With hopes for Medicaid expansion fading after Gov. Matt Mead’s budget speech, state legislators may consider Sen. Charles Scott’s ‘Obamacare Relief Bill’ as, among other things, a low-cost plan for Wyoming’s poor. (WyoFile)
Sen. Charles Scott unveils ‘Obamacare Relief’ bill
By Ron Feemster
— December 18, 2013
After hinting for nearly two months that he would author a bill to aid Wyoming residents he says are harmed by the Affordable Care Act, Sen. Charles Scott (R-Casper) unveiled his Obamacare Relief bill yesterday.
“People all over the state are hurting because of Obamacare,” Scott said in a telephone interview. “This bill will not solve all of the problems, but it will provide some relief to people who make too much money for significant subsidies but who can’t afford the health insurance premiums.”
In a document Scott sent to the Legislative Service Office requesting the staff to draft the bill, the senator outlines a modification of the Wyoming Health Insurance Pool (WHIP), which covers people who have been denied health insurance for medical reasons, have exhausted a COBRA plan, or in other ways proved to be uninsurable. Although that coverage has historically been very expensive, Scott says the new coverage would be inexpensive given the relatively low risk of people entering the pool for the first time.
Limited Benefits
The two largest problems Scott addresses in his proposed bill are coverage for people too poor to buy insurance on the exchange — the so-called coverage gap for people under 100 percent of poverty in states that do not expand Medicaid — and coverage for people who might find insurance on healthcare.gov unaffordable. Most of the latter group clusters around 400 percent of poverty, the upper limit for subsidies on the ACA exchange. People just under that limit — about $45,000 for individuals and $94,000 for a family of four — may find the subsidy too low to help them pay the premium. People whose incomes are just over the limit may simply be unable to afford the premiums, Scott says. Under the ACA, Wyoming has the highest insurance premiums of all 50 states.
Scott’s program will not subsidize insurance available through the online marketplace of the Affordable Care Act, but it will provide a cheaper alternative with fewer benefits.
The new program, which he insists in his drafting proposal must be referred to as “Obamacare Relief” in the bill, would provide limited benefit coverage at cheaper prices to people who might otherwise simply pay the penalty and not buy health insurance.
“Everybody needs health insurance in this day and age,” Scott said. Scott emphasizes that the new insurance products would be less expensive than Obamacare policies and offer less coverage.
“It will not be an alternative to the private market policies with more comprehensive benefits,” Scott said. “But it will be better than nothing. This will be a temporary, lower-cost product that people could use until Washington gets the law straightened out.”
Scott does not want to take time to design new benefit packages. “The relief from the Obamacare packages is needed now,” he wrote to the LSO. “A six-to-eight-month delay while a new benefit design is developed and priced defeats the purpose of prompt relief.”
Scott suggests in his document that pricing the new plans can be done without extended actuarial study. He also assumes that people with serious health conditions, among them those who must now get insurance under WHIP, will move to the ACA exchange, since they will get richer benefit packages at lower costs than they paid in WHIP. But it is far from clear that setting premiums for the new policies will be easy, since it must be done quickly and without access to extensive data on the people in the risk pool.
“Sen. Scott’s plan puts the program administrators in a bind,” said Dan Neal, executive director of the Equality State Policy Center. “If the program is supposed to be ready at the end of the budget session, you are taking the chance that a few medical emergencies could come along and you’d have to pour hundreds of thousands of dollars into the program.”
State money
The Obamacare Relief bill would also provide insurance coverage for some but not all of the people who might qualify for Medicaid under the ACA, even if Wyoming does not pass optional Medicaid expansion.
Optional Medicaid expansion, a controversial topic in Wyoming since the Affordable Care Act was signed into law in 2010, uses federal dollars to cover people who earn less than 138 percent of the federal poverty level. Many medical clinics and hospitals are pushing for Medicaid coverage in order to cut down on the $200 million in annual uncompensated care in Wyoming.
Under Medicaid expansion, the federal government would pick up 100 percent of the cost of Medicaid coverage for newly eligible people — mostly single adults and low-income parents of children under 18. In states that expand Medicaid, all such adults who earn less than 138 percent of poverty may enroll for free Medicaid coverage.
The federal government’s 100-percent reimbursement for Medicaid lasts through 2016, when it begins to drop gradually to 90 percent in 2020, where it remains under the ACA.
But because any state’s terms of Medicaid expansion must be approved by the Centers for Medicare & Medicaid Services in Washington, it is rarely possible for states to impose conditions on expansion, although Scott would ask for small co-pays and a work requirement in one version of the Premium Assistance Plan, a bill in front of the Labor, Health and Social Services joint interim committee. Legislators and CMS officials are quick to point out that CMS has never approved a work requirement for Medicaid.
