What Trumpcare means
A lot, actually. The changes Republicans are pursuing in legislation they are attempting to pass at warp speed — the idea is to have a bill on President Donald Trump’s desk within a month — would profoundly affect the entire health care marketplace, and not just for those who most directly benefited from the ACA. In Maryland, the effects of changes to Medicaid, in particular, could be raise costs for everyone while simultaneously worsening outcomes.
The Republican plan doesn’t exactly do away with the expansion of Medicaid that Maryland and about three dozen other states adopted. Doing so would have immediately cast millions off the insurance rolls. But what the GOP is proposing is actually more drastic in the long run. In Maryland, the state and federal government have traditionally split the costs of Medicaid 50-50. (In poorer states, the federal government picks up as much as 70 percent of the tab.) Under the ACA, the federal government initially covered all the costs to expand the program to people making up to 138 percent of the federal poverty line and after a phase-in period paid 90 percent. The Republican proposal would keep that system through 2020 but would eliminate the extra funding for anyone who enrolled after that point or anyone who left the program and subsequently came back — which can happen frequently as individuals’ income and eligibility change from year to year. Cash-strapped states won’t be able to afford to maintain the expansion, and those gains in coverage will evaporate.
Meanwhile, the plan calls for a fundamental change in the Medicaid bargain. No longer will it be a commitment by the federal government and states to cover a certain set of benefits; rather, it will be a fixed block grant from the federal government to the states based on current costs, adjusted annually to reflect inflation. That, too, portends a gradual erosion of coverage.
That matters to everyone. Less health coverage for the poor means worse control of chronic conditions like diabetes and heart disease and more uncompensated visits to emergency rooms. In Maryland, those costs are passed on to all consumers in the form of higher insurance rates. The state is now in the midst of an experiment in cost containment that effectively encourages hospitals to keep people well in the community and to avoid expensive hospitalizations. So far, it’s working; since 2014, it has produced nearly $500 million in savings for Medicare, reducing per capita health care spending for Medicare beneficiaries at a time when such costs are growing nationally. Meanwhile, the readmission rate for Maryland’s hospitals is down nearly 6 percent compared to the national average, and the rate of hospital-acquired infections and other conditions is down by nearly half compared to what it was before the experiment started. The program was authorized under provisions of the ACA, and even if it is allowed to continue under the Obamacare replacement, its economics will be fatally skewed by the changes to Medicaid.
If Maryland is no longer able to meet its targets for cost savings and loses its Medicare waiver, that means a loss of more than $1 billion a year in federal funding — and higher health insurance rates for everyone. Meanwhile, the investments hospitals have made in efforts to keep people well and out of the ER will cease to be economically viable.
Other provisions of the legislation would prove disastrous as well. Swapping the requirement that individuals maintain health insurance with a provision allowing insurers to penalize those who drop coverage and seek to buy it again with 30 percent higher rates is a recipe for more people doing without insurance when they are young and healthy and then finding themselves unable to afford coverage when they need it later. Those who buy coverage on the individual markets will be older and sicker, driving up costs. Republicans who claimed the individual insurance market was in a death spiral are apparently determined to fulfill their own prophecy.
Ironically, the greatest hope for avoiding such calamitous changes to the health care marketplace may be the opposition from Republicans who believe it doesn’t go far enough. Some are branding it “Obamacare-lite,” and given that the GOP only has two votes to spare in the Senate, unified opposition among Democrats and a few nay-sayers among Republicans could preserve the status quo. That’s not perfect, but it’s a whole lot better than the alternative.