The end of Obamacare
Editor's note: This is the first in a three-part series on the future of the Affordable Care Act in light of Republicans' pledge to dismantle President Barack Obama's signature health care law when they take control of Congress and the White House next year.
Kim Altland has undergone more than 60 hospital admissions and 50 surgeries in his 47 years of life. Born with a congenital disability, the York County man lost his job in 2011 and with it the employer-provided health insurance that helped offset the high cost of treatment and care.
One of the most prevalent campaign talking points during the presidential election might not end up having a direct effect on the majority of Pennsylvanians who get their insurance from their employers, but for almost 20 million newly covered Americans such as Altland, it could mean big changes.
Repealing President Barack Obama's signature health care law, also known as Obamacare, has been a top priority for congressional Republicans, citing a costly burden on taxpayers, health care providers and insurers. The act went into effect in March 2010 and requires Americans to get health insurance coverage or face a federal income tax penalty. It also set up the framework for state and federal health insurance marketplaces to sell individual health insurance plans.
President-elect Donald Trump has repeatedly called the Affordable Care Act a “disaster” and vowed to ask Congress to repeal and replace it on his first day in office. It’s a campaign promise he might be able to keep with Republican control of both houses of Congress in 2017.
However, just 5.5 percent of Pennsylvania adults purchased their health insurance in 2016 through insurance marketplaces set up under the Affordable Care Act.
The vast majority of Pennsylvanians and Americans get their health insurance through traditional employer-sponsored plans, Medicare and other public insurance options.
According to the U.S. Department of Health and Human Services, 439,238 Pennsylvanians, or less than 6 percent of adults ages 18 to 65, signed up for coverage through exchanges set up by the ACA. Another 679,718 newly eligible residents have signed up for Medicaid since Pennsylvania expanded the federal and state partnership program's reach in 2015 — up from 2,256,192 commonwealth residents who had signed up for Medicaid in December 2014, according to the state Department of Human Services.
Altland was one of those. After he was laid off for failing to meet a quota he said he was unable to reach due to his medical condition, he signed up for expanded Medicaid. It doesn't cover everything, but it does cover his appointments and the bulk of his medical items. However, he's not sure if the items he's had to fight to get covered will be covered in the future.
“Right now I’m kind of sitting in limbo,” Altland said.
Cost, restrictions: The Congressional Budget Office, which provides nonpartisan analysis for Congress, estimates federal subsidies, taxes and penalties associated with health insurance coverage for people younger than 65 will cost the federal government $660 billion in 2016. Over the next decade, that number is expected to keep growing to more than a $1 trillion.
Rising premiums, blamed on an overabundance of sicker, more costly enrollees and difficulty in drawing sign-ups from younger, healthier individuals are often-cited complaints about the marketplace’s stability. In response, federal legislators have voted multiple times in the last six years to repeal the ACA with nothing to show as a result — the most recent attempt at repeal was vetoed by Obama in January. That version included a two-year delay.
Virtually all Republicans want to get rid of the health law’s mandates that individuals buy coverage or risk IRS fines and that large employers insure workers.
They also want to erase taxes on higher-earning people and the health care sector, money that has been funding the ACA, but would like to retain parts of the law guaranteeing coverage for people with pre-existing medical problems and keeping children younger than 26 on family plans.
U.S. Rep Scott Perry, R-York County, agrees and said it’s in the best interest of his constituents for him to work on repealing the law.
What comes next, he said, is still being hashed out, but it’s likely Republicans will move swiftly to repeal the law with a one- or two-year delay and then work out the specifics.
“It won’t be one day the ACA is in place and the next day it’s not,” Perry said. “It will likely be dismantled over a period of time because it’s such a large and sweeping policy.”
Solutions could include high-risk pools, which is catastrophic insurance available to the very sick; expanding health savings accounts to cover expenses such as day care for children and elder care for families; and loosening the restrictions on health care providers and facilities.
Allowing insurers to sell across state lines could also increase competition, he said.
“If we’re truly going to have a competitive insurance marketplace, insurers aren’t going to want to cover people with pre-existing conditions,” Perry said. “We have to be cognizant of that, obviously.”
A spokeswoman for Sen. Pat Toomey, R-Pa., said the senator favors passing along the tax benefits given to employers to those buying on the private market, selling insurance across state lines to increase competition, enacting tort reform to prevent against “excessive litigation” and permitting small businesses and groups to pool together to form association health plans.
“Instead of giving the government more power, Toomey believes the best way to lower health care costs is to empower patients and increase transparency within the health care system," spokeswoman E.R. Anderson said.
Procedures: Trump’s plan for his first 100 days in office includes repealing the ACA and replacing it with health savings accounts, the ability to purchase health insurance across state lines and letting states manage their own Medicaid funds, doled out by the federal government in a lump sum and subsidized more heavily by individual states.
