By Julia Parker.
Healthcare policy experts sounded the alarm about the impact of the Republicans’ proposed healthcare reform on South Carolina and, in particular, Horry County at a forum held on Saturday, June 24.
The Senate could approve their bill this week. It then goes back to the House, where a joint committee to reconcile subtle differences between the House and Senate bills can be formed. Or the House can just pass the Senate bill as submitted. Republican healthcare reform could be law by July 4.
I urge you to read this article for details, and then take action immediately! Trump promised “better, cheaper coverage” during the campaign. He needs to be held to this promise. Lindsey Graham, Tim Scott, and Tom Rice need to hear from all of us.
We must STOP this travesty before it becomes law. Call today. Call tomorrow. Write. Make your voices heard!
Revisions center on Medicaid reform and changes to insurance marketplace.
The stated goal of Republican legislators is to “stabilize the failing health insurance markets.” In fact, the greatest destabilization in the current marketplace is uncertainty over whether the administration will pay insurance companies the subsidies currently promised. As an example, NC insurers announced this week that they would request an 8% increase in premiums if they thought the subsidies would be paid; instead they are requesting a 22% increase. The proposed legislation is further destabilizing, as we will discuss below, because of the Medicaid cuts and the failure to require individual and employer mandates. The bills attempt to require continuous coverage by allowing denial of coverage and coverage of preexisting conditions if someone is uninsured for 60 days. However the cost of maintaining coverage when between jobs may price individuals out of the market.
Bad News for South Carolinians
South Carolina is a relatively poor state, and 1.1 million of our citizens rely on Medicaid dollars for healthcare assistance. Specifically, 630,000 children receive Medicaid assistance; 60% of all SC births are paid for by Medicaid; 75% of nursing home residents are supported by Medicaid. (That’s right folks, when you’re in an “old age home” and your money runs out, Medicaid picks up the tab.) The old system allowed for increases to Medicaid payments for adjustments to costs and services. The new system will impose per capita caps on payments, so when the money runs out, the services stop. That means that handicapped children in our schools will not get the “wrap around care” that enables them to interact in society; women and families will have to bear higher costs of childbirth (and what happens to prenatal care?). Payments for prescription drugs will be limited. Substance abuse programs will be cut.
Under the proposed legislation, SC will lose $2 Billion over 10 years: that’s $200,000,000 per year that we the taxpayers will have to make up. Just to maintain current services will require an increase in State Tax Revenue of 4% by 2026. Estimates of federal “tax cuts” as a result of the AHCA to the lowest 80% of Americans are estimated to be between $150-262 per year. Compare that to a 4% increase in your state income tax plus increases in your total out-of-pocket healthcare costs.
Hardest hit group is older adults
On the private insurance side of the healthcare issue, the broad changes proposed will impact about 500,000 South Carolinians, and rarely for the good. The hardest hit group will be the people in the “age gap” between 50 and 64. Currently, insurance companies can charge them 3 times more than young people in similar health. The new “age tax” would increase that to 5 times the rate. In SC, that will impact about 500,000 people; in House District 7 (Tom Rice’s Congressional constituents), AARP estimates 100,000 people fall into this category! This group could be hit even harder because insurance companies will be allowed to ask for waivers to include pre-existing conditions, which will throw thousands into expensive high-risk pools. The House bill allows the pre-existing condition group to be charged more; the Senate bill does not, but allows for waivers. AARP says, the proposed legislation, “will make healthcare unaffordable and unattainable for a half million South Carolinians.”
Currently, Health and Human Services policy defines Essential Health Benefits (EHBs). These include emergency room visits, ambulance, pregnancy, mental health care, women’s health, lab tests, rehabilitation, and pre-existing conditions. Insurance companies will be permitted to write policies that exclude essential health benefits currently mandated by the ACA in order to reduce costs. In addition, coverage of outpatient procedures and prescription drugs are on the table. Annual and lifetime caps further limit utilization of healthcare. The House bill gives flexibility to allow states to allow health insurance companies to drop coverage if costs exceed $50,000 for major injury or illness, or to charge a 25% increase in premiums the next year.
Tax relief for the wealthy and corporations
The proposals will eliminate a number of ACA taxes on the wealthy, the medical device providers, the insurance companies, and big pharma. To remain “revenue neutral” under the budget reconciliation procedure under which health care reform is being done, the loss in tax revenue is paid for out of Medicaid.
Many young, healthy people and small employers have decried the ACA mandates requiring them to buy or provide health insurance. The individual mandate is upheld by the House bill in the form of a 15% reduction of income tax refunds if insurance isn’t maintained. The Senate draft eliminates this tax. Neither bill requires small employers to provide insurance. However, a failure to carry insurance for 60 days could allow insurers to deny coverage, or to exempt pre-existing conditions. Furthermore, if small employers do not provide insurance, will wages rise to compensate the employee who must foot the entire bill?
Undermining Medicaid hurts poorest and sickest South Carolinians
None of the many stakeholders affected by this legislation are happy with it. Obviously, in an effort to “Repeal and Replace” the ACA with something better, our legislators have come up with a massive wealth transfer that will shift money from those most in need to those who have the most. The insurance companies want a stable market. These proposals destabilize the markets by undermining the support Medicaid provided to the poorest and sickest among us. Hospitals are unhappy because the investments they’ve made to provide improved care will go unutilized as patients cannot afford insurance. Rural hospitals will lose out disproportionately. Nursing homes aren’t happy because when Medicaid runs out, families will have to take loved ones home, leaving empty beds and unutilized capacity. Doctors aren’t happy because their options to utilize the best treatments will be limited by annual caps. Biopharmaceutical and pharmaceutical companies won’t be able to market their newest products. Consumers aren’t happy because they’ll pay more for less. Nowhere in this legislation is the root cost of America’s high healthcare addressed.
SC State Legislators are seemingly unfazed by this legislation. We want them to know we’re watching NOW, to realize that they are going to have to find $200,000,000 per year, starting in 2018 for Medicaid to support our communities. SC Insurance Commissioner Ray Farmer has to understand that South Carolinians will want top notch coverage. He cannot expect to quietly request waivers to protect the profits of insurance companies.
The forum was sponsored by Grand Strand Action Together. Participants included Darrell Eickhoff (AARP), Mallory Porter (Insurance), Sue Berkowitz (Appleseed Legal Justice Center), Nichole Service (Horry County Rape Crisis Center), Keven Clegg (Careteam Plus), and Lindsey Marie (Insurance).