Since 2006, when then-Gov. Mitt Romney signed health care reform into law, Massachusetts has had one of the most progressive health care systems in the country. Ninety-seven percent of Bay State residents have insurance either through their employer or government programs designed to make the cost of health coverage more affordable for low-income individuals and families. Yet, in the past three days, the security of that infrastructure has been thrown into question.
How the American Health Care Act – the “replace” part of the Republican strategy to dismantle the Affordable Care Act (better known as Obamacare) – will affect the Massachusetts health care market remains a largely open question. And, to be clear, the GOP’s new legislation has a long road ahead of it before it becomes law. Already, four Republican senators have declined to support the bill, making its passage in the Senate far from certain, and deep divisions in the House Republican caucus may create similar obstacles.
But, after years of promising an alternative to the Affordable Care Act, the GOP leadership has finally provided a roadmap for what it hopes to accomplish while it holds control of both houses of Congress and the White House. Certain themes are clear. Through Obamacare's Medicaid expansion and tax subsides, the federal government has picked up the tab for a sizable chunk of the new health care enrollees. The Republicans want to push more of the costs back to the states and individual consumers even if it means fewer people will have access to insurance. The bill is also highly regressive. It would give massive tax breaks to the wealthy – about $600 billion worth – and leave the most financially vulnerable among us left scrambling to afford insurance.
Can Massachusetts simply rewind to 2006 and pick up where Romneycare left off? The short answer is no. The law was amended in 2010 to align with the Affordable Care Act, making Massachusetts more susceptible to the changes proposed by congressional Republicans. Some of that could be fixed legislatively. But, perhaps more important is the fact that so much of our system depends on federal Medicaid reimbursements. Even in Massachusetts, a state that has a history of bipartisan support for universal health care, the drastic funding cuts proposed by the GOP would have a profound affect.
Below, I’ve made a list to try to sort out how Massachusetts would fare under the American Health Care Act. This is by no means exhaustive, and I will continue to update it as new information becomes available. Please leave any thoughts or tips in the comments section or tweet me at @lauracolarusso.
Repealing the employer mandate
The Affordable Care Act requires that all employers with more than 50 full-time employees or more provide health insurance. This was supposed to go into effect in 2014, but the Obama administration delayed the rule and it never took effect. The Republican plan would repeal this section of the law outright. The 2006 Massachusetts health care reform law included an employer mandate, but the state eliminated it in 2013 in anticipation of the ACA’s employer mandate. Governor Charlie Baker tucked a provision into his 2018 budget proposal that would fine businesses $2000 per employee if they don’t offer health care. How the legislature will respond to his proposal, which the governor is currently negotiating with business groups, is an open question.
30 percent lapse in coverage surcharge
The Republicans’ bill would repeal Obamacare's individual mandate, which requires Americans to pay a penalty if they don't purchase insurance. (In 2017, an adult would pay either $695 or 2.5 percent of household income – whichever is higher.) Instead, the GOP would allow insurance companies to charge customers up to 30 percent more on their premiums if they’ve gone without coverage for 63 days or more. That extra charge would apply for a year, and the money would wind up in the insurance companies' pockets, not the federal government's. The health care experts I talked with were split on whether this would affect consumers in Massachusetts. Right now, if you have a lapse in coverage, you can re-enroll without paying extra to the insurance companies. A federal surcharge could supersede that. However, the American Health Care Act doesn’t appear to repeal the state’s waiver authority, which means Massachusetts officials could theoretically request an exception to create a state-specific system to handle the penalties for not enrolling in health care.
Charging older enrollees more
Under Obamacare, insurance companies were not allowed to charge seniors more than three times the amount they charge their younger subscribers. The GOP wants to give insurers the ability to charge older enrollees five times as much. It’s highly unlikely that this provision will survive the Senate. (To pass this bill, Republicans will likely have to work through the budget reconciliation process, but what insurance companies charge consumers doesn’t have a direct impact on the federal coffers.) If it does pass, seniors in Massachusetts can still breathe easily. Current state law restricts insurers from charging older customers more than double what they charge younger consumers.
Freezing Medicaid expansion and implementing a per capita cost structure
There is still some uncertainty surrounding how this would work, but one thing is clear – any state, including Massachusetts, will eventually be on the hook for hundreds of millions of dollars if it wants to continue moving toward universal coverage. (The more likely scenario is that people will lose coverage, but how many is unclear.) Under the Republican plan, those who qualify for Medicaid under the Obamacare expansion can stay in the program, but there are two big caveats. First, you must be enrolled before it freezes on Jan. 1, 2020. Second, the American Health Care Act would require states to determine Medicaid eligibility every six months (as opposed to annually as it’s now done). Within the Medicaid population, incomes tend to fluctuate and can vary widely even on a month-to-month basis. More income verification means more people will be kicked out of the expansion program. Obamacare allowed people to return to Medicaid as needed, but the GOP bill stipulates that once you leave, you can’t return to the federal expansion program. About 300,000 Massachusetts residents get their coverage through the Medicaid expansion. Hypothetically, the state could continue to enroll people, but it wouldn't get the additional federal matching funds.
Changing Medicaid into a block grant program has long been a goal of the Republicans, especially House Speaker Paul Ryan (R-Wisc.). In its current form, Medicaid shares health costs with state governments on a sliding scale. The poorer the state the higher the reimbursement. For regular Medicaid enrollees, Massachusetts splits the cost roughly 50-50. For expansion enrollees, the federal government pays for roughly 85 percent in the Bay State. For both groups, the federal government kicks in whatever funds are needed to cover all the costs. Switching to a per capita cap reimbursement model would mean states would get a lump sum for each enrollee without regard for the total price tag. If this comes to pass, Massachusetts would have some tough choices to make. To make up the difference, the state would either have to raise taxes, restrict eligibility, cut services, or slash payments to providers.
Targeting Planned Parenthood
The Republican plan would halt payments from Medicaid to Planned Parenthood for non-abortion-related services. (Currently, the Hyde Amendment prohibits the use of federal money to pay for abortions.) Planned Parenthood in Massachusetts would lose roughly $2 million in Medicaid reimbursements for preventative care like cancer screenings, contraception, and testing for sexually transmitted diseases. The Baker administration has promised to use state money to offset any decrease in funding.
The cost of birth control could rise
Obamacare classified contraception as preventative care, which allowed women to access birth control without having to pay for it. Today, roughly 55 million women across the United States — including 1.4 million in Massachusetts — have access to contraception at no cost. Massachusetts has a law that requires insurance companies to cover birth control like any other medication or service, but if the Affordable Care Act is repealed, copays could reappear. There is currently a bill pending on Beacon Hill that would require insurance companies to provide any FDA-approved contraceptive with zero cost-sharing.
