Trump in the North Country: Dismembering Obamacare & Its Consequences
Part I — Obamacare: Whether you voted for Donald Trump or not, this article is for you. January 31was the last day of the 2016-17 enrollment period for Obamacare. Despite Trump’s executive order on his inauguration day, January 20, declaring his intent to end Obamacare and the Congress’s passage a week earlier of a budget reconciliation bill laying the groundwork for the end Federal funding, Americans continued to purchase health insurance coverage through their State healthcare marketplaces or apply for Medicaid.
Whether Americans like or loathe Obamacare, they want their healthcare.
Republicans in Congress have apparently come to realize, even if Trump hasn’t, that passing legislation putting an immediate end to Obamacare would cause absolute chaos. The insurance companies participating in the health marketplaces will lose 11.5 million subscribers and the $500 million in Federal subsidies the latter brought with them when they purchased insurance. This combination — the large number of subscribers and their subsidies — enabled the insurance companies to offer health marketplace policies that varied in cost and coverage and contained benchmark provisions that are now integral to all private health insurance policies: no disqualifying prior conditions; inclusion of adult children on their parents’ policies until age 26.
Hospitals and healthcare providers nationwide will be big losers. Obamacare reduced the Medicaid reimbursement rate for services provided patients. However, expanded Medicaid coverage has resulted in far fewer uninsured emergency room visits for hospitals to absorb, and more inclusive health care coverage most hospital patients, inpatient and outpatient. With the termination of Obamacare, 10.5 million persons will lose their Medicaid coverage; far fewer patients will be insured; uninsured emergency room visits will once again increase; and Medicaid reimbursement will remain at Obamacare levels without Congressional action. Many hospitals, particularly those in rural areas, will face bankruptcy.
Most importantly, a total of 22 million Americans will lose their healthcare coverage, which includes private insurance policies and Medicaid. Here in New York State, 2.8 million residents are enrolled in the state’s Health Marketplace: 1.9 million have Medicaid; 379,000 persons participate in the state’s extended Medicaid or Essential Plan, which allows New Yorkers to receive Medicaid who have annual incomes as high as 200% of the Federal Poverty Line (FPL), i.e., $48,500 for a family of four; 271,000 have Quality Health Plan (QHP) private insurance policies, 54% of whom receive tax credit subsidies up to $2,000 a year to help pay for the cost of their policies; lastly, 215,000 children are enrolled in CHIP, the Child Health Insurance Program.
Since the Health Marketplace was established in 2013, the number of ACA enrollees in all categories has grown steadily, even during this past enrollment period, and the percentage of uninsured New Yorkers has been reduced from 10% to 5%. If and when the Affordable Care Act is repealed, at least 2.2 million state residents will find themselves without healthcare coverage. Governor Cuomo has estimated a loss in Federal revenue for the State of approximately $3.5 billion, deriving from the loss of insurance subsidies to QHP policy holders; the cessation of funding for the Essential Plan or Medicaid expansion program; the loss of $600 million in ACA subsidies to New York state counties, which enables the counties to pay their share of the State’s Medicaid program and avoid raising property taxes; and the end of subsidies for the State’s Health Marketplace.
The impact in northern New York State, from Albany into the North Country, will be dire. At present, 15% of all ACA enrollees, 410,000 individuals, live in this area, the second largest cohort behind New York City’s 53%. Fourteen percent of that number, 266,000, receive Medicaid, with most recipients enrolling since 2008 when the State and country took economic nosedives. Twenty percent, 54,200 persons, have QHP policies; 12%, 45,480, are enrolled in the Essential Plan; and 21%, 45,150 children, are enrolled in CHIP. Hospitals and health providers, as I indicated above, will also be hard hit. In the North Country, Hudson Headwaters, which serves residents in the Adirondacks’ six easternmost counties, is a Federally-chartered Community Health Center, and its mandated mission is to serve the area’s indigent or poorest individuals. According to its 2016 annual report, its seventeen clinics served 75,000 patients, most of whom, it can be assumed, are Medicaid-eligible. Adirondack Health Care, with its flagship hospital in Saranac Lake, four out-patient clinics, two ancillary service units and two nursing homes in nearby towns, recorded nearly 200,000 patient days and visits during its last fiscal year. Here, too, many if not most of its patients are very likely ACA enrollees. Perhaps the hardest hit of all area providers will be North Country Planned Parenthood, because of the political animus it inspires among political and religious conservatives and the fact that it derives 21% of its annual budget of $5.1 million from Medicaid and an additional 45% of its funding from Federal grants. During its past fiscal year, its seven offices served 8,500 women, nearly three-quarters of whom were over 30 and Medicaid-eligible.
