More than a year has passed since the federal government welcomed Healthcare.gov into the world. After some sleepless nights during those first tumultuous months, President Barack Obama’s administration saw its newborn health insurance marketplace slowly gain footing.
Today, Healthcare.gov is finally walking. But on wobbly legs. And some of the other kids don’t want to play with it.
Many Americans wonder how the insurance marketplace — a signature component of Obama’s Affordable Care Act — will turn out. The next year will prove a key test, as consumers continue sorting out what the health reform law means for them, politicians wage war over its many provisions, and the Supreme Court weighs a case that could bring it to its knees. Or not.
Here’s what to expect from year two and beyond for the ACA in Maine.
This summer, the U.S. Supreme Court could potentially deal a crushing blow to the ACA. The justices will decide whether federal subsidies that help consumers to afford their health insurance apply only in states that set up their own insurance marketplaces, or, as is the case now, also in states that use the federal marketplace. More than half of all states, including Maine, use Healthcare.gov, which is geared toward people who buy their own health insurance rather than get coverage through work or the government.
The case hangs on some imprecise wording in the health reform law. If the court decides the subsidies can’t be issued to consumers in Healthcare.gov states, millions of consumers could drop or forgo insurance because it’s too expensive without the financial leg up. In Maine, that’s nearly all of the 36,000 people who have signed up for a plan so far in 2015, as almost 90 percent qualified for financial assistance.
But the court might rule in favor of the subsidies, meaning nothing would change for consumers. The Obama administration is so confident of a favorable decision that U.S. Health and Human Services Secretary Sylvia Burwell has refused to publicly entertain the possibility of the subsidies disappearing.
Many Americans remain unaware of the case, according to a December poll by the Kaiser Family Foundation. Eighty-four percent have heard only a little or nothing at all about it. (A fair number were no doubt too busy hitting the mall or entertaining relatives during the holidays to ponder the legal underpinnings of the health reform law.) And most people get their insurance through work or government programs like Medicaid and Medicare anyway, so the case won’t directly affect their health insurance bill.
Some experts think the public’s ignorance of the case is OK, because the court’s decision won’t be retroactive, so consumers wouldn’t have to pay anything back if the justices rule against the subsidies. Better to focus on enrolling people without muddying the waters with this case, a new development in an already complex law plagued by misinformation, they say.
“The last thing we need is to confuse people more about a program that by its design is confusing and has been made even more confusing by the opposition to it,” said Sharon Treat, who supports the ACA and specialized in insurance and health care issues as a former state representative and senator from Hallowell.
Plus, if the court rules in favor of the subsidies, all this speculation amounts to a bunch of hot air.
However, consumers could lose their subsidies if the court rules against the federal marketplace. In 2014, the subsidies slashed Mainers’ average premiums from $443 a month to $99 a month. The Urban Institute and Robert Wood Johnson Foundation estimate that 55,000 Maine residents would lose subsidies worth $280 million come 2016 if the justices rule against them.
Just two states, Arkansas and Illinois, are taking steps to establish their own insurance marketplaces as a contingency plan, according to Modern Healthcare. The other 32 states using Healthcare.gov, including Maine, remain in wait-and-see mode, said Nicholas Bagley, a University of Michigan law professor. The delays could mean many states will end up watching their constituents lose coverage.
“I would hope that states should be moving en masse right now, to get their ducks in a row, in case the Supreme Court strikes down [the subsidies],” Bagley told California Healthline.
Many doubt if Maine has the political will to create its own marketplace. Gov. Paul LePage and many Republican lawmakers, who now hold a majority in the state Senate, vehemently oppose the ACA.
LePage vetoed expanding Medicaid under the health reform law and in 2012 refused to set up a state-run exchange, defaulting to Healthcare.gov instead.
“Maine will not be complicit in the degradation of our nation’s premier health care system,” LePage wrote in a November 2012 letter to U.S. HHS.
Many Mainers would be forced to drop their insurance without a subsidy, including Treat, who bought a plan through Healthcare.gov.
“There’s no way I could pay for it without the subsidy,” she said.
The Supreme Court will hear arguments in the case in March and won’t release a decision until June, well after open enrollment concludes on Feb. 15.
The Supreme Court justices aren’t the only ones with the power to knock the ACA off its feet. The Republican-led U.S. Congress is gearing up for more votes to repeal the law, despite Obama’s promised veto of any legislation to kill his signature achievement. A repeal might not pass in the Senate, where Democrats maintain the numbers to potentially derail such a move, but even they dislike some of the law’s provisions.
In 2015, we may see Congress debate bills to roll back some of those provisions, such as a tax on medical device makers.
It remains to be seen whether the public warms up to the law. Americans remain deeply divided over the ACA, with 46 percent viewing it unfavorably, according to Kaiser’s December poll. Forty-one percent like the law, while 14 percent had no opinion.
Will LePage soften toward the ACA and Medicaid expansion in 2015? We’ll have to wait and see on that, too. The Maine Medical Association, which represents the state’s doctors, predicts he will, by proposing a modest Medicaid expansion that would mostly help people below the poverty line.
States can propose alternative ways to structure their Medicaid expansions with special permission from the federal government. Five states have already done so, and four more are considering such a move. Maine could be next.
