Post-Election Update: How health insurance may be changing

how health insurance may be changingAs we have reported since the election, changes to our health care system are likely to occur in 2017 and beyond.  While we wait for further action by Congress, we will continue to provide you with information about some of the the possible changes to our health care system and how we get health insurance.

Here are 4 ideas that we have heard from Republican leadership: President-elect Donald Trump, Speaker of the House of Representatives Paul Ryan, and Senate Majority Leader Mitch McConnell:

  1. Provide Medicaid block grants to states
  2. Allow insurance companies to sell policies across state lines
  3. Provide tax credits for purchasing health insurance coverage
  4. Regulate drug prices

Let’s break down what these ideas may actually mean.

  1. Provide Medicaid block grants to states

Currently, Medicaid is funded through a matching system, with the federal government paying for part of the expense of providing Medicaid coverage and states picking up the rest of the cost. There currently isn’t a limit on the amount of funds a state can receive to meet the health care needs of its population.

A block grant is a fixed dollar amount to provide coverage for a state’s health care needs. When the money runs out, that’s it.  This greatly increases the chances that people would go without care.  For example, imagine a year where winter storms are particularly harsh and the flu season is extreme. This would increase the number of people in a particular state that need medical care. What would happen if the state has already spent its Medicaid funds by the end of November? Would no one receive medical care in December?

While the argument in favor of Medicaid block grants is to give states more flexibility to improve their Medicaid programs, in reality, a Medicaid block grant system would likely cause states to have to make tough decisions: a) reduce the number of people eligible for Medicaid; b) reduce the coverage available through Medicaid; or c) both.

Click here to learn more about why block grants only sound like a good idea.

There would also be an impact on hospitals and health care providers. In states that have expanded access to Medicaid, there are fewer uninsured people in those states.  When people are uninsured and need medical care, the burden is often placed on hospitals and health care providers to cover the cost of that “uncompensated care.” If uninsured individuals can’t pay their medical bills, then providers are the ones who suffer. Over the last few decades, many hospitals have had to close, because they can’t afford to cover that uncompensated care. The ACA reduced the amount of uncompensated care by increasing the number of people with health insurance coverage. A Medicaid block grant program would likely increase the number of people without health insurance coverage, increase uncompensated care, and place the burden back on health care providers.

And just to wade a little further into the weeds . . .

If individuals with more expensive pre-existing conditions don’t have access to Medicaid in their state, then they are more likely to enter the individual health insurance market.  Those individuals are most expensive to ensure, and insurers pass on those costs to everyone, which increases the cost of insurance for everyone. This has proven to be the case now. In states that expanded access to their Medicaid programs, the cost of premiums for individual plans in their state health insurance marketplace were, on average, 7% lower than in states that did not expand access to Medicaid.

  1. Allow insurance companies to sell policies across state lines

While there are some federal laws, like the Affordable Care Act (ACA), which provides consumers protections in health care, there are also state laws that provide protections. Those state laws can offer protections such as coverage mandates. For example, a state may require an insurance company to cover oral chemotherapy at the same rate as IV chemotherapy, to reduce the out-of-pocket expenses for patients. Some states even give their insurance commissioner the power to reject excessive monthly premiums charged by insurance companies.

The problem with selling health insurance policies across state lines, is that it provides a loophole that allows insurance companies to not comply with certain state law requirements and offer less comprehensive coverage. Watch this great video which explains why selling insurance across state lines may sound like a good idea, but really poses some practical challenges.

  1. Provide tax credits to help people purchase health insurance coverage

Speaker Ryan’s “A Better Way” proposal suggests offering an “advanceable, refundable tax credit for individuals and families.” Making the purchase of health insurance tax deductible would be very helpful for many people in the United States.  However, for those with lower income levels, it does not sufficiently help those individuals get the money to buy adequate health insurance coverage in the first place. In addition, given the possible repeal of the ACA, whether there will be individual health insurance policies to buy is still unclear.

  1. Regulating drug prices

The cost of prescription drugs has been skyrocketing for decades, partly due to the significant scientific advances that have been made. It was proposed during the election to lower the cost of drugs through regulation. Watch this video to learn more about why regulating drug prices sounds like a good idea, but may not work the way we hope. The devil really is in the details.

We hope that our elected officials will keep these issues in mind as they make their decisions over the next few days, weeks, and months on any changes to health care system.

What You Can Do

We will have to continue to wait and see what happens, but in the meantime, there is something that you can do.

  1. Share your experience and concerns: Call or email your elected officials and share your health insurance concerns. To find your elected officials or learn more about becoming an advocate, visit our Advocacy resources page. You can also find the Facebook and Twitter handles for the current members of Congress here.

 

  1. Tell your story: Share your story with Families USA or the National Coalition of Cancer Survivorship (NCCS), two health care advocacy organizations that are working to help our elected officials understand the dire consequences of repealing the ACA and how certain changes to our health care system can impact us all. But they need the stories of real people. If you feel comfortable doing so, you can share your story at http://familiesusa.org/share-your-storyor at canceradvocacy.org/blog/share-your-aca-story.

Do You Need Health Insurance Now?

We also want to remind you that change is Washington is rarely swift and that we may not see changes for most of 2017.  That means that we have to continue to operate with the system we have for now and ensure that people have health insurance coverage for 2017.  If you do not have health insurance coverage, you can apply for Medicaid at any time or purchase a policy through the State Health Insurance Marketplaces until January 31, 2017.

For more information about how to choose a health insurance policy (including making choices between employer-sponsored options), watch our recorded webinar. If you aren’t sure what your health insurance options are, you can get personalized information on our recently released resource: www.CancerFinances.org.

Stay Tuned

Stay tuned to our Blog and sign up for our newsletter, as we will continue to provide updates as more information becomes available in the coming days, weeks, and months.