October 2, 2020 Press Releases

Concord Monitor: What would an Affordable Care Act repeal mean in New Hampshire

October 2, 2020
Contact: Ally Livingston, alivingston@jeanneshaheen.org

ICYMI – The Affordable Care Act could lead to a “death spiral” for New Hampshire, reports the Concord Monitor, causing premiums and out-of-pocket costs to skyrocket and eliminating protections for people with pre-existing conditions. In just a few weeks, the Supreme Court will hear oral arguments for the Trump administration and Republican Attorneys General’s lawsuit to eliminate the ACA and make this “death spiral” a reality.

For years, Senator Jeanne Shaheen has led efforts in Congress to lower health care costs and expand access, and is helping lead efforts to stop Republicans’ efforts to repeal the ACA. Meanwhile, her opponent, “Colorado Corky” Messner has campaigned on his support for Trump’s lawsuit, which would raise health care costs for everyone and could gut pre-existing conditions protections for 572,000 Granite Staters. Dismantling the ACA would eliminate federal subsidies that keep premiums low and allow health insurance companies to discriminate against people with pre-existing conditions like asthma, diabetes, and cancer.

“Republicans in the Senate voted yesterday to block Senator Shaheen and Democrats’ efforts to protect the millions of Americans with pre-existing conditions from Trump’s partisan lawsuit that would gut their health care,” said Shaheen campaign spokesman Josh Marcus-Blank. “Even in the middle of a pandemic, Republicans are determined to eliminate the Affordable Care Act and the protections it provides for more than half a million Granite Staters with asthma, cancer, and other pre-existing conditions. It’s disturbing that Colorado Corky has so callously dismissed the challenges facing New Hampshire families, and that he’s pushing to kick them off their health care.”

Concord Monitor: What would an Affordable Care Act repeal mean in New Hampshire

By Ethan Dewitt

It’s no longer a distant hypothetical: the Affordable Care Act, the sweeping health care bill signed by President Barack Obama in 2010, could be struck down within the next year.

A challenge to the law snaking through the federal appeals system the past two years will land at the Supreme Court for oral arguments in November. If successful, that challenge could see part or all of the law eliminated by the court on constitutional grounds in 2021.

So what would the fall of “Obamacare” mean for the Granite State? One possibility, say some health care analysts, is a “death spiral” for the individual market.

It sounds extreme, but the effects support the grim nickname.

Federal support for low-income residents purchasing insurance could evaporate. Premiums could increase for individual plans. Healthy consumers could leave the individual exchange, driven out by high prices. Sick consumers could remain. Insurance carriers, burdened by increasingly untenable financial constraints, could bail soon after.

“Unless there’s an alternative funding instead – some sort of block grant, some sort of federal infusion – then those premiums are going to have to be fully paid for by individuals,” said Tyler Brannan, director of health economics at the New Hampshire Insurance Department.

“Which means we’d see an essentially out of pocket spike for people.”

The subject of health care and health insurance has been at the front of voters’ minds for years now. It dominated considerations for many Americans ahead of the 2018 Congressional mid-term elections, according to polling, and on Tuesday night it led the first presidential debate between Joe Biden and Donald Trump.

Now, the possibility of an abrupt collapse of the biggest overhaul to the health insurance system in decades puts individual states in a precarious spot. Without federal intervention or a replacement option, the system could begin to unravel.

Here’s how.

Starting in 2014, the ACA required each state to set up a health insurance marketplace for individuals who can’t get insurance from their employers.

In New Hampshire, around 40,000 people signed up in the first year. The vast majority of people in the state get insurance through work. Those 40,000 on the individual market – who have now grown to 44,412 in 2020 – were whipsawed by high premiums in initial years that were mitigated by price drops later on.

But many of those buying insurance on the individual market have also had a boost: federal subsidies. The ACA allowed two means of financial assistance for low income people to buy insurance. They could get tax credits off of the cost of the premiums – the advanced premium tax credits. They could also benefit from “cost sharing reductions” – payments made by the government to insurance companies to lower the minimum deductions and the co-pays for qualifying patients on the plans.

Those subsidies have dramatically reduced the cost of a plan for an individual making under 400% of the federal poverty level, which amounts to about $100,000 combined income for a family of four.

But they’re tied to the ACA. If the ACA goes away, the subsidies do too.

The effect would be dramatic for those getting financial assistance. The average premium for someone getting the tax credit on the individual market is $151 a month, according to the University of New Hampshire’s Institute for Health Policy and Practice.

Without the subsidy? The average is $540 a month.

“Most people are getting a premium subsidy,” said Brannen. “They’re not paying the $400. Without those premium subsidies, if the ACA is repealed … who’s going to continue paying that $400 for a premium? It’s only going to be sicker people.”

It’s impossible to predict how many people would stop getting health insurance as a result. People are free to leave; the individual mandate was eliminated in 2017 under the Republican Tax Cuts and Jobs Act. Some might stay on.

Still, 73% of those on the individual market requested those tax credits. If all of the federally subsidized consumers left, only about 12,000 of the 44,000 would still be in the New Hampshire market.

That’s a dire situation for insurance carriers, who typically aim for a broad pool of healthy and sicker individuals to pay premiums and bring down the rates for everyone. If enough people were driven out – especially healthy people who typically help costs stay low – premiums could shoot up, driving more people out. Eventually, insurers could leave the market altogether.

It’s a doomsday scenario that could play out in practically every state and send Washington into a political frenzy over what comes next and how to stop the bleeding. But in the meantime, there are ways for New Hampshire to mitigate the damage, says Brannen.

For one, the state could reopen its high-risk pool. That’s the option that existed before the ACA. The pool allowed people who were sicker or had pre-existing conditions to access subsidized insurance. The insurance was subsidized by assessments levied on other insurance plans; those with healthier consumers would need to pay fees to help support the high-risk consumers.

The state could also continue to pursue a “reinsurance” program. Reinsurance is a mechanism where insurers are encouraged to take on higher risk patients by getting financial supports of their own – “insurance for insurers.” The idea: a way to prop up a market that’s fairer for patients of all risk levels.