” said Linda Blumberg, a senior fellow at the Health Policy Center at the Urban Institute.

See the original article Here.

Source:

Andrews M. (2017 February 21). Health law's 10 essential benefits: a look at what's at risk in GOP overhaul [Web blog post]. Retrieved from address http://khn.org/news/health-laws-10-essential-benefits-a-look-at-whats-at-risk-in-gop-overhaul/