Confused about Obamacare, Medicare and insurance options in the new year? Parade’s Health Care Detective, Frank Lalli, makes sense of it all.
New presidents and new years bring change. But whatever is going to happen to health care under President Donald J. Trump, chances are you are in for a wait. Little is likely to happen in 2017, experts believe or perhaps not even until 2019. Rather than “repealing and replacing” Obamacare, look for President Trump to “repeal and delay” the following major reforms.
That means that if Obamacare provides your best affordable health plan with federal subsidies or without them don’t hesitate to sign up for 2017. People are getting that message. Shortly before Christmas, the Obama administration reported that a record 6.4 million people had already enrolled in Affordable Care Act health plans for next year. Open enrollment runs to the end of January.
As for the other health care moves, many Americans are watching for closely. Here’s what the experts say:
Despite Republican Speaker of the House Paul Ryan’s proposal to turn Medicare into a “premium support” voucher program, there’s little chance President Trump will go along.
Vice President–elect Mike Pence, on the other hand, seems poised to lead a drastic effort to defund Medicaid and require the poor to at least seek a job to keep their health care.
An idea involving private health savings accounts might help millions of workers this year.
What Will Happen to Obamacare?
As a candidate Trump vowed to “repeal and replace” Obamacare immediately. President Trump can repeal some elements of the ACA in his first 100 days. However, he doesn’t have the filibuster-proof votes to pass a full replacement scheme—and Republicans sharply disagree about what they want in a sweeping plan affecting 17 percent of the nation’s economy.
It’s likely Trump will postpone stripping away the ACA’s coverage of 22 million Americans for several years until he can hammer out a realistic replacement scheme with some Democratic support that he can roll out in a “simultaneous” shift from Obamacare to Trumpcare—without risking political suicide.
Candidate Trump promised a plan that would cover everyone, offer more choice and cost far less than Obamacare. But independent researchers say the plan he campaigned on would cause 22 million people to lose their insurance, add only as few as 1.1 million enrollees and pile on upward of $330 billion onto the nation’s debt over 10 years.
Experts on the right and left say the new administration must tread carefully to avoid a nationwide backlash fueled by sympathetic stories about millions of individuals losing their coverage.
“Without a viable replacement, people will die years before they should, and infant mortality will rise,” says Michael Fine, M.D., the former head of the Rhode Island’s Department of Health. In fact, Families USA, an ACA advocate, estimates up to 30,000 people a year could die without insurance.
And from a political point of view, roughly one-third of the 22 million who are insured through the ACA are poor and working class whites—the very people who energized Trump’s rallies and voted him into office.
With an overwhelming Republican House and a 52-to-48 Senate majority, President Trump could sign a repeal law in 2017 that would begin to dismantle Obamacare. Here’s what he does have the votes to do:
Strike down the individual mandate, which forces everyone to get coverage or pay a fine of around $695 or 2.5 percent of household income, whichever is greater. Although only about 8 million people paid fines averaging $485 in 2016, the mandate remains a widely disliked symbol of “government overreach.”
However, without the mandate to force healthy young people to buy health insurance on the government’s online exchanges, experts say Obamacare would inevitably descend into a “death spiral.” The plans would be weighted down by an overwhelming percentage of older members who would drive up medical costs, premiums and deductibles to unaffordable levels.
If Trump decides to strike the mandate effective immediately rather than delaying implementation, experts warn that Obamacare could unravel as early as 2018. A number of insurers will stop selling Obamacare plans, forcing customers to turn to the remaining outfits, which could jack up their premiums and deductibles sharply.
Eliminate the federal tax subsidies that help poor and middle-class people afford Obamacare health plans. About 85 percent of Obamacare members collect subsidies, and roughly three out of four of them pay monthly premiums of only around $100. The tax breaks decrease as incomes rise to the cut off: families of four earning more than $97,200 a year.
Trump wants to scrap the generous sliding-scale subsidies and offer income-tax breaks to everyone to buy private insurance. Advocates of this new plan stress that it “allows all Americans access to health care.” But that claim is problematic. First, all Americans already have access to health care. Second, under Trump’s approach, around 30 million more Americans will not be insured compared to the ACA, according to a number of independent studies. And third, people will have to pay more for their access to insurance.
Rather than basing the tax subsidies on a person’s need or income, the new breaks would be based solely on age. Under one plan favored by Trump’s pick to head the Department of Health and Human Services, Tea Party Congressman Tom Price, people 18 to 35 would get a flat $1,200 and everyone over 50 would receive $3,000.