One final consequence for ordinary Americans is that ACA repeal, according to Forbes magazine (12/15/16), will reward each member of the country’s top one-percent with a tax rebate of $33,000, resulting in a projected Medicare tax loss of $350 billion over the ensuing ten years. It turns out that ACA individual QHP subsidies and its Medicaid expansion have been financed by a .9% increase in the Medicare tax for those earning $250,000 and up per year. That tax will be repealed when the ACA ends and the richest among us will pay lower taxes. Conversely, individuals who earn from $10,000 to $70,000 annually could well experience a Medicare tax increase.
In the end, many North Country residents will find themselves without health care and asking themselves and their elected representatives what, if anything, will replace the ACA.
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Part II — Alternatives: Assuming Trump and the Republican Congress repeal the ACA, the media pundits and my neighbors are asking what will replace it. Trump recently acknowledged the difficulties speedily replacing a program that has become interwoven into our health care system. In a recent appearance on the Bill O’Reilly show, he cautioned that a replacement program would not be ready until sometime next year. I’ll add that the Republicans haven’t passed any legislation of note since Bush II. In the recent past, Speaker Paul Ryan and Georgia Congressman and Secretary of Health and Human Services nominee Tom Price have each proposed alternatives which, if they offer a view into the future, appear none too promising.
Ryan, employing his “Better Way Guide”, has proposed ending Medicaid “as we know it” by changing Federal funding mechanisms. Rather than allowing Medicaid to revert to its pre-ACA funding formula – 50% Federal funding matched by 50% from each state – Ryan would award block grants to each state and transfer program administration and benefits distribution from the Federal government, essentially the Department of Health and Human Services (HHS), to the states. According to the Kaiser Foundation, this would result in a projected cut in Medicaid spending, i.e., health coverage for poor Americans, of 23% or $1 trillion dollars over a ten year period. By 2020, 14-20 million fewer Americans would be covered by Medicaid. New York State, during that same ten year period, would suffer a $100 billion cut in Medicaid funding, with 10% fewer New Yorkers receiving Medicaid. With the most richly funded Medicaid program in the country, New York, like all states, will be faced with the choice of using its own public tax monies to maintain current coverage or cut benefits and reduce the number of its residents eligible to receive benefits. Kaiser believes that the latter is the more likely outcome.
If he has his way, Ryan will not stop with Medicaid. He has also proposed privatizing Medicare: ending Medicare as a government regulated single payer program and replacing it with health vouchers to enable those eligible for them to purchase private insurance policies. The Kaiser Foundation has estimated that these vouchers will not enable those who have them to obtain health coverage anywhere comparable to current Medicare health benefits. If Ryan’s proposal had been enacted and Medicare had been privatized when I received my heart transplant two years ago, I would not be writing this article. First off, I never would have been excluded from purchasing a private policy due to a prior condition – I had been diagnosed with heart failure nearly twenty years prior to the transplant. Remember, the ACA put an end to that exclusion and Medicare has never had it. Any private policy I might have obtained would have never come close to covering the full cost of my operation and aftercare: the more than $250,000 in expenses incurred was paid nearly in full by Medicare and by the private insurance coverage provided by my wife’s employer.
