Is Obamacare Dead? Obamacare vs. the House and Senate bills
by Robert Jetter, Director
If someone tells you they know what’s going to happen to healthcare in the next year, they are absolutely lying… or psychic.
Much of the proposed changes are up for debate and, at this writing, there is doubt that the Senate version will be passed. Trump has called the House legislation “mean” after an ostentatious Rose Garden celebration in the wake of its passage, leading one to believe that he has little clue how to proceed although he continually calls Obamacare dead.
Mr. Trump – amongst others – continues to pander to the idea that Obamacare and the Affordable Care Act ("ACA") are somehow different, and while many Americans decry Obamacare as an expensive failed experiment, they laud the coverage they have received due to the Affordable Care Act. Ask Iowans and Hoosiers if they are willing to return to the days when a hernia was considered a pre-existing condition and could be responsible for a three-fold increase in their premiums. Many will tell you because of the Trump "fake news" that they need their ACA coverage but they really hate Obamacare. Whoa!
All we can tell you is that certain states, California among them, seem committed to some form of the Affordable Care Act despite what is happening in Washington, feeling benefits of reducing the number of uninsured patients far outweighs the disadvantages. In our meetings and discussions with Covered California, they continue to assure us that, while funding for Medi-Cal may be reduced, the exchange (or Covered California marketplace) will remain in place. Moreover, even at this writing, California is one of the states considering a “Medicare-for-all” type of bill – a sort of single-payer design that would offer a base plan for every citizen in the state.
What are the differences between the Senate and House versions of ACA reform?
According to the Associated Press, the Senate Republican health care bill would guarantee immediate assistance for insurance markets that are struggling in many states. Yet overall, it would do much the same thing as its House counterpart perhaps over a lengthy time: less federal money for health insurance and a greater likelihood that more Americans will be uninsured.
Below follows a rather detailed explanation that you all have been asking what’s covered now and what might be covered under the existing proposals from the House and the Senate.
Medicaid / Medi-Cal
Currently, states have the option to expand Medicaid to cover more low-income adults with the Feds picking up a generous share of the cost, no less than 90 percent. Medicaid covers some 70 million people, from newborns to elderly nursing home residents and most importantly disabled adults. The House bill would effectively eliminate expanded Medicaid beginning in 2020. The Senate would stretch out the elimination period to 2023, exempting special needs children.
Insurance companies raised rates to compensate for the taxes necessary to provide for the two types of ACA subsidies for those without employer coverage – subsidies based on income as well help with deductibles and co-pays (cost sharing reductions or CSRs) with the popular “silver” plan being the ideal. Under the House proposals, subsidies would only be based on age, eliminating (almost immediately) CSRs. The Senate would use a three-tiered approach – income, age and geography. However, its ideal plan is the “bronze,” the plan with the highest co-pays and deductibles ($6,800) with no coverage for lab tests, some medications and x-rays. We often describe the bronze plan as the most expensive cheap plan you'll ever have. Instead of focusing on the silver plan, the Senate would continue the CSRs for a time to calm the insurance markets.
Under the ACA, insurers cannot charge oldest customers more than three times what they charge young adults. This is not the case with the proposed Senate or House plans which loosens the age restrictions so insurers can charge older patients up to five times more, presumably because they will use more health services than young adults.
Mandates to carry insurance coverage
Insurers are lobbying the House and Senate to maintain the ACA law that requires those who can afford coverage to have a policy or risk IRS fines. The idea is that if everyone has coverage, those not using the coverage will balance out the cost for those who are using what insurance companies call the “Law of Large Numbers” and used in writing employer group coverage for years. However, both the Senate and House repeal that mandate immediately. That begs the question: if a 27 year old rams his car into a wall, who pays the medical bills when he goes to the emergency room and ducks out on the bill?
Standard Health Benefits
While the ACA requires all insurance plans to cover ten broad “essential services,” including hospitalization, maternity and mental health treatment among others, both Senate and House proposals allow states to seek waivers for the requirement. What this means is that rehabilitation for the opioid epidemic is subject to elimination in some states, coverage for mental health maladies would go away as well as potentially “essential” benefits as hospitalizations and doctor visits.
Under ACA, taxes were raised on both health care companies and upper-income earners to finance the expansion but both the House and the Senate cut taxes by almost $1 trillion over the next decades, a benefit for those same entities. It is undoubtable that the insurance companies will NOT roll back the rates to reflect the tax cuts. Historically, once raised insurance rates do not fall.
Like any massive policy overhaul in a system as large as America, health reform is sure to continue to leave some people out in the cold. Take California, for example. Under strict California law, any and all insurance products sold in the State are mandated to cover family planning, including abortion. Under the House bills, abortion is forbidden in coverage by private plans and any tax benefits derived from the sale of these plans just would not exist in California. The House bill also defunds Planned Parenthood. The Senate bill is bit more lenient but essentially with the same result.