By: Paul Gionfriddo, president and CEO, Mental Health America
House leadership has unveiled its Affordable Care Act (ACA) amendment. Cleverly marketed as a “repeal and replace” of Obamacare, it might be more accurate to describe it as something that “retains and revises” ACA. Fundamentally, it keeps health insurance exchanges and “Medicaid for more,” and builds on those concepts.
Whether this approach will be palatable remains to be seen.
Let’s examine how the initial draft provisions might affect people with mental health conditions.
First, the essential health benefits as we know them are eliminated as of December, 2019.
That would include currently required mental health benefits. On page 8, they are expressly eliminated for Medicaid. In addition, (on page 65) the bronze, silver, gold and platinum levels of coverage tied to actuarial benefits are eliminated. What does that mean? In simple terms, health insurance plans won’t have to offer as many benefits as they currently do. And when they do cover something, they can provide as little coverage as the market (or individual consumer) will bear.
This could hurt people with all mental health concerns.
Second, there’s still an individual mandate. But it’s dressed up in different clothing.
If you have a gap in coverage of more than 63 days during the year, then you must to pay a 30 percent surcharge (or premium tax) for your insurance after that. If you are a young adult on your parents’ policy and turn 26, then you must get insurance during the next open enrollment, or else pay the tax when you do.
This could also be a problem for people with mental health concerns. Miss a deadline, or get sent to jail and lose your insurance, and you could be paying much more – for no additional coverage – when you apply for insurance again. This isn’t the same as making a bad decision to opt out of insurance would be. In this case – even if it’s through no fault or intention of your own, you pay the penalty.
Meanwhile, the employer mandate is repealed. That means fewer people will get insurance through work, and more people will buy insurance on the exchanges.
The exchange premiums will increase for older people. ACA limited premiums for older people to three times what young people pay. This proposal says they can be five times higher.
Third, there’s changes to Medicaid.
For one, presumptive (or retroactive) eligibility is repealed. You won’t be able to use Medicaid to cover medical expenses that were incurred up to three months before you applied for Medicaid. That means if you get hospitalized during a first psychotic episode and then become impoverished, you – and your family, the hospital, and clinicians – could be out of luck and out of money.
Also, states are going to be “encouraged” financially to do eligibility redeterminations every six months. That won’t save money, but it will burden working poor people and seasonal employees whose incomes fluctuate throughout the year.
The current Medicaid expansion program lasts until 2019-2020, giving states another opportunity to expand.
After that, Medicaid recipients are divided into five categories: elders, people with disabilities, children, the expansion population, and others. States will get a set amount for each person within each category beginning in 2019.
The base year for determining that amount will be 2016. The federal government will take the amount spent in 2016 and – no matter what happens during the next three years – add the Medical CPI inflation factor to that and call it even.
The increase in Medicaid expenditures generally exceed Medical CPI. For example, the medical CPI rose 4.7% for the year ending in January 2017. But total Medicaid spending last year rose by 5.9%. A 1.2% difference each year equals billions of dollars. Over three years, it could be enough to create a state fiscal calamity.
This calamity could be mitigated if states get more flexibility to cover non-medical services in their Medicaid program, such as housing and employment supports. But in this proposal, states will still need to use onerous federal Medicaid waiver programs if they want to innovate.
Finally, if you are in an expansion population today – and lose that eligibility for a month or more – you may never get back in.
If the costs of chronic care rise quicker than expected, people with chronic conditions will lose the most ground.
To help, the legislation includes $100 billion (over nine years) to stabilize the insurance market and create high risk pools.
The federal government would initially pay 100% of the cost, as outlined on page 59. But the federal share would go down to only 50% by 2026. In other words, this would become – for lack of a better description – a 50 percent unfunded mandate on the states.
Those pools would be very important to people with serious mental illnesses. And $10 billion a year may seem like a lot, but will offset only a fraction of the actual deficit.
There some good news in the proposal for people living below poverty in non-expanding states.
They did not benefit from ACA, but new tax credits would cover them, and it appears that these credits could be paid directly by the government into a Health Savings Account (HSA).
You’ll hear more about these new HSAs. While they will benefit wealthier people more than poorer people, they will permit people to pay all their out-of-pocket expenses and deductibles through an HSA – which means that they won’t have to pay taxes on these dollars.
This is only the beginning of the process.
There will be lots of debate in the coming weeks and months. It is essential that members of the behavioral health advocacy community participate in that debate.
At Mental Health America, we’re ready to work with friends on all sides to advance our policy positions – for mental health services promoting freedom and fortitude, for Medicaid reforms promoting fair funding and flexibility, and for ACA amendments that make meaningful revisions and repairs. And, of course, for further investments B4Stage4.