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
Friday, October 20, 2017
Good morning from warm, sunny, beautiful Atlanta!
Some of you may know this, but I love traveling. I do. I love being on the move. I love being in unfamiliar places. The feeling that I get when I’m on my way somewhere I’ve never been before? Can’t get enough of that.
That being said, after two weeks in Colombia and being home for all of 72 hours before taking off again for Atlanta, I would be lying if I said that I wasn’t looking forward to a little bit of downtime when I get back this evening.
One interesting bit of news today: the IRS has announced that in 2018, they will reject tax returns that do not provide health coverage information at the time of filing. This is a reversal of 2017, where they allowed these “silent returns” to go through.
What does that mean? Part of the ACA is the “individual mandate” – the requirement that you either have qualifying health coverage or an exemption, or else pay the “individual shared responsibility payment” (AKA the tax penalty) if you went without. The IRS is the agency responsible for tracking and enforcing that mandate. When you file your taxes, you either show them that you had coverage, or you pay the penalty.
The individual mandate is vital to making the law work. You have to have some way to convince people to sign up for insurance when they are healthy in order to broaden the risk pool and keep costs down for everybody.
There are different ways to “penalize” people for not signing up for coverage, or incentivize them to sign up. One old-school method that was suggested again during the repeal-and-replace drive this year was a “lock-out period”, where people who went without coverage for X amount of time could be denied coverage for Y amount of time when they went to sign back up. For instance, if you go more than 60 days without coverage, you have a 90-day waiting period when you sign back up; or, if you go more than 60 days without coverage, your plan doesn’t have to pay or provide coverage for any pre-existing conditions for your first year. (We had something along these lines in Maine pre-ACA).
Weak enforcement of the individual mandate was a major concern cited by all three insurers in Maine this year when they requested higher premium rate increases next year. That’s because, if the IRS simply looked the other way when it comes to enforcing the mandate and people could go without coverage without fear of penalty, then the assumption is that the healthiest people would risk going without coverage. That means the folks who are left with coverage are sicker. That means the risk pool is more expensive. That means premiums go up. That means healthier people are even less likely to sign up for coverage. That means the folks who are left with coverage are sicker. That means…you get the idea.
So, the IRS enforcing the mandate is crucial to the Marketplace functioning as intended. We’ll call this a soft win. (Anybody else find it slightly depressing that “the government acting like laws are laws” is a “soft win” these days?)
In other news, I’m at the Community Catalyst convening down here in Atlanta, with a couple hundred other dedicated and devoted health care advocates from across the country. This has easily been one of the best conferences I’ve ever been to.
Here are some quick hits on some of the things that everybody down here has been discussing this week:
- Alexander-Murray: there’s a lot of good, promising work in this bipartisan stabilization package. Yesterday it was announced that the bill has enough Republican cosponsors that, assuming all Senate Democrats vote for it, it would get the 60 votes necessary to pass (remember, we are back to 60-vote filibuster-proof margins now that we have moved beyond reconciliation and the 51-vote threshold). The prospects in the House look a bit murkier, though, with Speaker Ryan already out against the bill. My guess is that the House Republicans get something added to the bill (or possibly taken out, although my hunch is that this is less likely) in order for everybody to call it a partial win, and the bill passes. The bigger question is the President, who has been all over the place on this. I am not going to hazard any predictions there!
- CHIP & FQHC funding: no hard news, but the general sentiment among folks in the know down here is that both will pass, probably as part of an end-of-year omnibus bill.
- Tax reform: last night, the Senate passed a budget, which sets up the path for a new set of “reconciliation instructions” under which Congress can ram through a tax reform package. There are lots of potential implications on the health care front in this tax reform package. I don’t have all the details at my fingertips right now, but consider this your heads-up that you’ll be hearing a lot more about this from me over the next few months.
