With an Affordable Care Act repeal on the horizon, Vermont’s leaders are trying to predict the future amid changing messages coming from Washington.
“People want certainty, and there isn’t any,” state Sen. Jane Kitchel, D-Caledonia, chair of the Senate Committee on Appropriations, told Watchdog. “One day, [Trump] is talking about repealing the ACA, and then he says he wants to provide coverage for everyone. At this point, all we can do is track the situation closely.”
According to the George-Soros-funded Center on Budget and Policy Priorities, Vermont is poised to lose $3 billion in federal funding over the next 10 years if the law is repealed. Moreover, 35,000 Vermonters stand to lose insurance coverage.
Last week, Congress took an initial step toward an ACA repeal. The House and Senate passed a budget measure that sets up a repeal vote sometime in the next few months. Budget bills are immune to filibusters through reconciliation, which makes passage much easier by requiring only a simple majority.
With Republicans in control of Congress and the presidency, there is little Democrats can do to stop a repeal. Committees in the House and Senate are prepared to draft legislation to repeal features of Obamacare, including the individual mandate, which penalizes those who don’t buy insurance.
Since an estimated 30 million people could lose coverage if the law is repealed, Democrat lawmakers are calling for majority Republicans to produce a replacement program.
This week in an interview with the Washington Post, President-elect Donald Trump told reporters, “We’re going to have insurance for everybody.” Trump said details of the plan would be forthcoming after the confirmation of U.S. Rep. Tom Price, R-Georgia, as secretary of the U.S. Department of Health and Human Services. Confirmation hearings began Wednesday.
While Vermont operates a state health care exchange, the state is intricately connected to the ACA through Medicaid.
Sarah Lueck, senior policy analyst at the Center on Budget and Policy Priorities, a progressive think-tank focused on policies that impact low-income Americans, told Watchdog that each state will have to evaluate the greatest areas of need based off of individual demographics. In Vermont, that demographic is likely to be low-middle-class Medicaid users.
Vermont has the most expansive Medicaid coverage of any state. The ACA expanded eligibility for low-income adults, but Vermont also negotiated a global commitment waiver with the federal Centers for Medicaid and Medicare Services. The waiver further expanded Medicaid coverage by allowing the state to determine wider eligibility and finance programs like the Blueprint for Health.
Because Medicaid is so expansive in Vermont, certain brackets of beneficiaries are likely to face cuts.
“You had a large group of people who were pinched under Obamacare premiums, and those people got bumped into Medicaid,” said John McClaughry, vice-president of the Ethan Allen Institute.
Republicans have proposed dramatic changes to Medicaid structure, such as giving states control through block grants. Past Republican budget proposals have also included a per-capita spending cap intended to reduce spending by $1 trillion over 10 years. Critics say the funding reductions will hurt states’ abilities to continue with innovative health programs, such as Vermont’s Medicaid waiver.
With their landmark health care law in jeopardy, Democrats in Vermont and across the country are saying people will die if the ACA is repealed. Experts say a sudden loss of coverage is unlikely.
Lueck told Watchdog that coverage for Vermonters will not suddenly drop if the law is repealed. “2017 plans are still what they are, and any changes won’t take effect until 2018. The increasing uncertainty of the ACA shouldn’t stop anyone from getting coverage this year,” she said.
McClaughry agrees. “It’s a fog in Washington, and so people use scare tactics. … We need to stay in context.”
Michael Fisher, chief health care advocate at Vermont Legal Aid, a nonprofit law firm created by the Legislature protect Vermont consumers, said his office is ready for whatever plan Republicans present. “We will work with every fiber of our beings to make sure we have improved access to care,” he told Watchdog.
While Lueck doesn’t fear mass loss of coverage, she is concerned that repealing the Affordable Care Act will destabilize states’ individual health insurance markets.
Last year, Republicans passed a bill to remove the ACA’s individual mandate penalizing people who do not buy insurance. The bill was vetoed by President Obama but may find new momentum in a Trump administration.
Democrats view the mandate as necessary for the stability of the federal marketplace. While young healthy people are least likely to want or need health insurance, the Obamacare program needs their money to subsidize the population of the sick and elderly. Without that money, costs and premiums skyrocket, as more health care funds are being spent than supplied to the program.
“If all the healthy people leave the program, insurers will either leave or raise their premiums. This causes more people to leave, and creates a death spiral,” Lueck said.
Sean Sheehan, spokesperson for Vermont Health Connect, said it’s too early for state leaders to anticipate the effect of a repeal on the state exchange. “We need to get a little closer to reality.” He did say that the state exchange may need to develop different insurance programs.
State Rep. Janet Ancel, D-Calais, co-chair of the Health Reform Oversight Committee, told Watchdog while the state doesn’t know what would replace the ACA, “it is extremely unlikely we can hold people harmless.” She said how to compensate Vermonters for their insurance loss is the next step for lawmakers.
McClaughry and Lueck both recommend that the federal government subsidize the sickest population separately, taking them out of the larger health care pool where the healthy pay the bill of the sick through their insurance payments.
“One percent of the population bills 20-30 percent of claims,” said McClaughry. “By removing the high risk population, premiums will go down.”
Another option is for Vermont to cut back the coverage requirements placed on insurers. This could help create basic, less expensive packages. Patients would then have the option to buy higher-priced plans with more services. Republicans may also advance legislation to allow insurance to be bought across state lines. The current prohibition has led to single-provider monopolies in a large percentage of the country. About 960 counties, including five complete states, have only one provider now, and 45 insurers recently left the program.
According to free-market economists, allowing purchases across state lines will create competition and drive down prices.
Fisher encourages Vermonters to contact state and federal representatives if they are concerned about their health care. Since no one knows the future, elected officials need to know “what does the average Vermonter feel.”