Aug 1, 2017

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Enough is enough: Let’s turn the page and fix the ACA

by | Aug 1, 2017

For months, Congressional Republican leaders and many of their rank-and-file members engaged in a purely partisan effort that, if it were successful, would have had catastrophic effects on Coloradans, their communities and the state economy. Hundreds of thousands of Coloradans would have lost health care coverage and those lucky enough to retain their coverage would have seen their premiums sky-rocket. Such proposed policies represented the opposite of what was needed to make health care coverage more accessible, transparent, efficient and affordable.

We have already seen the negative consequences of Congress’ reckless escapades as Colorado’s insurers announced they intend to charge customers 27 percent more on average in premiums next year alone. Premiums rose in part because of the market uncertainty associated with these political games. No one in the industry knew what Congress would do, and thus they couldn’t set rates to protect themselves against potential losses. Additionally, the uncertain fate of Cost Sharing Reduction (CSR) payments, which could result in a $7 billion loss to insurers if the Administration does not honor its commitments, is also proving to be a destabilizing factor.

It doesn’t have to be like this, and going forward we urge Congressional leaders to reject any urge they might have to engage in political theater and brinksmanship because the consequence of their actions have real life implications for Coloradans.

Instead, Congress should listen to the likes of Senators Lisa Murkowski, Susan Collins, John McCain and others and work together in a bipartisan fashion to address our nation’s most pressing health care problems.

Here are five ways Congress can accomplish that goal:

  • Fund the Cost Sharing Reductions — CSRs reduce the cost-sharing obligations (such as deductibles, copayments, etc.) for moderate-income individuals who purchase silver-level health insurance plans through the ACA’s health insurance marketplaces. Under the ACA, insurance companies are required to provide CSRs to individuals who qualify. The federal government is required to reimburse those companies for the CSRs they provide. However, in 2016, a federal district court ruled that the administration was improperly funding the CSR program. The resulting uncertainty around whether insurance companies will receive their CSR reimbursements contributes to instability in the market and increases premiums and other insurance costs. Congress can help stabilize insurance markets by properly funding the CSR program.

 

  • Strengthen the individual mandate. The individual mandate is the ACA provision that requires people to carry health insurance for at least nine months out of the year, or pay a fine when they file their taxes. An effective individual mandate is needed to ensure that there are enough young, healthy people participating in insurance pools whose low costs counterbalance the higher costs associated with sicker enrollees. Without an effective individual mandate, risk pools may end up with a high a proportion of costly enrollees, leading insurance companies to raise premiums. Meanwhile, those high costs push healthy enrollees out of the market. This cycle is commonly referred to as the “insurance death spiral.” The Trump administration has already contributed to instability in the insurance market by suggesting that it won’t enforce the individual mandate. By ensuring that the administration enforces the mandate Congress can boost participation in the insurance market, stabilize risk pools and lower premium costs.

 

  • Fix the “family glitch.” The ACA prohibits individuals from receiving federal subsidies for private health insurance plans if their employers offer insurance coverage that is “affordable,” as defined in federal regulations. If employer coverage meets the affordability standard, the employed individual’s family members are not eligible for federal subsidies if the employer covers the individual’s family, even if the family coverage is not affordable. This so-called “family glitch” leaves many people without affordable health insurance options. Congress can improve the affordability of coverage and increase participation in insurance markets if it fixes the family glitch.

 

  • Adequately fund reinsurance. Under the ACA, insurance companies can’t exclude people from coverage based on preexisting conditions. While this was a strong step forward for our health care system as a whole, it means that many people with costly medical conditions entered the individual market, began receiving coverage and drove up costs to insurance companies as a whole. These higher costs had the potential to raise insurance premiums for everyone in the individual market and deter healthier individuals from buying health insurance, creating yet another death spiral. To help defray the additional costs insurance companies would incur as a result of covering higher-risk enrollees, the ACA funded a temporary reinsurance program from 2014-2016. Reinsurance programs can keep premiums on the individual market stabilized for everyone and ought to be reauthorized by Congress. States could also take that on. For example, the Republican-controlled state of Alaska set up a $64 million reinsurance fund to help insurers cover the highest-cost cases. Colorado is considering state-level solutions, like a reinsurance fund, that might help with covering high-cost patients.

 

  • Get a handle on health care costs. Although the ACA has been largely successful in accomplishing its principal task – enrolling tens of millions of Americans in health insurance – we will not get to the core of what ails our health care system until we address underlying costs. Every other developed country in the world delivers health care for a fraction of what it costs in the U.S. They use a wide range of tools and strategies that line up with each country’s values, political realities, and medical traditions. Some set rates for health care encounters. Some negotiate prices for drugs and medical devices at the national level. Some have government administer payments. Some mandate transparency. Some governments own hospitals and pay the doctors who work in them. Others limit new hospital construction and the purchase of new machines. It’s time for Congress to leave behind the notion that cutting government support to families will reduce health care costs and get to work on true solutions to the cost conundrum.

Congressional leaders have asked for ideas on how to address the issues ailing our health care system. Well, here they are. It’s time to turn the page, return to regular order and work together to provide some relief to those who don’t have the luxury of engaging in political theater and partisan nonsense.