At present, there are approximately 104,000 Medicare recipients in the North Country, 17% of the area’s population. The adverse impact on them would be substantial, and the hospitals and health care providers that serve them would be clobbered. Ironically, Ryan’s health care vouchers just might prove to be a boon to private insurance companies, particularly in the wake of all the money and business lost with the end of the ACA.
Two more consequences for Medicare recipients if Medicare is privatized and the ACA ended. First, Ryan’s proposal, if enacted, would also eliminate all behavioral health care for the poor and the elderly. Second, the infamous Medicare Part D “donut hole”, which ACA coverage was scheduled to close in its entirety by 2020, will now remain open when the ACA is eliminated. Since 2016, once Medicare recipients’ out of pocket drug prescription costs exceed $3310, the “donut hole” opens and recipients are responsible for the next $1540 in out of pocket expenses, after which coverage again commences and the donut hole closes. Since the ACA was signed into law in early 2010, 9.4 million Medicare recipients have saved $15 million in prescription drug costs. Cost savings will be eliminated when the ACA is ended. Ryan and the Republicans do not seem disposed to continue them.
To further illustrate, Tim Price, Republican Congressman from Georgia and Trump’s nominee to be HHS Secretary, submitted a bill in 2015 euphem-istically entitled the “Empowering Patients Act.” At the time, Obama was president and there was little chance the bill would be enacted into law. Nonetheless, it prefigured the regulatory changes in healthcare required to totally eliminate the ACA. It afforded individuals the right to opt out of government health benefits programs – Medicare, Medicaid, Veterans Benefits – and receive tax credits of up to $3000 to purchase private insurance, substantially lower than the average tax credit of $4,600 offered under the ACA. It allowed individuals to expand their health savings accounts, also to be used to purchase private insurance. Again, health insurance analysts have estimated that these accounts would be of little benefit to families earning the U.S. annual mean of $56,000. Of even greater concern is that children could no longer remain on their parents’ policies until age 26; further, a cap would be placed on the tax rebates employers receive for providing health insurance to their employees, possibly discouraging many employers from providing a benefits package that includes health insurance.
If you haven’t guessed them already, let me declare my biases before concluding. I’m an advocate of government sponsored single payer health insurance, and I don’t favor a business model that requires giving public tax monies to profit-making health insurance providers. For me, Obamacare has been a problematic substitute but appears to have given millions of Americans and New Yorkers access to health care coverage they couldn’t otherwise afford. I’m confident that Price, assuming he’s approved by the Senate, together with Ryan, will produce at best a hodgepodge of health care provisos that will succeed in depriving millions of Americans of the adequate health care coverage they have finally attained. In short, they will wreak on our health care system the chaos that has become the hallmark of the Trump Administration after just a few short weeks, and they and their policies will have to be resisted and turned back.
You won’t be asked whether you voted for or against Trump when your ACA-subsidized insurance is ended, when your Medicaid is terminated or when you receive a voucher in lieu of a Medicare card. Your only alternative, no matter whom you support or oppose, is to organize. Progressive groups whose goal is to protect extant social welfare programs and individual civil rights are organizing all across the North Country. Our neighbors and my wife and I in Long Lake and Newcomb are holding our first meeting on February 12. Contact information about these groups can be found at www.indivisibleguide.com. You’ll also be able to download a copy of the organizing how-to developed by Congressional staffers. If you’re a Trump supporter and can’t tolerate left-wing rhetoric, organize a group of your own to safeguard your rights and interests.
Bottom line, whatever your political perspective, you have to organize. When circumstances demand, protecting yourself and your family is a non-partisan activity and one that just might allow neighbors to cooperate with one another across the political divide. As my avatar, Joe Hill, would have it, “Don’t mourn, organize!”
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(The data presented in Part I was obtained from the Centers for Medicare and Medicaid Services, the New York State Department of Health; the public annual reports of North Country health acre providers; and various print media, including The New York Times, Washington Post, Forbes Magazine and others.)