Coffee CAHC is a twice-weekly newsletter where we round up and comment on the latest health coverage policy developments both nationally and here in Maine. We hope you find these updates helpful!
115th Congress, 1st session
128th Maine Legislature, adjourned
Wednesday, November 29, 2017
I’m a little surprised, readers: I got less feedback than I expected on my Thanksgiving declarations in last week’s edition! I am going to assume that this is because you all agreed with me 100%, and not because you were all already on vacation by the time you received Coffee CAHC.
Also on the “list of things that I’m surprised by”…is it really December in two days?! Good grief. Time flies when you’re, uh, fighting to keep the ACA intact. Hey, speaking of which…
Remember all of those times this year that I’ve said we were in the most important stretch of time related to the ACA? Well, we’re in another one right now.
The Senate is barreling toward a vote on their tax plan, including a repeal of the individual mandate. Worryingly, Senator Collins – after leading the way all year in her party on opposing this bad idea every other time it’s come up – now seems to be indicating that, if it’s wrapped up in tax reform and if a few other ACA bills are passed alongside it, she’s fine supporting it.
To be fair, she does seem to be saying that those other two bills (Alexander-Murray, and Collins-Nelson) have to be passed at the same time. Those bills, however, will not come close to undoing, or even containing, the massive damage that would be done by repealing the individual mandate. Allow me to explain.
Alexander-Murray, you may recall, is the bill that restores the cost sharing reduction reimbursements to insurers that the Trump Administration summarily terminated earlier this year. Being charitable, that means that Alexander-Murray “resets” damage that has already been done, and restores that portion of the ACA back to where it was this summer. But even when that was the case, repealing the individual mandate was a terrible, dangerous, and devastating idea that will lead to huge coverage losses (we’ll get back to the “why” of that here in a minute).
Collins-Nelson is the bill that Senator Collins has introduced with Senator Bill Nelson (D-FL) to create a federal reinsurance program. Reinsurance is something we generally like. It’s an efficient and cost-effective way to keep premium growth from year-to-year in check, by giving insurers a way to take care of their highest-cost consumers (basically, the government foots the bill for those consumers). The problem with Collins-Nelson is twofold. First, it isn’t enough money, and second, it doesn’t last long enough. Repealing the individual mandate is expected to increase premiums by 10% annually in 2018 and 2019; estimates are that it would take $10b annually to walk that back, not the $2.25b in Collins-Nelson. And repealing the individual mandate is permanent; Collins-Nelson only lasts two years. What then?
OK, so accepting that those two bills aren’t enough to undo the damage of repealing the individual mandate, then we can ask why repealing it does so much damage. The simple answer is that it is one of the key mechanisms that makes the ACA work. If you put a lot of requirements on insurers that they must cover everybody with a broad basket of benefits (which we should, and need, to do), it’s important to make sure that you figure out a way to encourage healthy people to sign up for coverage – even when they think they might not need it – in order to keep the “risk pool” stable enough for insurers to be able to provide that coverage at a reasonable price. The individual mandate is one way to encourage folks to sign up.
We get that it’s unpopular. We know that some folks may balk at being “forced” into buying coverage they don’t think they need. One thing we’d say is that, this is actually pretty common. You’re required to have car insurance in Maine; you’re required to carry homeowners coverage to get a mortgage. Let’s face it, we as humans are pretty bad at assessing risk, and making sure we are protected so that it is there when we need it is vital in all walks of life.
And the reality is that if you get rid of the individual mandate, there are a few possible alternatives that we like even less to encourage people to sign up. Things like lockout periods: this is where, if you sign up for coverage after a gap, your insurer doesn’t have to cover your pre-existing conditions for a year. No good.
Insurers rely on the individual mandate to make their math work. Some of the reasons that CBO estimates 13m people will lose coverage if you repeal the mandate include skyrocketing premiums pricing people out of coverage, and insurers just leaving the market entirely. This happened in Washington state back in the ‘90s: they passed a ton of important pro-consumer protections without a mandate, and within a few years, every insurer in their state had dropped coverage in the market.
So, that’s why we are, once again, encouraging folks to contact their Senators with these messages. We have maybe a day, day and a half, before the Senate votes on the bill. This is it.
I thought this Bangor Daily News column by Congresswoman Chellie Pingree, about Medicaid expansion, really laid the stakes bare. Absolutely worth a read!
Meanwhile, things are already starting to come out of hibernation a bit with regards to the state legislature. They’ll be back in five short weeks, so expect this section to start filling up soon.
Would you like to know more?
Sarah Kliff at Vox has the clearest summary I’ve read yet of just how massively the Senate bill impacts health care, including enormous cuts to Medicare.
Until next time, friends, I remain,