Sen. Bill Cassidy (R-LA) and Sen. Susan Collins (R-ME) have released the first proposal for a replacement for the Affordable Care Act (ACA). Titled the “Patient Freedom Act,” this bill would provide a compromise, where states could choose whether or not they would keep the structure of the ACA.
Here are the key points:
The Patient Freedom Act would provide three options for states:
- Keeping the Affordable Care Act: This would include, for the states that so choose, the healthcare exchanges, the individual mandate, subsidies to offset insurance premium costs and Medicaid expansion.
- New State Alternative: States could put in place a new system that would be funded at 95% of tax-credits and subsidies they would receive under the Affordable Care Act as well as the funding for Medicaid expansion. Rather than keeping the health care exchanges, however, the federal funds will be deposited in a Health Savings Account (HSA). Under this option, there would also be a high deductible, catastrophic care account. Rather than a mandate, all residents without employer-based insurance would be automatically enrolled in the catastrophic plan and would have to opt-out.
- No Federal Regulations, No Federal Assistance: States that dislike both of these options can design and regulate their own insurance market, but they will receive no federal assistance.
The idea behind this bill is that it is a compromise legislation that will let states that wish to keep the Affordable Care Act, and provide other states with a new option that will still provide assistance. Here’s how the bill would affect preventive health.
Insurance coverage guarantees and protections
The Patient Freedom Act maintains “guaranteed issue”, the requirement that insurers cover everyone, regardless of health, and cover any pre-existing conditions. It also maintains the nondiscrimination rules, and allows children to stay on their parents’ insurance until the age of 26. Most importantly, this bill would also require insurance to cover vaccinations and other preventive care and screenings with no cost-sharing or barriers to access. This is key—cost is one of the key concerns that keeps people from obtaining preventive health care or screenings. Outside of these specifically listed requirements, however, the Patient Freedom Act removes other essential health benefit requirements from the federal government and places this rule making authority on the states.
Prevention and Public Health Fund
This bill only covers the insurance aspects of the Affordable Care Act, and does not touch on other programs that were created or authorized by the ACA. One such program is the Prevention and Public Health Fund, which provides grants to organizations providing screenings and culturally appropriate health education to underserved communities. Programs receiving grants from the Prevention and Public Health Fund include tobacco cessation campaigns, educational programs on how to prevent cancers, and organizations providing low-cost cervical or breast cancer screening. The Prevention and Public Health Fund has been eliminated in earlier attempts to repeal the ACA, and it either needs to be exempted from repeal or included in any replacement effort.
Because this bill has not been scored by the Congressional Budget Office (CBO), we do not yet know how many people would be covered by this bill. It is overwhelmingly likely that states that choose to turn away any federal regulation or federal funding would see insurance coverage rates decrease again. The ACA has led to an additional 20 million people gaining insurance coverage, and every state has seen the uninsured rate decrease. The largest concern is what will happen to insurance premiums if there is no cost control measure included, but insurers are still required to cover everyone regardless of pre-existing conditions. Insuring people with outstanding conditions is expensive, and there needs to be a very wide pool of people in order for insurance companies to be able to afford to cover everyone. This is the purpose of the individual mandate that required everyone to buy insurance. Not only to guarantee that everyone had insurance in case of a catastrophic event, but also to guarantee that there were enough people in any given plan to cover the costs of those who are sick and using most of the insurance. If there is no incentive for everyone to sign up for insurance, and no subsidies available either, most people will be priced out of the individual insurance market and will end up with no insurance. Before the ACA, there were states that required insurers to cover pre-existing conditions, eliminated lifetime caps on what insurance would spend, and limited how much more insurers could charge people with pre-existing conditions than their average premium, but did not have a program to increase the number of health people who were insured. These states quickly saw insurance rates skyrocket or in some cases many companies refusing to offer individual plans in the state.
The new option that is created for states has similar uncertainty. It does have an incentive to get everyone into the market, by automatically enrolling anyone who does not otherwise have insurance in a catastrophic coverage policy—a policy with a high deductible that often doesn’t pay for routine care, but that will cover, for instance, hospital bills associated with a car accident. By turning this into an “opt-out” it could increase coverage rates, but if everyone who is automatically enrolled in this program is enrolled in a program that is either managed by the state, or a program managed by a company that has won the state contract, it still doesn’t increase the number of people enrolled in private insurance plans—which can once again lead to a premium increase for all people.
The ACA required states to offer Medicaid to all individuals at or below 138% of the poverty line. After the Supreme Court ruled that this had to be optional, 32 states and the District of Columbia have taken advantage of additional federal funds and increased Medicaid coverage. About half of the people who have gained coverage through the ACA have done so through Medicaid expansion. States that have expanded Medicaid are also required to cover all routine preventive care through the Medicaid program. If the new state option allows the federal funds that would go to Medicaid to instead be put towards Health Savings Account or tax credits, it is unclear what this would do for coverage, particularly for people who make too little to pay taxes. Children, people with disabilities, and elderly with a fixed income are the largest beneficiaries of Medicaid, and they would also not benefit from tax credits, or Health Savings Accounts that would not cover all of their necessary care.
The Cassidy-Collins bill is a piece of compromise legislation, and it still includes many strong protections, such as coverage for preventive services, that we have advocated for. But it is disappointing to see that it does not include continued funding for the Prevention and Public Health Fund. And it seems that in practice the Patient Freedom Act would lessen coverage for those in states that decide to opt-out of the Affordable Care Act. We won’t have a good idea of how this will ultimately affect access to coverage until we see the final CBO score. Flexibility in state programs and Medicaid can theoretically demonstrate new and more effective ways to guarantee everyone has access to medical care and insurance coverage, but without strong guidelines they can accidentally lessen coverage. In any plan moving forward, it’s important to make sure that it provides strong funding and support for preventive health, and maintains insurance coverage for those currently covered.