However, because Republicans will control the Senate by just 52-48, Congress will first have to approve special budget procedures to prevent Democrats from stopping repeal legislation by filibuster. Bill-killing filibusters require 60 votes to end.
Those special rules would apply only to items that affect the federal budget. Republicans, for example, would need a simple Senate majority to end IRS penalties against people who don’t buy insurance, but they would still need 60 votes — requiring Democratic support — for other changes such as raising limits on older people’s premiums.
“Although I realize the president-elect has vowed to repeal or replace parts of (the) ACA, Republicans have never put forth a plan to achieve a comparable level of access to health care for Americans or reduce costs,” said Sen. Robert Casey, D-Pa., in a statement. “Stripping these benefits and protections from those who currently rely on the law, with no plan to replace it, would cause chaos.”
Casey said he’d prefer Congress build on the Affordable Care Act by increasing competition to reduce the cost of premiums.
“We can’t go backward like Republicans are proposing we do through repeal,” Casey said. “Repeal means 20 million Americans without health insurance coverage, higher costs for seniors on fixed incomes and fewer consumer protections for Americans who already have coverage.”
Insurers, hospitals: Hospitals, health care facilities and insurers have spent the last six years adapting to new methods of delivering care.
Under provisions of the ACA, medical providers agreed to reduced reimbursement rates for Medicaid and Medicare patients in the hope that a decrease in the uninsured rate would lead to less frequent trips to the costly emergency room for primary care. Whether that’s come to fruition depends on whom one asks, but in addition to leaving 20 million people without health insurance, the CBO estimates a repeal without a replacement would increase federal budget deficits by $137 billion over the next decade.
It’s clear that providers and insurers are heading into uncharted waters once again.
Highmark spokesman Leilyn Perri said the health insurer did not want to speculate on the future but offered some insight into what Highmark would like to see. Perri said for the viability of the marketplaces to continue, insurers must be able to offer more attractive rates to younger, healthier people.
Some insurers already pulled out of selling marketplace plans in Pennsylvania for 2017. Highmark is offering plans in neighboring Lancaster County but not York County. Earlier this month, a withdrawal from York County was attributed to higher than expected costs in the past.
“Loopholes that are allowing people to enter the system only when they get sick and receive coverage without paying premiums for months at a time need to be closed,” Perri said. “Finally, it goes without saying that the federal government must live up to its financial commitments as it partners with insurers to administer the coverage.”
The Pennsylvania-based company, along with the state’s Department of Insurance, is suing the federal government for failing to pay risk corridor provisions of the ACA. The federal government incentive was supposed to reimburse insurers for some of the losses they would sustain during the first two years of operating under the law.
A WellSpan spokesman could not speculate on the unknown, but said the health care system is committed to helping the underinsured and uninsured.
Yorkers who lose their marketplace insurance could turn to Healthy Community Network, an area partnership of physicians who offer discounted medical care based on income. Applications are available at the Community Progress Council, WellSpan Health, Memorial Hospital, Family First Health, Hanover Hospital, ForSight Vision and the York City Bureau of Health.
The Associated Press contributed to this report.
Key Affordable Care Act terms
Affordable Care Act: The president’s signature health care law, also known as Obamacare, became law in 2010. Key features of the ACA include a mandate requiring all Americans to carry health insurance or face a penalty on federal income taxes, the setup of state and federally facilitated health insurance marketplaces to sell insurance plans directly to consumers, federal tax subsidies to help with the cost of paying for health insurance and the expansion of Medicaid.
Marketplace or exchanges: Used interchangeably, the health insurance marketplace is an online portal through which Americans may purchase health insurance. A mix of state-run and state and federal partnership exchanges supplement the federal marketplace used by most states.
Minimum essential coverage: Under the ACA, all Americans must carry health insurance or face a tax penalty on federal income taxes. Minimum essential coverage includes employer-sponsored health insurance, private insurance, insurance purchased through a marketplace or government-sponsored health coverage.
Tax penalty: Under a 2014 provision of the ACA, not having health insurance for more than three months of the year means paying Uncle Sam come tax time. If you don’t have coverage and don’t qualify for an exemption, that fee is calculated as a percentage of household income or per person, whichever is higher. In 2016 and 2017 that is 2.5 percent of household income or the total yearly premium for the national average price of a Bronze plan as a percentage of income or $695 per adult and $347.50 per child up to a maximum of $2,085 per family. This fee is only paid if you go without insurance.
Subsidy: To offset the cost of paying for insurance, the federal government offers tax subsidies when selecting plans based on projected income. If your income is higher than expected and you’ve chosen to have that subsidy paid upfront to lower the monthly cost of having insurance, you are responsible for paying back that subsidy credit at tax time.
Open enrollment: The period during which anyone without a qualifying life event must enroll in health insurance to have coverage for the following calendar year. Open enrollment started Nov. 1 and ends Dec. 15 for Jan. 1 coverage. The last day to enroll in or change a 2017 health plan is Jan. 31.