The Patient Protection and Affordable Care Act (ACA or “Obamacare”) was signed into law in 2010 and provided health insurance coverage to millions of Americans through the establishment of individual marketplaces and the expansion of Medicaid. President Trump and Congressional Republicans are seeking to repeal the ACA and replace the law with provisions that they believe will strengthen the U.S. health care system. As a result, the American Health Care Act was introduced in the U.S. House of Representatives on March 6, 2017. As this bill, and other proposals are considered, it is important for cancer patients, survivors, and their loved ones to understand the potential implications of these changes. The following are some key principles under review:
The American Health Care Act would keep the following Affordable Care Act provisions:
Some patient-centered provisions that were included in the Affordable Care Act will still be included in the American Health Care Act. The key provisions that have been maintained include:
Essential Health Benefits: The ACA required insurers to cover a set of “essential health benefits” which include services like cancer screenings, mental health services, emergency services, and hospitalizations. These benefits will be maintained under the American Health Care Act.
Pre-Existing Conditions Protections: The American Health Care Act, like the Affordable Care Act, requires insurers to cover people regardless of pre-existing medical conditions.
Annual and Lifetime Cap Protections: Like the Affordable Care Act, the American Health Care Act bars insurers from setting a limit on how much they have to pay to cover someone.
Coverage for Young Adults: Young adults may stay on their parents’ insurance plans until the age of 26 under the American Health Care Act.
The American Health Care Act differs from the Affordable Care Act in the following ways:
Medicaid Expansion Repeal: The Affordable Care Act expanded Medicaid (the government-run health program to cover individuals with limited resources) to cover more individuals than ever before. Medicaid eligibility and federal funding was expanded in 32 states allowing for unprecedented health care access for people whose family income is at or below 138 percent of the federal poverty line. Medicaid is paid for by federal and state governments. Under the American Health Care Act, the federal government will continue to pay 90% of the cost to cover people in states that expanded Medicaid until 2020, at which point enrollment would “freeze.” In states that did not expand Medicaid, the federal government would provide $10 billion over five years for states to subsidize hospitals and providers who treat predominantly poor patients.
Bottom Line: Future patients may lose coverage or pay more for care if they are currently covered under Medicaid. If Medicaid enrollment freezes in 2020 as the bill intends, this would translate to caps on per beneficiary costs, potential waiting lists, higher cost sharing for beneficiaries, or limited services if budgets are cut.
Health Care Tax Credits: The current system of subsidies, which have helped individuals with low or moderate incomes afford health insurance, will be replaced with a tax credit for patients to utilize on the individual health market. This tax credit is based on age and income. People under 30 could receive up to $2,000 per year and people over 60 could receive up to $4,000 per year. The full credit would be available for individuals earning up to $75,000 and married couples earning up to $150,000. Credits are reduced for each additional $1,000 earned. Further, the current system allows insurers to charge their oldest enrollees three times as much as younger enrollees. This would change and seniors could be charged up to five times as much as young enrollees per the American Health Care Act. Subsidies to help individuals cover out-of-pocket costs such as deductibles and co-payments will also be eliminated.
Bottom Line: Some patients may see a decline in the amount of funding available to them. These changes could mean that some Americans could see a sharp decline in the amount of funding available to help them to purchase insurance coverage or pay for out-of-pocket costs.
Elimination of the Individual and Employer Mandates: In order to balance the health care system between healthy individuals (who cost less to insure) and those with pre-existing conditions and chronic diseases (who cost more to insure), the ACA included an individual mandate for insurance coverage. All people were required to purchase health care coverage because people who were sicker were more expensive to cover and healthier individuals helped to correct that imbalance, as they were required to pay for health insurance coverage as well. The American Health Care Act calls for the elimination of the individual mandate. This could cause significant disruptions as the pool of individuals in the market would quickly tip towards those who are sicker, and therefore more expensive to insure. The Republican plan will not require every individual to be covered, however they will encourage people to maintain coverage by allowing insurers to charge 30% more if there is a gap in coverage that lasts longer than 63 days. Additionally, large companies will no longer be required to provide affordable insurance to their employees.
Bottom Line: Although individuals will not be required to maintain health insurance coverage, there will be a penalty for those who do not maintain continuous coverage. If someone is unable to afford to purchase and maintain individual coverage, this penalty could make it very difficult to ever enter the insurance market.
Health Savings Accounts: Health savings accounts (HSAs) are individual accounts for people who have purchased high-deductible health insurance policies. They allow these individuals to contribute pre-tax dollars to pay for out-of-pocket expenses. HSAs are an option for people who have incomes high enough that they are able to contribute to the accounts. However, people with low- or moderate-incomes may not be able to afford to contribute to HSAs. Under the Affordable Care Act, an individual could contribute $3,400 and a family could contribute $6,750 into an HSA. Under the American Health Care Act, individuals would be able to contribute $6,550 and families could contribute $13,100 beginning in 2018.
Bottom Line: HSAs are helpful to people who can afford to contribute to them, however if an individual does not have income to set aside for medical costs, it is unlikely that they will be used by low- and moderate-incomes individuals and families. HSAs ultimately can shift more risk and obligation to individuals rather than insurance providers meaning greater out-of-pocket costs.
Patient and State Stability Fund: States will be given grant funding to achieve lower costs of care and stabilize state markets. Funds can be used to assist high-risk indivduals without employer-sponsored coverage afford insurance, provide incentives to appropriate entities to help the state stabilize premiums, reduce the cost of coverage on the individual and small group markets, promote participation in the individual and small group market, promote access to preventive services, provide payments to health care providers, or provide assistance to reduce out-of-pocket costs.
Bottom Line: The Patient and State Stability Fund will test ways to lower care which may negatively impact patients. The Patient and State Stability Fund will allow states to tailor their approaches for their specific patient population. However, funds might be used for mechanisms that have historically been ineffective such as high-risk pools.