Guest editorial: Alaskans would be hit hardest by Senate bill’s higher health care costs and coverage cuts

This post is a guest editorial by the Center for American Progress’ Emily Gee, a health economist. The Center for American Progress is a progressive public policy institute that has analyzed the state-by-state impacts of the GOP health care bills. 

 

Next month, the Senate is expected vote on a bill that would take billions of dollars from Medicaid, leave tens of millions of Americans uninsured, and repeal patient protections implemented by the Affordable Care Act (ACA).

The bill is harmful to all states, but it would be uniquely damaging for Alaskans.

First, the bill makes changes to the subsidies and premiums in the individual market. The bill raises the ACA’s limits on premiums for older Americans while at the same time reducing the generosity of tax credits for the older enrollees.  Nationwide, individual marketplace enrollees would pay about 74 percent more for premiums in 2020 under the bill.

The bill’s premium spikes would be heightened by Alaska’s already-high health care costs. Middle-class Alaskans with incomes between 350 and 400 percent of federal poverty level would lose their eligibility for financial assistance altogether under the bill, and they would face exorbitant premium increases as a result. An 40-year-old Alaskan with an income at 351 percent of the federal poverty level, which is about $52,860 today, would pay about $8,000 more in premiums after tax credits in 2020 under the Senate bill.  A 60-year-old Alaskan at that income level would pay a whopping $30,000 more annually in premiums.

Worrying as that sounds, premiums alone do not fully capture the increase in costs under the bill. Most people would face increased out-of-pocket costs as well, the Congressional Budget Office projected. In addition to reducing financial assistance for premiums, the bill also does away with the ACA’s cost-sharing reductions, subjecting individual market consumers to higher deductibles, copayments, and coinsurance. The ACA’s special cost-sharing subsidies for American Indians and Alaska Natives, who have little to no cost-sharing today, would also disappear. American Indians and Alaska Natives, like other consumers throughout the country, would face deductibles upwards of $6,000 before most plan benefits kicked in.

Second, small business owners and their workers could also face higher costs under the bill. Buried in the bill is a provision that could pre-empt states’ efforts to ensure consumers insured through small businesses have coverage for basic benefits. A loophole would allow some businesses provide less-skimpy coverage, while those left in the small-group market would face upward-spiraling premiums. The end result is that small businesses owners in all states could face higher costs for covering their employees.

Third, bill makes broad-based cuts to the Medicaid program, totaling $772 billion over the next decade. The bill effectively ends the Medicaid expansion, phasing out federal funds for expansion states starting 2020. In Alaska, however, the bill could end Medicaid expansion overnight.  This is because bill would change the Medicaid expansion population from a mandatory to an optional category of Medicaid eligibility, nullifying the state’s authority provide coverage for expansion enrollees.

Nearly 34,000 people have been covered by the Alaska’s Medicaid expansion since it began, but under the bill, many low-income Alaskans would no longer have affordable options for coverage. The Senate bill renders Medicaid expansion financially unsustainable, if not illegal, for the state. Individual market plans would have cost-sharing levels too high to be of value. In turn, a surge in uninsured Alaskans seeking uncompensated care would place stress on the state’s hospitals and other medical providers.

Despite its name, the Senate’s Better Health Care Act would catastrophic for Alaska. Thousands of Alaskans would lose access to affordable health insurance and, more importantly, access to lifesaving care. There’s nothing better about that.

(To submit an guest editorial for consideration contact editor Matt Buxton at [email protected])