Those breaks wouldn’t be as generous as today’s system. For example, a family of four earning $60,000 gets $8,232 in Obamacare subsidies to pay for a plan costing an average of $13,080. That same family would collect only $6,000 under one version of the new plan.
Wipe away ACA taxes that help fund around 45 percent of Obamacare. Harvard University’s John McDonough, an architect of the ACA, says that one of the cuts that would spare people making over $200,000 from contributing more for Medicare “would represent one of the largest tax cuts for high income persons ever.”
Roll back the ACA’s expansion of Medicaid, which is covering around 11 million people in 32 states who are mainly a bit above the poverty line, according to the Henry J. Kaiser Family Foundation. The rollback is especially popular in the 19 states that have refused to expand Medicaid. But President Trump may surprise people by allowing Vice President Pence to support expansion under strict rules and defund Medicaid under even stricter rules.
Still, despite all that President Trump could do with today’s Congress, he will be 8 big Senate votes shy of the filibuster-proof 60 that he needs to rewrite several key ACA rules. He cannot change the provisions that:
Allow young people to stay on their parents’ policies to age 26. Trump told 60 Minutes in November that he favored this provision and would “try to” keep it.
Force insurers to cover people regardless of their pre-existing health conditions and not charge them extra. While Trump also has said that he would “try to” preserve this protection, he has also indicated support of an insurance industry loophole: People would have to maintain “continuous coverage” to preserve their pre-existing protections. If someone lost “continuous coverage” say, when he or she got laid off, or simply couldn’t afford insurance for a while insurers would again be allowed to consider that individual’s health history and charge extra, cover the person but not the costly pre-existing illness such as cancer or diabetes, or simply refuse to insure the person. Before the ACA, some insurers rejected one-third of their applicants.
Prohibit insurers from charging women more than men or old people up to five times as much as the young, rather than ACA’s three-times limit.
Bar insurers from selling substandard plans full of coverage gaps. Obamacare plans must meet high comprehensive standards, including the “10 essential benefits” that range widely from maternity care to substance-abuse therapies. Instead, Trump wants to allow insurers to once again create cheap plans with gaping coverage holes that many unfortunate customers didn’t discover until they got sick and couldn’t collect.
“We would be moving backwards,” said Donald Berwick, the former head of the Centers for Medicare and Medicaid Services, part of the Department of Health and Human Services, under President Obama.
Will I Be Able to Buy Health Insurance Across State Lines?
Candidate Trump repeatedly called for a federal law freeing insurance companies to sell policies across state lines to spike competition and drive down coverage costs. But President Trump may run into stiff opposition from the very entities he wants to help insurance companies and health care consumers.
Experts expect the powerful insurers—including UnitedHealthcare, Aetna and Anthem to fight fiercely and effectively in state houses and within their provider networks against out-of-state competition.
One study found that no more than two companies command at least 50 percent of the commercial markets in 45 of the 50 states. BlueCross BlueShield, for example, controls around 86 percent of the Alabama market. The big players won’t surrender their state domination without a fight.
Interestingly, three states Georgia, Maine and Wyoming have eliminated restrictions on out-of-state sales, and not a single insurer has entered those markets.
In addition, consumer advocates would mobilize against shady insurers who try to take advantage of the change. They expect some insurers to create cheap “Swiss Cheese” plans that are full of coverage holes in states with the least consumer protections, and then sell those lousy plans nationwide. If that happens, experts say state insurance regulators and consumer groups will rise up against the shady operators.
What Will Happen to Drug Prices?
Trump campaigned for two laws to drive down skyrocketing drug prices that are supported by wide majorities of Americans:
He said he would allow Medicare to negotiate with drug makers for lower prices. Though he suggested savings could amount to as much as $300 billion a year, Medicare spends only around $140 billion on drugs annually. The potential savings are closer to $16 billion a year.
Candidate Trump said he wanted to allow people to import prescription drugs from safe countries, including Canada, where prices are roughly half of what they are here. That’s another widely popular idea opposed by his party. Harvard’s McDonough noted that the campaign promise “has disappeared from Trump’s transition website.”
How Will Medicare Change?
Speaker Ryan keeps pushing hard to “save Medicare” by privatizing it. After Trump’s election, he said, “If you’re going to repeal and replace Obamacare, you have to address.” Not only would Ryan raise the Medicare eligibility age to 67, he would turn the nation’s most popular federal program into a “premium support” voucher system, in which Medicare enrollees would get a fixed amount of money to buy coverage each year. He insists that unless Medicare is drastically reformed, it will go bankrupt in 10 years.