Better health insurance tools
While the pundits and politicians brawl over the ACA, consumers are using the insurance they signed up for under the law, visiting their doctors and buying prescription drugs.
After kicking the tires on their coverage in 2014, some realized their benefits weren’t quite what they thought. The ACA requires insurers to provide plainspoken explanations of each plan’s benefits and costs, but some policyholders were surprised to learn their family doctor wasn’t part of the network or a needed medication wasn’t covered. Some people with health insurance through work ran into the same problems.
Directories listing the doctors included in insurers’ networks were often out of date or inaccurate, and lists detailing covered prescriptions were similarly confounding.
A coalition of health care advocacy groups — including epilepsy patients who rely on their medications to function day to day — wrote to Secretary Burwell in November calling for greater transparency.
“These families have enough that they’re dealing with and to add on this other piece is such a struggle,” Kristine Binette, field service coordinator in Maine for the Epilepsy Foundation New England, said at the time. “You fight enough for everything, you shouldn’t have to fight to get what you need. Especially when the medications are available — that’s the craziest thing.”
Prescription drugs lists, or “formularies,” should be more accessible and easier to use, so consumers can figure out which plan best meets their needs, said Mitchell Stein, a Maine health policy consultant who supports the ACA. New regulations requiring insurers to update their doctor directories once a month would help, he said.
“That information should be easily available to you before you select the plan, but like with the directories, that has not always been the case,” Stein said.
The Obama administration has proposed new changes designed to help consumers better understand their options. The benefit summaries will provide more examples to illustrate consumers’ potential out-of-pocket costs and leave out some information for easier reading.
Stein expects 2015 will bring more focus on ways to help consumers choose a plan, potentially tools built into Healthcare.gov or new standalone products sold by independent companies. Rather than going cross-eyed reviewing a slate of health plans with different benefits, consumers could plug in their specific medical needs and receive a recommendation for a few plans to consider.
Spending less time worrying about health insurance? Not a bad New Year’s resolution.
In 2015, many Americans will get a clearer look at the relationship between Obamacare and the tax man.
When you file your taxes for 2014, you’ll have to tell the government if you had health insurance last year. If you didn’t, you’ll either have to pay a penalty or prove that you qualify for an exemption. (For the specifics, check out our FAQ on the ACA.) The government collects the penalties as additional taxes.
The law encourages people to get health insurance by offering subsidies, or tax credits, to make premiums more affordable. If you received a tax credit, you’ll have to demonstrate that you received the correct amount. If you received too much, your refund could get nicked or you’ll have to write a check to Uncle Sam.
The tax credit is based on the previous year’s income, so if your income changes, the amount of your tax credit will, too. When you file your taxes, the government will check this. If you earned more than you expected to in 2014, you’ll owe money.
All of this could amount to a big headache come tax time, some experts worry. In September, the Obama administration informed more than 300,000 people who signed up for coverage through Healthcare.gov that their income information didn’t jibe with what the IRS had on file. They had until the end of that month to submit pay stubs, tax returns and other information or risk losing their subsidies.
Some consumers could be surprised to find their refund docked for health insurance, instead of paying off credit card bills from Christmas.
Obamacare will affect the pocketbooks of large employers, too. The law requires that large businesses offer health insurance to employees or face a penalty. That provision, called the employer mandate, was supposed to take effect at the beginning of 2014, but the administration put off enforcing it until 2015. Some, including a former White House press secretary, predict the mandate will be dropped altogether.
But as the law stands now, businesses with more than 100 workers will have to offer insurance this year. The relatively few companies of that size in Maine already provide benefits to their workers, so Maine will see a bigger impact in 2016, when smaller businesses — those with 50 or more full-time employees — must offer insurance or pay a fine.
Most of the discussion about the ACA centers on health coverage, which makes sense given the law’s changes to the insurance system. But the law also seeks to improve the quality of health care while lowering costs. One way is by asking states to experiment with new models and report back.
Here, the state is using a $33 million grant awarded under the law in February 2013 to find new ways of paying for and delivering health care that could ultimately lower costs for Medicare, Medicaid and the Children’s Health Insurance Program, while making those programs’ beneficiaries healthier. Health advocates hope lessons learned will benefit the health care system overall.
“It’s one of the secrets of Obamacare,” said Andrew Webber, CEO of the Maine Health Management Coalition, which has partnered with the Maine Department of Health and Human Services to administer the grant.
Maine was awarded the grant, along with five other states, because of its existing progress in transforming health care, he said.
Maine’s Medicaid program, known as MaineCare, accounts for about a third of the total state budget. Like Medicaid programs in other states, it faces critical funding shortages. Reducing its costs while keeping recipients healthy is no small feat.
So far, costly emergency room visits and hospital readmission rates — the percentage of people who end up back in the hospital after they just got out — are down, according to Maine DHHS Commissioner Mary Mayhew.
“We are putting our [State Innovation Model] grant funding to work strengthening primary care and prevention, developing new payment models, and improving data and analysis,” she said in a statement. “This supports the department’s overall goal of driving down health care costs by focusing on prevention and integrated care.”
The effort could eventually result in more than $1 billion in savings over three years, DHHS said when the grant was announced.
It’s an ambitious goal. And just one of the questions the future holds for the ACA as it grows up with a nation watching.