Another Looming Catastrophe: The Lawsuit Against the Affordable Care Act

JULY 17, 2020 BY NATIONAL COALITION ON HEALTH CARE

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The Administration’s continued pursuit to strike down the Affordable Care Act (ACA) in the courts openly undermines affordable health insurance coverage during the pandemic, threatening our public health response and economic recovery.

The COVID-19 pandemic has caused unprecedented and widespread damage to our health and economy

Since January, more than 3 million people have been infected with COVID-19 and at least 135,900 have died because of COVID-19 in the United States.  As of June 2020, nearly 22 million Americans, or about 13 percent of the labor force, are receiving unemployment benefits. In February, the U.S. unemployment rate hovered around 3.8 percent, but the unemployment rate as of May was 13 percent. Nearly 23 million Americans may be evicted in the coming months as the result of this public health crisis.

Between February and May, a study estimated that 5.4 million workers lost their health insurance as a result of the weakened economy. The Urban Institute compiled various scenarios, with the base scenario estimating that roughly 25 million people will eventually lose employer-sponsored coverage because of the pandemic.  Without health insurance, people may face high medical costs if they become sick, which could exacerbate the current public health emergency and the underlying backlog of unmet health care needs. During the early stages of the pandemic, patients avoided seeing their primary care physicians because they feared catching COVID-19. Now, patients continue to delay medical care because of medical expenses (or both).

As individuals lose their employer’s health insurance, they may become newly eligible for additional options. Of those losing their employer-sponsored plan, the Urban Institute estimated that 47 percent would be eligible for Medicaid, 25 percent will get coverage through the state exchange or other private plans, and a remaining 29 percent will become uninsured. Most of these options are available to those who were already uninsured before the pandemic.

Major avenues for gaining affordable coverage for the uninsured 

Medicaid. Individuals may seek insurance through state Medicaid programs, especially in states that have expanded coverage beyond those categorically needy and to higher income levels. In states that have expanded Medicaid, it is estimated that approximately 23 percent of laid-off workers will be uninsured. However, in states that have not expanded Medicaid, approximately 43 percent of laid-off workers will be uninsured.

Private insurance through the Affordable Care Act (ACA) marketplaces. Individuals may seek private, individual insurance through state exchanges. The majority (>80%) of enrollees in marketplace plans qualify for federal premium tax credit subsidies. The generosity of the premium tax credits varies and depends on an individual’s income. However, some workers may not qualify for subsidies, which could mean high premiums, coverage with high deductibles, or they are priced out of the market entirely.

Consolidated Omnibus Budget Reconciliation Act (COBRA). For those who become unemployed but had employer-sponsored coverage, COBRA gives workers the option to continue coverage under their current plan. However, COBRA can be expensive – although an individual or family can keep their coverage, the employer is no longer subsidizing the monthly premiums.

These avenues for affordable coverage are under threat

Amidst the pandemic, the Administration has openly undermined coverage options for the newly unemployed and those already uninsured by continuing their lawsuit against the ACA.  The Administration asked the Supreme Court to overturn the Patient Protection and Affordable Care Act: the law that provides for Medicaid expansion and ACA marketplace subsidies. Striking down the Affordable Care Act could lead to upwards of 23.3 million more uninsured, in addition to those who have already lost their job-based coverage in the pandemic. The Administration has done little to bolster other safety net programs that could help. People without insurance are susceptible to high prices for COVID-19 treatment, in addition to high prices for everyday services and drugs.

A massive spike in the number of uninsured Americans would deal a serious blow to the country’s economic recovery – which is already under intense pressure and uncertainty as we inch closer to the holiday and flu season.

Although Congress required tests and vaccines to be free for both the insured and uninsured, and HHS has provided a means for providers to be reimbursed for treating the uninsured for COVID-19, high costs can still act as a harmful deterrent when people slip through cracks. There have been cases, for example, of people seeking testing, but not actually receiving the test, and therefore facing high price bills. Congress nor the Administration has taken steps to cover the uninsured for the full scope of COVID treatment, such as those who need long-term care, nor protect patients from the full scope of surprise billing. These policies have a direct effect on our ability to contain the virus.

Immediate policy options for expanding coverage and supporting continuity  

As the number of new cases accelerates in the United States, action could be taken to ensure that the uninsured, or those about to be uninsured, have access to quality health care. These are a minimum, not a comprehensive, set of options:

• Incentivize non-expansion states to expand Medicaid by returning to 100% FMAP for states that expand now.
• Expand eligibility for subsidies for marketplace coverage above 400% of the federal poverty level.
• Provide subsidies for COBRA benefits to ensure those who lose their job have immediate access to some kind of coverage.
• Increase health plan flexibility to delay coverage termination on the exchanges.
• Create a federal Special Enrollment Period (SEP) through healthcare.gov

These measures now will help health care affordability long-term: not only be reducing the uninsured, but preventing premium spikes or provider consolidation.