Wednesday, November 23, 2016

"What have you got to lose?" -- Republicans' latest lie about the ACA

As they gear up to repeal all or part of the ACA, Republicans in Congress are coming out with a new (or recycled) lie about the benefits they'll be taking away, with or without a replacement. The lie has some basis in truth, but it is a gross distortion.

Here's the ur-iteration as voiced by Sen. Johnny Isakson, R-Georgia, to Politico's Jennifer Haberkorn, who asked Isakson what might become of the roughly 20 million people who have gained coverage through the ACA. His response:
Most of those 20 million got bronze policies with a great big deductible and not much insurance, so I don’t know that there’s going to be a big backlash,..There are some minefields out there but we can deal with them.
In a note, Politico points out that "most people on the exchanges choose silver plans, which provide a higher level of benefits." But that only clears one level of the mendacity expressed here.

For starters, more than 60% of those who gained coverage through the ACA did so via the Medicaid expansion (though not in Isakson's Georgia, which has refused to implement it). Medicaid generally has no premium and covers all, or very close to all, out-of-pocket expenses. People who have obtained Medicaid coverage through the ACA express high levels of satisfaction -- 88% of new Medicaid enrollees were satisfied with their coverage, according to the Commonwealth Fund's 2016 tracking survey.

Among the previously uninsured who obtained coverage through the ACA marketplace, not only did the vast majority obtain silver plans, but a large majority of silver plan enrollees also obtained Cost Sharing Reduction (CSR) subsidies that reduce deductibles, co-pays and out-of-pocket maximums, in most cases radically. Over 60% of marketplace enrollees have incomes below 201% of the Federal Poverty Level (FPL), which qualifies them for strong CSR. and over 80% of those with incomes below that threshold buy silver plans and so obtain the CSR benefit. CSR raises the actuarial value of a silver plan to 94% for enrollees with incomes up to 150% FPL and to 87% for those in the 151-200% FPL range -- levels superior to most employer-sponsored insurance.  At the 201-250% FPL level, CSR weakens sharply, raising AV to just 73%.

In Isakson's Georgia, fully 71%* of marketplace enrollees have incomes below 201% FPL, qualifying them for "strong" CSR, and another 9% have incomes in the 200-250% FPL range, qualifying them for the much weaker CSR available at that income level. Over 80% of those eligible for CSR obtained the benefit, and some 90% of them obtained "strong"CSR.  Nationwide, surveys indicate that a half of marketplace enrollees were uninsured at the time they obtained coverage. It's highly likely that the vast majority of the previously-uninsured in Georgia who obtained coverage through the marketplace had incomes under 200% FPL. In fact, in Georgia, just 17% of all marketplace enrollees bought bronze plans.

It's true that a significant portion of enrollees in the ACA marketplace, and a larger percentage in the individual market as a whole, select bronze plans, which have an actuarial value of just 60% and deductibles usually north of $6,000. As of March 31 of this year, nationally, 22% of marketplace enrollees were in bronze plans. Off-marketplace, bronze selection is higher, probably in the range of 33%. That's a weakness of the ACA -- but one that affects probably 15-20% of the previously uninsured who obtained private coverage through the marketplace.

Slicing the data a bit differently, I reported earlier this year that the average weighted actuarial value of health plans obtained on was 80% -- and 86% for enrollees with incomes under 201% FPL. CMS, following form, later reported the median deductible for plans sold on was $850.

Exhibit B for our emerging false meme is Senator Bill Cassidy, R-Louisiana, who is co-sponsor with Rep. Pete Sessions, R-Texas, of a draft bill to radically amend (not technically replace) the ACA. Speaking to Vox's Sarah Kliff about a hypothetical beneficiary with an income at 150% FPL, Cassidy averred:
Right now, that person might have a $6,000 deductible, which for someone who makes 150 percent of the federal poverty line might as well be $6 million. 
 In fact, if "that person" lives in New Orleans, she can get a Blue Connect plan with a $100 deductible for $42 per month.

Having misrepresented ACA offerings, Cassidy, a physician,  went on to opine about what really matters to low income people seeking healthcare:
We think the key feature of this is first dollar coverage. First dollar coverage meaning that someone goes to the doctor and it is at no cost to the individual. Again, I’m coming from a setting where for 30 years I’ve worked with low- or middle-income people. And the most important thing to them is that they have first dollar coverage. They might not have $50 to spend on a copay.
Cassidy is right about this. Even modest copays can be deterrents to low income people. One part of his bill's solution is a tax credit that could buy a catastrophic plan paired with a Health Savings Account partly funded by the credit. Another component is to offer "basic health plans" with low copays but severe benefit caps, to be set by the state within limits established by HHS. Here's how such coverage would work, as summarized by Timothy Jost, law professor at Washington and Lee University:
Basic health insurance would have low annual limits as specified by regulation. Although the bill does not say this specifically, this coverage could also have low cost sharing since the insurer would be protected from risk exposure for high-cost claims. Many low-income people with limited assets might prefer low-cost-sharing, low annual limit coverage.
Once an insured with limited benefit health insurance coverage reached the coverage limit, the insured would only be liable for the cost of subsequently incurred health care services to the extent that the bankruptcy valuation of the insured’s estate (taking into account exemptions allowed under the bankruptcy law) exceeded the annual limit on the policy. (Thus if an individual had a bankruptcy estate with $100,000 and coverage to $100,000, the individual would owe nothing.) Providers, on the other hand, would have no obligation to treat individuals protected by this provision without advance or guarantee of payment once coverage was exhausted, except in emergencies. Although one would expect that providers would routinely obtain payment guarantees, thus evading the law’s protections, interesting ethical conundrums involving abandonment would arise for providers who failed to do so.
If this same person had, say, $200,000 worth of home equity and/or other assets, and bills exceeding that amount, he'd be on the hook for $100,000, plus whatever further amount the healthcare provider(s) required him to guarantee. Those assets would be at risk, except to the extent that they are protected by state exemptions as recognized through federal bankruptcy law. Great coverage, unless you get really sick.

The high out-of-pocket costs and high premiums to which many are subject in the post-ACA individual market are legitimate targets of criticism -- and amendment. But smearing the ACA's offering offerings to the poor and uninsured as essentially bronze-level coverage for all doesn't bode well for the cures Republicans are likely enact.

HHS reports that 76% of Georgia enrollees who reported income on had incomes under 201% FPL. I assume that the 6% who did not report income almost exclusively have incomes above subsidy level -- hence my lower figure (71%)

1 comment:

  1. Good column as always. One somewhat sad fact about health care debates is that you can read different articles ten years apart and the same issues are on the table.

    For example, for the first decade of Minnesota Care, the Basic Health plan we both like, there was a $10,000 cap on hospital bills. This was a key method of having near zero deductibles and still coming in under budget.

    There was no rebellion from hospitals. They were glad to collect $10,000 on behalf of people who would have paid nothing or declared bankruptcy if they were uninsured.

    Cassidy was a physician and he understand this.