Rep. Yarmuth tells health advocates how to fix ACA: restore and maintain subsidies, offer public option to help small, rural counties

Dustin Pugel and Rep. Yarmuth at the meeting (AARP Ky. photo)

By Melissa Patrick
Kentucky Health News

Congress needs to maintain subsidies for buyers of Obama insurance policies, reestablish subsidies for insurance companies that cover more than their share of sick people, and create a public insurance option that would help small, rural counties, U.S. Rep. John Yarmuth said at the Kentucky Voices For Health annual meeting in Frankfort April 24.

"The primary problem that we've had and the most obvious fix would be to re-establish the risk corridors," the law's name for the subsidies to insurance companies, the Louisville Democrat said. "The fundamental problem with the markets now is they [Republicans in Congress] eliminated the risk corridors."

That happened in the 2014 omnibus spending bill, which barred the Obama administration from using federal funds to make up risk-corridor shortfalls. The move led directly to the failure of the Kentucky Health Cooperative, which was expecting $77 million in risk-corridor subsidies but only got $9.7 million.

Yarmuth said a public option is necessary because a third of U.S. counties (and almost half in Kentucky) have only one insurance company offering Obamacare policies, partly because many of those counties have so few people.

"No insurance company is going to find it worth their while to go into a market, negotiate with providers, do the marketing, find prospects for 1,000 or so customers," he said. "So that is why we will need to have a national option for those population groups. It is really essential."

The Patient Protection and Affordable Care Act also authorizes subsidies that help low- to mid-income people afford insurance. Congress hasn't appropriated money for the subsidies, but the Obama administration paid them anyway, and now the Trump administration and Congress are talking about ending them.

"They have set out to sabotage the law in as many ways as possible," he said. "The uncertainty is causing a great deal of problems right now because if the cost-sharing reductions go away, more insurance companies will either abandon the individual market or they will raise premiums." He noted that insurance companies have said an end to the subsidies would mean 20 to 30 percent increases in premiums.

Kentucky has extended its deadline for filing 2018 Obamacare plans to June 7, from May 17, "to allow insurers more time to obtain relevant data, including enrollment and claims data for the beginning of 2017, for use in developing assumptions utilized by actuaries to determine necessary plan pricing," Ronda Sloan, spokeswoman for the state Department of Insurance, said in an e-mail.

The U.S. House of Representatives sued the Obama administration to stop the cost-sharing subsidies, and won, but the administration's appeal is still pending. "The worst case scenario is that the Trump administration drops the appeal if they are allowed to . . . then the lower-court ruling stands [and] the money stops," Yarmuth said.

He said later, "I'm relatively optimistic that those payments will continue because if Republicans act in any way that the money goes away, there will be a causal line between their actions and the insurance companies bailing or raising rates and that line would be like in a matter of days. So there would be no confusing the fact that Republicans acted and people got hurt."

Flexibility and cost concerns

The other big part of Obamacare in Kentucky and most other states is the expansion of Medicaid to those who earn up to 138 percent of the federal poverty line.

Kentucky has applied for changes to its Medicaid program through a waiver that would charge small, income-based premiums and would require "able-bodied" recipients to either work, volunteer or take job training, gradually increasing in hours to a maximum of 20 hours a week after one year, among other things. State officials say they expect the Trump administration to approve the waiver in June, and that it will go into effect Jan. 1.

Gov. Matt Bevin, a Republican, says the state can't afford to pay its part of the expansion unless the program is made more restrictive. Yarmuth, Kentucky's only Democrat in Congress, said he understood the concern about cost, but the real question is affordability "in terms of the overall health and well-being of the citizens of a particular state, and . . . job creation [and] reduction in uncompensated care" at health facilities.

Dustin Pugel, a research and policy associate for the Kentucky Center for Economic Policy, said at the start of the discussion that uncompensated care has dropped 67 percent and the state has added 13,000 jobs in the health sector since Medicaid was expanded in 2014.

Pugel also said people are using more primary care, having more preventive screenings and are getting routine care for their chronic conditions. Dr. Gil Liu, the Kentucky Department of Medicaid Services medical director, said at the meeting that about 1.4 million Kentuckians are on Medicaid.

Looking forward

Yarmuth spoke before conservative and moderate Republicans reached a tentative agreement Wednesday to revive the party's proposed American Health Care Act. He predicted the failure of the bill "or any iteration of it because they don't have the votes. Republicans are finding that there is no alternative to the Affordable Care Act, except single payer and they are not willing to go there."

He said the benefit of the current debate is that it shows how hard it is to come up with an alternative to the ACA, and creating a free-market health care system is "like searching for a unicorn" because it doesn't exist anywhere in the world.

"So, I don't really worry about Congress passing anything that is going to undermine the Affordable Care Act," Yarmuth said. "I do worry about the administration potentially doing more to sabotage the ACT, but again there will be a causal effect and then some repercussions."