Future of healthcare law goes on the docket

A week after Election Day, the most sweeping policy initiative during President Barack Obama’s eight years in office will face a consequential test.

On Tuesday, Nov. 10, the Patient Protection and Affordable Care Act goes before the U.S. Supreme Court for arguments in a federal lawsuit that could threaten its existence. A ruling is not likely until well into 2021.  

The potential outcomes range from a decision leaving the law intact, to one that carves away one or more provisions, to the most sweeping possibility: scrapping the healthcare law entirely.

If the Court goes that far, “that would be a catastrophic shock to our health insurance and healthcare system,” says health policy analyst William Parke-Sutherland.

Parke-Sutherland is coauthor of a new report from Kids Forward, the Wisconsin research and advocacy group for children and families, on the impact of the ACA and the stakes should it be overturned.

That prospect looms even as the COVID-19 pandemic has only made health coverage, and therefore the ACA, “more important than ever” says Parke-Sutherland. The Economic Policy Institute in Washington, D.C., has estimated at least 16 million Americans lost health coverage as a result of being unemployed because of the pandemic, including an estimated 264,000 in Wisconsin between March 15 and May 9 of this year.

“Everyone needs to be able to get testing and treatment for COVID-19 and have access to necessary routine medical care,” Parke-Sutherland says. “The federal government should be working hard to make sure everyone everywhere has coverage, not asking the US Supreme Court to endanger the lives of millions by tearing up the Affordable Care Act.”

Extended impact

The ACA is probably best known for having expanded healthcare access, enabling nearly 20 million more Americans to obtain coverage for medical bills and lowering the rate of uninsured people to less than 10% of the population.

It did that by expanding Medicaid, the federal program that provides health coverage for the poor; by requiring employers of 50 or more people to offer health insurance to their employees, and setting standards for what those plans must cover; and by creating a new marketplace for people who needed or wanted to purchase their own health coverage in every state.

But the ACA also had a broader reach. The law requires insurers to continue covering the adult children ages 18 to 26 of families who have health insurance. It forbids insurers from denying a policy holder coverage because of a preexisting health condition, and requires them to allow policy holders to renew their insurance each year, instead of facing the risk of being cut off from coverage because of a downturn in their health status.

The law prohibits insurers from setting annual as well as lifetime limits on coverage. It requires  coverage for so-called essential health benefits — prescription drugs, mental health care, hospitalization and maternity care. And it extended federal consumer protection regulations and laws to the insurance benefits that people get through their employers — which are often exempt from state insurance regulations.

“Working together, these measures have been a very effective and extremely popular part of the ACA because they allow people to purchase affordable, comprehensive health insurance regardless of their health status,” the Kids Forward report states.

Other parts of the law extend to the broader healthcare system, from how hospitals are financed to Medicare coverage to the federal Children’s Health Insurance Program (CHIP). And there are provisions that affect nutrition programs and mandate that restaurants disclose nutritional information about the foods they serve.

Guaranteed coverage

Of all the aspects of the ACA, probably no provision has gotten more attention than the one that prevents insurers from denying coverage or charging much higher premiums for people based on preexisting conditions — their previous health record.

According to the Kids Forward report, “The protections for coverage of pre-existing conditions are probably the most at risk parts of the ACA if the U.S. Supreme Court rules that some portions of the law are unconstitutional.”

That risk worries Zena Blum of Twin Lakes, in Kenosha County. A former healthcare worker, Blum contracted a norovirus in 2016 and fell ill to the point where she was unable to work. Her husband lost his job in the autumn of that year. In January 2017, they were able to buy heath insurance through the ACA exchange.

“It was a terrible choice for our family to pay the mortgage or buy my medication,” Blum said in a media call in October. “Thanks to the ACA I was able to do both.”

Blum’s illness caused an immune system “overreaction that has not shut down,” she says. Because of it, “I feel every day like I have the flu.” There has been joint damage and she’s been told of possible damage to her internal organs.

Now back at work in a non-healthcare job, she’s been able to work at home during the pandemic. She’s at high risk for COVID-19 because her medication for her condition suppresses her immune system, Blum says: “It could be deadly if I was to catch it.”