- Prescription drugs: there’s been a lot of interesting movement at the state level over the past year or two on tackling the insane skyrocketing trajectory of prescription drug costs. Maryland, Vermont, California, and Louisiana have all taken very different, very innovative approaches to this huge problem, ranging from requiring more transparency from drug manufacturers about how they set their prices, to protecting consumers from price gouging, to clamping down on insurers playing tricks with how they pass prescription costs on to consumers, to leveraging existing government authority in some compelling ways. Given that prescription drugs are the fastest-growing segment of health care spending and already account for nearly 20% of all health care spending, these are policies to keep an eye on.
Like many of you, we noticed the ads going up lately in opposition to question 2 this fall. As a refresher, question 2 is Medicaid expansion. A yes vote on question 2 is in favor of Maine expanding Medicaid; a no vote is against Maine expanding Medicaid.
In case anybody has forgotten, Maine is the only New England state and one of the small minority of states nationally who has left hundreds of millions of dollars of federal money on the table, and 70,000 Mainers with absolutely no path whatsoever to health coverage, by refusing to expand Medicaid. If Maine expands, the federal government will match our investment in our state’s economy and our people 9-t0-1 (it’s a little higher than that for the next couple of years, and it would have been even better in the first few years if we hadn’t dragged our feet on this, but by 2020 the final federal match rate for this settles at 9-to-1).
This is obviously good for the 70,000 Mainers who, right now, are trapped in the coverage gap. What’s a coverage gap? Oh, that’s what happens when you don’t earn enough money to get help on the Marketplace (only available if you’re over 100% of the federal poverty limit, which is about $12,000 a year for a single person), your job doesn’t offer you coverage, and you don’t otherwise qualify for Medicaid because (in Maine, at least) you aren’t a parent, a kid, over the age of 65, or a person with a disability.
A lot – maybe even most – of these folks are working. They just don’t earn enough, or can’t earn enough, to get over the line where the Marketplace does anything for them.
Another big swath of these folks? Most of you know that I spent two years on our HelpLine before I became policy director. I can tell you from the calls I took there over the years that so many…so, so many…of the folks in the coverage gap are stuck where they are because they left the workforce to take care of a sick or dying relative. An aging parent, a spouse who got an unexpected diagnosis, an adult child who had an accident. And for their troubles, we throw them to the wolves.
“But Steve”, I know some of you are thinking, “can’t they get free care at the hospital?” Sure, but let me tell you why that is not even close to the same thing.
First of all, hospital free care only requires that hospitals take care of certain things. It doesn’t cover prescriptions. It doesn’t cover routine preventive care. It doesn’t cover everything the hospital does.
Second, are you seriously telling me that because somebody is earning less money than you are, that they don’t deserve to have a doctor and instead need to wait until things get so bad that they have to go to the ER?
And third, “free” care ain’t free, friends! Hospitals are still on the hook to pay for the services they provide. They make up those costs in charges to other consumers – you and me. That’s probably why the Maine Hospital Association is in favor of expansion.
OK, so it’s good for the 70,000 people who need health care, and it’s good for hospitals and maybe that lowers my hospital bills…but what’s in it for me? Hey, thanks for asking! The answer is: jobs and economic growth! Like, 3000 new jobs. Like, half a billion dollars in new investment in Maine. That’s pretty good!
If this all sounds familiar to you, there’s a reason. We’ve been chasing this for years. The Legislature has passed bills to do it over, and over, and over again. Governor LePage has vetoed all of them. If memory serves, the Legislature came within one or two votes of overriding once, but couldn’t quite get there. That’s why it’s on the ballot at all.
There is a lot of noise around this, and that’s only going to get worse over the few weeks left between now and election day, which is Tuesday November 7th this year. I just thought I’d give a bit of an explanation of what’s really at stake in this. If you have other questions about expansion, let me know. And while CAHC is (and always has been) strongly in favor of expanding Medicaid, we are not part of the ballot campaign itself: so if you have questions about the actual campaign, check out their website here.
Would you like to know more?
Remember up above when I said some other states are doing interesting things to tackle prescription drug costs? Here’s an article (from May of this year) that explains one of the methods Louisiana has looked at.
Until next time, friends, I remain,