Scott appears to want the Obamacare Relief Bill to use state money so that it can smuggle in a work requirement for people who fall below 100 percent of poverty. The ACA allows those who earn 100 percent of poverty to purchase subsidized coverage on the exchange. Scott believes that people who do not earn 100 percent of poverty might be motivated to work a minimum wage job to earn enough to qualify for health coverage on the exchange.
“We’ve talked to a lot of people who retired early or decided not to work and have a very low income,” Scott said. “They can work harder. A 30-hour week at the minimum wage lets them earn enough to get a subsidy.”
When a family has only minimum wage earners and several children, it sometimes cannot reach 100 percent of the federal poverty level. In other words, when the family has more members but only one or two wage earners, it might fail to earn enough to qualify for subsidized coverage on the exchange.
For this group, Scott’s proposed bill creates the Wyoming Temporary Medical Welfare Program. The state’s general fund would subsidize the WHIP insurance for this group. In a preliminary pricing section that he plans to update after the first draft, Scott says people receiving these subsidies would pay a premium of one half of one percent of their income.
“You’re going to be looking at millions of dollars in state funds to cover people you can cover for free if we just expand Medicaid,” said Neal. “Can you spell ‘expansion’?”
Scott does not see the state subsidizing nearly so many people as the federal government would subsidize. And he believes that selling policies to people on the upper end of the ACA eligibility scale could generate enough income for the program to turn a profit. In addition, he says, the plan is temporary.
Optimistic Skepticism
Elaine Harvey (R-Lovell)
“I’m going to reserve judgment until we see the premium prices and the numbers,” said Elaine Harvey (R-Lovell). “This might be a way to bring down premiums. But I’m not sure yet how Sen. Scott sees this lowering rates.” Harvey notes that Tom Hirsig, the state insurance commissioner, and the WHIP administrators must set the rates. Hirsig said he has seen the bill proposal, but declined to comment on it.
Harvey also pointed out that people who are reluctant to enter personal data into the healthcare.gov site might be more comfortable with WHIP because it has traditionally accepted paper applications. Applicants may fear cybersecurity breaches less on the state system.
“I’m optimistically skeptical,” Harvey said. “At this point I see no reason not to support this. I don’t believe that it would be a bad thing. It would give us one more tool to get people covered.”
The Obamacare Relief bill offers other forms of relief to consumers Scott characterizes as “victims of Obamacare.” For example, people who miss an open enrollment period on the ACA exchange could buy catastrophic health insurance that would remain in effect until the end of the next ACA open enrollment period.
In any case, the bill intends to offer only temporary relief. In some cases, relief may last months, or until a specific administrative problem with the exchanges is fixed. In other cases, problems “may be related to the operation of the law itself and relief may not come for several years until Washington can get the law fixed,” Scott said.
Medicaid Expansion Redux
A mere six weeks ago, Wyoming lawmakers looked as if they were on the way to introducing and perhaps passing a version of Medicaid expansion that would provide health coverage to the state’s poorest 17,000 residents and avoid $100 million in general-fund losses that could accompany Wyoming’s refusal of federal funding for the program.
At the end of the Labor, Health and Social Services meetings in Lander last month, the committee had several versions of a Premium Assistance bill — also known as the Arkansas plan — on the table. This approach to Medicaid expansion would maintain the public funding of Medicaid but privatize its delivery by allowing the state to use federal money to purchase private insurance policies for the poor. An additional bill known as “Medicaid Fit” would modify the benefits package provided under traditional Medicaid. Favored by the Department of Health, it was also under consideration but will not be debated until the committee meets again next month.
But the prospects for Medicaid expansion began to dim with Governor Mead’s budget press conference the day after Thanksgiving, when he argued that he would not expand Medicaid because he didn’t like ACA or its implementation, especially what he sees as the failed rollout of the healthcare.gov website. But since then, the governor has taken aim at the law as a whole.
“Governor Mead believes we should look at the ACA in its entirety, not just focusing on the optional expansion,” wrote Renny MacKay, the governor’s spokesman. “The law is based on a series of actions and promises, many of which have failed to materialize. Specific pieces have been changed through administrative action, other targets have not been met.
“The federal government is not denying this, as it delayed implementing the employer mandate,” the email from the governor’s office said. “Other flaws include the exchange, canceling people’s insurance, missing deadlines, and the inability to get young people to sign up for insurance.”
