The state’s largest representative of hospitals has concerns about the way Congress is handling health care issues as the new year approaches.
The Missouri Hospital Association (MHA) counts among its members every acute care hospital in the state, as well as most of the federal and state hospitals and rehabilitation and psychiatric care facilities.
The non-profit organization fears the repeal of the individual mandate under the Affordable Care Act, which Congress included in its recently passed tax plan, could hinder people from getting access to health care. The provision required people to buy insurance or pay a penalty.
MHA spokesperson Dave Dillon thinks ditching the mandate could lead to a sharp rise in premiums because healthy people will choose to not be insured.
“There’s a very good chance that the only people who will stay in the market will be the ones that absolutely need health insurance, because they’re already sick,” said Dillon. “If only sick people are in the insurance market place, then their premiums will absolutely skyrocket.”
Dillon also points out that an exit from the market place by healthy people could lead to a dramatic rise in uncompensated care delivered by hospitals when those people actually get sick.
The repeal of the mandate was initially contained only in the Senate’s tax overhaul plan. It was included to allow Republicans to meet the chamber’s rules, so they could pass the measure without any Democratic support.
Repealing the mandate frees up roughly $338 billion, enough to keep the deficit caused by the tax cuts from exceeding $1.5 trillion over 10 years. Surpassing that threshold would have bumped up the needed votes for passing the legislation to 60, far above the Republican total of 52 Senators.
Many House Republicans enthusiastically supported the mandate repeal to be part of the final tax plan. Missouri GOP Congresswoman Vicky Hartzler says it does away with an oppressive element of Obamacare.
“I think it is one of the most onerous things that has been done to the American people,” said Hartzler. “To have the government tell every citizen ‘You have to buy a private product. And then we’re going to tell you what is in that. Even if you can’t afford it, you’ve got to do it, or we’re going to fine you’”.
Among the major surprises with the Affordable Care Act lately was the unexpected number of people who signed up for health care during the open enrollment on the federal exchange.
Under President Trump’s administration, the enrollment interval was shortened from three months to six weeks, while its advertising budget was sliced by 90%. In addition, funding for navigators who assist people in navigating the system was curtailed by 40%.
Still. 8.8 million people signed up for health care through the federal exchange, representing 96% of last year’s total. In Missouri, enrollment actually increased by more than 1,000 to reach 245,580. MHA’s Dillon says his organization is pleasantly surprised with the numbers, given the obstacles placed in front of the market place.
“What we’ve gotten throughout the entire year has been a great degree of uncertainty created by the numerous bills that would have completely repealed, or repealed and replaced, the Affordable Care Act,” Dillon said. “And so, the amount of confusion out there makes the signups this year all the more incredible.”
The timeline of events could have a bearing on actual participation in the market place. Dillon thinks the fact that open enrollment ended on December 15th, several days before Congress formally repealed the mandate, could affect the behavior of those who signed up.
“The first step is signing up. The second step is paying your first premium. For those individuals who are going to have out of pocket (payments), we’ll only know at some point later how many of those individuals will actually pay that first premium to engage.”
Another move by the Trump administration originally thought to be detrimental to the Affordable Care Act was its discontinuation of key payments to insurance companies. The cost-sharing reduction subsidies or CSR’s, which Trump dismissed as insurer bailouts, totaled $7 billion this year.
Dillon points out that low income people on the market place are surprisingly making out better under the CSR defunding because the federal government is still subsidizing their premiums.
“If you’re a low-income individual in that market place, the premium support gets higher,” said Dillon. “So, you may be able to purchase a gold plan that offers basically no out of pocket, or very limited out of pocket (expenses), which mitigates the need for cost sharing subsidies.” 88% of Missouri enrollees receive assistance with their premium payments.
Congress avoided an automatic $25 billion cut to Medicare in 2018 in the tax overhaul just passed when the House and Senate voted to waive a rule known as PAYGO. Under PAYGO, spending cuts are triggered when the deficit is increased.
Dillon says the Hospital Association is concerned Congress will still look to cut Medicare spending with the enlarged deficit resulting from the tax bill.
“In fact, the Affordable Care Act did a lot to help begin to bend the cost curve on Medicare and health care in general. So, the real issue is how you get to a more efficient system, not just cutting payments.”
Congress prevented the automatic cut to Medicare during negotiations for a stopgap spending bill to avoid a partial government shutdown last Thursday.
One federal program under Medicaid seems safe in Missouri, at least in the short term. Before leaving Washington for the year, Congress approved short term funding for the Children’s Health Insurance Program (CHIP) through March 31st. The program had been without financing since mid-September.
Dillon notes Missouri has kept a better watch over the program’s finances than some other states. “The state of Missouri has done a very good job of managing the children that are in the Medicaid program, so the finances in Missouri are not in immediate jeopardy.”
CHIP provides financial assistance to parents who make too much money to qualify for Medicaid, but don’t have workplace health care and can’t afford coverage for their kids. Some states had begun to shut the program down before the last-minute move by Congress.
CHIP amounts to $16 billion of the overall $553 billion in Medicaid spending nationally. 88,000 Missouri kids passed through the CHIP program in Missouri during 2016 at a cost roughly $165 million.