But many experts, including the Center on Budget and Policy Priorities, say Ryan’s predictions are “highly misleading.” Plus, only one-quarter of Americans support a voucher scheme, including fewer than one-third of Republicans. And candidate Trump pushed back against the idea. “Abolishing Medicare, I don’t think you’ll get away with that one,” he said. “It’s actually a program that’s worked.”
In December on 60 Minutes, Ryan conceded that he hadn’t even raised Medicare with President-elect Trump, though he added, “yet.”
What Will Happen to Medicaid?
Unlike untouchable Medicare, Medicaid will likely be transformed, beginning with the expansion of the program to people earning slightly above the poverty line. Until now, most Republican states have refused to expand Medicaid. But the expansion deal Pence cut with the Obamacare administration as governor of Indiana in 2015 could provide a blueprint for other states.
Pence expanded Medicaid to 320,000 Hoosiers by creating personal savings accounts for the poor called “personal wellness and responsibility accounts,” which were modeled after private-sector health savings accounts. The accounts are financed by government taxes. Yet, people making incomes above poverty must chip in between $3 and $25 a month into the accounts, depending on income. For example, a person making $1,200 a month would have to kick in around $25. People who fail to make their payments can lose their health care for six months. The state also imposes $25 co-pays—a costly sum for people living in poverty—for people who visit the emergency room inappropriately.
Trump indicated his support of Pence’s approach by naming the former governor’s Medicaid consultant Seema Verma to head the Centers for Medicare and Medicaid. From that perch, she would have the power to promote Medicaid expansion with Indiana rules to other states, including the controversial requirement that the “able bodied” at least seek a job or risk losing their coverage—an idea the Obama administration has consistently rejected, including in Pence’s Indiana plan.
President Trump also is expected to green-light Republican efforts to defund Medicaid by providing fixed block grants to the states, rather than continuing to put up federal money to cover state costs. With block grants, if a state runs through its fixed Medicaid sum, poor people lose their health care.
Will the Insurance I Get Through My Employer Change?
Candidate Trump strongly promoted laws to enhance HSAs at work, as well as granting individuals the freedom to create their own health savings accounts. But federal law has allowed individuals to create their own HSAs for the past 12 years and the accounts are not popular. Individual HSA members have declined from 8 million in 2009 to only 2 million in 2015, while total HSA membership at work has soared to nearly 20 million.
Executives are fueling the growth of HSAs, which shift the risk of costly medical bills to their workers by encouraging them to save chunks of their salaries, before taxes, in the accounts to pay their own health costs. Today, one-third of large companies offer HSAs as their only insurance option, replacing company group health plans that cover all workers out of the corporate till. In all, companies can save up to 20 percent of their health budgets with HSAs. Those multimillion-dollar savings help explain why companies can easily afford to offer individuals on average around $1,000-a-year subsidies to open an account and keep it active.
HSAs can pay off for some. Higher income employees who can afford to save up to the limit of $3,400 a year in HSAs can accumulate large balances, assuming they stay healthy. Furthermore, it’s their money; they can take the savings account with them when they change jobs. And if President Trump gets his way, they will be able to pass on the ultimate balance to their heirs without a “death tax”.
If you are considering an HSA, remember that there is a significant catch. Everyone who opens an HSA must sign up for a high-deductible health plan, meaning an individual must shell out anywhere from $1,300 to $6,550 or more in medical expenses before the insurer kicks in a dime. Also, even with the high deductibles, premiums average $1,142 a month for families. In addition, studies show that risky and costly high deductible plans are one reason 400,000 households file for bankruptcy each year with large medical bills, even though they have health insurance.
But there is good news. Republicans led by Utah’s Sen. Orrin Hatch are proposing a law to help workers with HSAs get direct primary care with zero co-pays. The premiums would cover the costs, and workers would get nearly immediate access to doctors and specialists, either in person or through telemedicine by telephone or online. Direct primary-care supporters say wider access to quick diagnoses, appropriate prescriptions and preventive care reduces unnecessary EMT trips, wasteful ER visits and expensive hospitalizations. For example, an average telemedicine consultation costs employers $40 compared to $125 for a doctor visit.
Republicans and Democrats agree that wider access to primary care would keep people healthy and save money too.
If direct primary care were added onto existing company HSAs—with their 18 million members—the Trump administration could take credit for helping millions of Americans get invaluable primary care beginning in 2017.
Date: December 28, 2016