In his speech to ALEC in Washington, Mead went out of his way to bash the healthcare website. Hardly anyone disputes that the awkward debut of the healthcare reform law has been a black eye for the Obama administration. But equally few would argue that the health insurance exchange itself — the website and phone bank that connects people to private insurance plans — has much to do with enrollment in Medicaid. The exchange sells private insurance policies, but it only refers people to the state if they are too poor to qualify for subsidized insurance. So while an applicant can learn on the exchange that he or she is eligible for Medicaid, Medicaid enrollment is a state responsibility.
“They are really two separate issues,” said Dan Perdue, president of the Wyoming Hospital Association. “What we’re trying to do is provide coverage of those 17,000 people who don’t have coverage in Wyoming. My focus is to get the governor and legislature to accept the Medicaid expansion and cover those people.”
Asked by WyoFile if the governor would prefer the Medicaid Fit option, which he mentioned in his budget press conference, over the Arkansas plan that he did not reference, Mackay wrote: “At this time he is not recommending any expansion.”
Even so, the governor seems willing to consider Medicaid expansion down the road.
“Governor Mead is trying to keep an open mind as he analyzes the state’s options,” MacKay wrote. “He thinks it is appropriate to continually monitor the implementation of the ACA and to see if changes are made at the federal level to improve it and make it a better solution for Wyoming.”
Sen. Charles Scott (R-Casper) unveiled his Obamacare Relief bill yesterday.
Scott said he spoke with the governor about the Obamacare Relief bill on Monday. Although Mead declined a request to take questions about Sen. Scott’s proposed bill, he did acknowledge that he was concerned about finding a way to cover people who are too poor to buy insurance.
“There is no disagreement that we need to find solutions for those 17,000 people,” MacKay wrote. “Governor Mead’s position is based on whether the ACA is the best answer. He believes it is not and would like to see changes made to the ACA or have Congress start over again to find a better solution. The Governor’s budget includes an additional $28.4 million in state funds for mandatory Medicaid expansion, so in this regard the budget does expand some Medicaid services.”
This is a point at which the governor’s views coincide with Scott’s. The system is flawed, but it could be fixed. Even so, it is far from clear where the rest of Wyoming’s healthcare community will come down on the question of covering the poor. For the hospitals and medical clinics of the state, not to mention the Indian Health Service, Medicaid is a known quantity, whether administered as a federal entitlement program or through federal subsidies for ACA insurance policies. Scott’s bill does not seem inclusive enough.
“Medicaid covers people who are too sick to work,” said Neal. “It is a solution for people who need a surgery or some other treatment to become productive again. They need treatment to return to work. Senator Scott’s bill requires that many poor people work in order to get coverage. In many cases, that is a denial of the reality of their lives.”
For many Wyoming legislators, straight Medicaid expansion, as it will be implemented in most states, is a non-starter. “I’m in favor of a plan that allows people access to a real insurance product instead of just putting them on the Medicaid rolls,” said Harvey, who was an original proponent of subsidizing insurance programs with federal Medicaid funds.
At the last meeting of the Labor Health committee, Scott threw his support behind a version of the Premium Assistance Bill that included a 20-hour-a-week work requirement for Medicaid recipients. In addition, Scott wanted small co-pays for every policyholder, no matter how poor.
Harvey, who has supported essentially the same bill without the work and co-pay requirements, believes that CMS would now approve a co-pay for that portion of the newly eligible Medicaid population with incomes between 100 percent and 138 percent of poverty, if not for all recipients.
For Scott, one of the original reasons to develop the Obamacare Relief bill was to bridge the gap between March, when a Medicaid expansion bill could be passed, and the date months later when it could be implemented.
“The two are compatible,” he said. “It could be six months to a year to get the Medicaid waiver prepared. You still have the problem with that set of people in the interval.”
But as Scott has followed the rollout of the Affordable Care Act, he has lot some of his enthusiasm. “I’m in favor of both the relief bill and expansion, theoretically,” he said. “But with the expense of dealing with Health and Human Services and the way Obamacare is visibly coming apart, I’m not sure it will be worth following through with Medicaid expansion.”
— Ron Feemster covers the Wind River Indian Reservation for WyoFile in addition to his duties as a general reporter. Feemster was a Visiting Professor of Journalism at the Indian Institute of Journalism & New Media in Bangalore, India, and previously taught journalism at Northwest College in Powell. He has reported for The New York Times, Associated Press, Newsday, NPR and others. Contact Ron at ron@wyofile.com or find him on Twitter @feemsternews.
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