The U.S. Supreme Court will hear arguments on November 10th in a case that could topple the Affordable Care Act (ACA). Despite claims throughout his time in office that the Trump Administration would offer a plan that’s “far better” and less expensive than the ACA, the President has little progress to show. So if the Court rules to dismantle the ACA, what would change for consumers as well as care providers?
These are some, but not all, of the impacts to consumers:
133 million people with pre-existing conditions could lose coverage or have to pay more for health insurance
Before the ACA, insurance companies could deny coverage, or charge exorbitant rates if you had ailments such as high blood pressure, asthma, and a host of other illnesses. The ACA changed that, with legal requirements to make coverage available without charging more if you already had an illness. Changing back to the pre-ACA environment during this pandemic could be especially devastating as people experience both COVID-19 related health problems and job losses
Workers covered under terms of a collective bargaining agreement would maintain their health coverage, though pressure to exclude some conditions and/or make coverage more expensive could impact future coverage negotiated when the ACA is no longer in effect.
21 million people could lose their health insurance
The roughly 11 million people who bought health insurance through the ACA Marketplace could see their plans vanish, and along with it, the federal subsidies that helped many afford their monthly premiums. Another 12 million adults who qualified for the ACA’s expanded Medicaid programs could have their coverage pulled from under them, leading many to delay or simply stop getting care. An additional three million children who obtained coverage when their parents signed up for expanded Medicaid coverage could also be dropped from the rolls, according to the Urban Institute. Documented improvements in health outcomes for Medicaid patients would likely be reversed, and uncompensated care costs could balloon as emergency care replaces primary care for the uninsured.
165 million people could have annual or lifetime caps on care
Medical care is expensive, and before the ACA, insurance companies covering employer sponsored groups or individual market plans often placed caps or limits on how much they would pay toward certain types of care, or annual or lifetime limits on total care dollars spent. The ACA prohibited insurance companies from imposing these limits, thus helping people undergoing expensive treatments such as for cancer or hemophilia to avoid bankruptcy or hefty out of pocket costs.
60 million people on Medicare could experience benefit changes or pay higher premiums
For those age 65 and older, and people with disabilities of all ages, Medicare provides affordable access to medical care. The ACA impacts Medicare in a number of ways. For consumers, it mandates free preventive care, such as check ups for diabetics. The ACA closed the so-called “donut hole” so seniors wouldn’t have to pick up the costs when hitting a coverage gap for prescription drugs. The ACA reduced Medicare costs by lowering payments to health care providers such as hospitals and Medicare Advantage plans. Without these ACA cost constraints, overall costs to Medicare could increase by the hundreds of billions of dollars, according to Tricia Neuman of the Kaiser Family Foundation. As a result, premiums individuals pay toward Medicare could go up. Repealing the ACA would also get rid of a 0.9 percent increase in payroll taxes for high earning individuals, leaving Medicare on a more precarious financial footing.
2 million young adults would lose coverage through their parents plan
Another popular ACA provision compelled employers to allow employees’ children under the age of 26 to remain on their parents’ plan. Without the ACA there would no longer be a requirement to do so.
Medical debt will increase for providers and consumers alike
With 20+ million people getting health insurance due to the ACA, hospitals and other medical providers had started to see decreases in their uncompensated care costs. It turned out to be a win-win. Revenues increased as providers were paid for routine care people had previously gone without, and lost revenues that resulted when people couldn’t afford to pay for advanced disease treatment went down. The Urban Institute estimated that had the ACA been repealed in 2019, uncompensated care costs to providers would have ballooned by over $50 billion for that year alone.
The Urban Institute also found that financial stability improved for the Medicaid expansion population, with better employment prospects, improved credit scores, and a reduction in bankruptcy filings.
Health care providers and state budgets would experience costly, chaotic changes
Reverting to pre-ACA status won’t be easy as so many rules and payment regulations are tied to the ACA. The ACA reformed payment structures for hospitals, physicians, nursing facilities, Medicare Advantage Plans and many others. Some providers likely won’t be able to survive payment delays as new rules are hashed out, weakening the entire system of care.
Chaos would follow as states struggle to deal with the absence of federal funding and whether to cut their Medicaid rolls or dramatically cut back on covered services. It’s unclear if individuals would even continue to have coverage and if providers would be paid while all the changes are hashed out.
Would contracts with Medicaid managed care providers remain valid? Any renegotiation would be time-consuming, requiring both federal and state level approvals.
A Brookings Institution health policy analysis on the repercussions of striking down the ACA’s Medicaid expansion provisions states, “It is difficult to overstate how unprecedented it would be for the Supreme Court to strike down a program [Medicaid expansion] that serves 13 million people and spends $90 billion per year.”
Rural Hospitals, already struggling to keep their doors open, will face even bigger challenges. The ACA offered a lifeline to many rural hospitals by increasing their insured patient population, especially in states that accepted the ACA’s Medicaid expansion provisions. If people lose their health coverage, not only will hospital revenues go down, but uncompensated care costs will again soar. Rural hospitals are also economic engines in the communities they serve, providing jobs in lower income areas where few economic opportunities exist. People in rural areas often have to travel long distances to get to a hospital or clinic. Without the ACA and Medicaid expansion, closures in rural areas could worsen an already stressed system.
Accountable Care Organizations (ACOs) would face uncertainty. ACOs, groups of doctors, hospitals, and other health care providers, function on a model of care prioritizing proactive, coordinated processes to assure the best health outcomes. The ACA established payment incentives for ACOs that became important drivers of quality and efficiency measures. It would take years to replace this system of rules and payments, causing disruption to current ACOs and making it questionable whether new ones would be developed.
Biosimilar drug development could be stymied. Biosimilars are FDA-approved drugs demonstrated to be interchangeable with another biological product. The ACA authorized approval of biosimilars to provide more treatment options, increase access to lifesaving medications, and potentially lower costs. Without the ACA, it’s uncertain whether the 28 biosimilars already approved could continue to be manufactured and made available to patients. The development process for new biosimilars could become mired in litigation, halting progress toward creating alternatives to higher-priced brand name drugs made from living sources.
Drug discounts for Critical Access Hospitals and others safety net providers could be jeopardized. The ACA established lower drug prices for these safety net providers through its 340B program. Re-establishing the program under non-ACA auspices would require not only a new rulemaking process, but also re-navigating the complexities of the prescription drug supply chain. Higher drug prices for these entities may be the end result.
Let’s work to solve the problems
The stakes are high for everyone if the ACA is struck down with nothing to replace it. The health care industry would experience chaos on a scale never seen before, with some institutions not surviving. The hardships health care consumers would experience – even those with private insurance – is simply unconscionable. Government and responsible leaders can solve this problem. We need them now.