Call Colorado’s congressional delegation today and tell them it’s time to move on and work together.

 

-Kristopher Grant and Allison Neswood

Recent articles

HEALTH:
HEALTH FIRST COLORADO (MEDICAID)

To maintain health and well-being, people of all ages need access to quality health care that improves outcomes and reduces costs for the community. Health First Colorado, the state's Medicaid program, is public health insurance for low-income Coloradans who qualify. The program is funded jointly by a federal-state partnership and is administered by the Colorado Department of Health Care Policy & Financing.

Benefits of the program include behavioral health, dental services, emergency care, family planning services, hospitalization, laboratory services, maternity care, newborn care, outpatient care, prescription drugs, preventive and wellness services, primary care and rehabilitative services.

In tandem with the Affordable Care Act, Colorado expanded Medicaid eligibility in 2013 - providing hundreds of thousands of adults with incomes less than 133% FPL with health insurance for the first time increasing the health and economic well-being of these Coloradans. Most of the money for newly eligible Medicaid clients has been covered by the federal government, which will gradually decrease its contribution to 90% by 2020.

Other populations eligible for Medicaid include children, who qualify with income up to 142% FPL, pregnant women with household income under 195% FPL, and adults with dependent children with household income under 68% FPL.

Some analyses indicate that Colorado's investment in Medicaid will pay off in the long run by reducing spending on programs for the uninsured.

FOOD SECURITY:
SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM (SNAP)

Hunger, though often invisible, affects everyone. It impacts people's physical, mental and emotional health and can be a culprit of obesity, depression, acute and chronic illnesses and other preventable medical conditions. Hunger also hinders education and productivity, not only stunting a child's overall well-being and academic achievement, but consuming an adult's ability to be a focused, industrious member of society. Even those who have never worried about having enough food experience the ripple effects of hunger, which seeps into our communities and erodes our state's economy.

Community resources like the Supplemental Nutrition Assistance Program (SNAP), formerly known as Food Stamps, exist to ensure that families and individuals can purchase groceries, with the average benefit being about $1.40 per meal, per person.

Funding for SNAP comes from the USDA, but the administrative costs are split between local, state, and federal governments. Yet, the lack of investment in a strong, effective SNAP program impedes Colorado's progress in becoming the healthiest state in the nation and providing a better, brighter future for all. Indeed, Colorado ranks 44th in the nation for access to SNAP and lost out on more than $261 million in grocery sales due to a large access gap in SNAP enrollment.

See the Food Assistance (SNAP) Benefit Calculator to get an estimate of your eligibility for food benefits.

FOOD SECURITY:
SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND CHILDREN (WIC)

Every child deserves the nutritional resources needed to get a healthy start on life both inside and outside the mother's womb. In particular, good nutrition and health care is critical for establishing a strong foundation that could affect a child's future physical and mental health, academic achievement and economic productivity. Likewise, the inability to access good nutrition and health care endangers the very integrity of that foundation.

The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) provides federal grants to states for supplemental foods, health care referrals, and nutrition information for low-income pregnant, breastfeeding and non-breastfeeding postpartum women and to infants and children up to age five who are found to be at nutritional risk.

Research has shown that WIC has played an important role in improving birth outcomes and containing health care costs, resulting in longer pregnancies, fewer infant deaths, a greater likelihood of receiving prenatal care, improved infant-feeding practices, and immunization rates

Financial Security:
Colorado Works

In building a foundation for self-sufficiency, some Colorado families need some extra tools to ensure they can weather challenging financial circumstances and obtain basic resources to help them and their communities reach their potential.

Colorado Works is Colorado's Temporary Assistance for Needy Families (TANF) program and provides public assistance to families in need. The Colorado Works program is designed to assist participants in becoming self-sufficient by strengthening the economic and social stability of families. The program provides monthly cash assistance and support services to eligible Colorado families.

The program is primarily funded by a federal block grant to the state. Counties also contribute about 20% of the cost.

EARLY LEARNING:
COLORADO CHILD CARE ASSISTANCE PROGRAM (CCCAP)

Child care is a must for working families. Along with ensuring that parents can work or obtain job skills training to improve their families' economic security, studies show that quality child care improves children's academic performance, career development and health outcomes.

Yet despite these proven benefits, low-income families often struggle with the cost of child care. Colorado ranks among the top 10 most expensive states in the country for center-based child care. For families with an infant, full-time enrollment at a child care center cost an average of $15,140 a year-or about three-quarters of the total income of a family of three living at the Federal Poverty Level (FPL).

The Colorado Child Care Assistance Program (CCCAP) provides child care assistance to parents who are working, searching for employment or participating in training, and parents who are enrolled in the Colorado Works Program and need child care services to support their efforts toward self-sufficiency. Most of the money for CCCAP comes from the federal Child Care and Development Fund. Each county can set their own income eligibility limit as long as it is at or above 165% of the federal poverty level and does not exceed 85% of area median income.

Unfortunately, while the need is growing, only an estimated one-quarter of all eligible children in the state are served by CCCAP. Low reimbursement rates have also resulted in fewer providers willing to accept CCCAP subsidies.