But alongside her fear of the pandemic, she worries about losing the protection for preexisting conditions that the ACA provides.

“Right now I know I can get healthcare,” says Blum. “If we lose the case, I don’t know what could happen. That is very scary to me.”

Ben Wilson of La Crosse is a gay man living with the human immunodeficiency virus, or HIV. “I’m going to live a long life as long as I have access to healthcare and medication,” Wilson told reporters during a conference call in October with Sen. Tammy Baldwin (D-Wis.). “But if the ACA is overturned, my HIV becomes a preexisting condition. It’s going to become much harder for me to access medical care and to access health insurance. And I know that’s going to put my future at risk.”

The Kids Forward report calculates that one in five Wisconsin residents under the age of 65 has a preexisting health condition, or 883,000 people — “enough to fill the seats in Lambeau Field ten times over.”

The health insurance marketplace

In Wisconsin, the ACA’s private health insurance marketplace has enabled 195,000 state residents to purchase health coverage in 2020, the Kids Forward report states.

Another 41,000 young adults in Wisconsin have been able to keep insurance coverage through the age of 26 under their parents’ plans, according to Kids Forward. And the 3.2 million state residents covered by their employers’ insurance have benefited from the law’s provision requiring almost all insurers to cover preventive care.

Rural Wisconsin residents, who are more likely to be self-employed or work for small employers that don’t provide health benefits, have been among those who have been helped most by the ACA, according to Kids Forward.

For people enrolling in through the private insurance marketplace, tax credits help those with incomes below  $52,000 for a family of three. Fully 85% of people enrolled in the private marketplace qualify for the tax credits, and because of them pay, on average, $173 a month in  premiums, according to Kids Forward.

“Without the federal subsidies, the average premium for Marketplace plans would be more than three times higher in 2020,” the Kids Forward report states. And because of the ACA’s standards for marketplace plans, they cover behavioral health and maternity care and include free preventive care coverage.

Small business entrepreneurs have been among those who benefited from the healthcare marketplace that the ACA created. Jill Swenson, of Appleton, was farming with her husband in upstate New York when her husband took his life after being diagnosed with a fatal illness. They were uninsured, and “he didn’t want to leave me with medical debt or bankrupt,” Swenson says.

After taking a business development class, Swenson started a literary agency helping authors develop and edit books. Without the ACA marketplace, she says, she would not have been able to buy affordable health insurance and run her own business.

In 2015, Swenson returned to Appleton, where she grew up, continuing to run her business. This year, she teamed up with an out-of-state friend and the two full-time employees of a local flower shop in Appleton to buy the shop. Swenson and her two local business partners all purchased health coverage through the ACA.

“It has been a game-changer,” Swenson says. On the marketplace, “you can comparison shop. You can get exactly what you need, and it takes about 15 minutes.”

Falling short

One element of the law that Wisconsin has not yet taken advantage of is a federally funded expansion of Medicaid (or BadgerCare as it is called here) to cover families whose incomes are up to 138% of the federal poverty level. States can choose whether to accept the federal support, but if they do so, must agree to the expansion.

As governor, Scott Walker refused to accept the federal funding for Medicaid expansion as called for under the ACA. Instead, using state funds only, he extended Medicaid to about 80,000 previously uncovered single childless adults with incomes at or below the poverty line.

At the same time, Walker eliminated coverage for about 70,000 people in the state, mostly parents with dependent children, with incomes between 100% and 200% of the poverty level, instead directing them to the ACA’s private health insurance marketplace.

While the Walker alternative has reduced the number of uninsured Wisconsin residents, it did so “significantly less” than in states that accepted ACA Medicaid expansion, “and the cost to state taxpayers since 2014 has been more than $1 billion higher than the cost of full expansion,” the Kids Forward report states.

Administrative changes to how the federal government carries out the ACA have blunted some of its impact. The administration has shortened the marketplace’s open enrollment period and cut funding for outreach efforts to inform the public about the plan. Those and other actions have undermined its reach.

According to Kids Forward, in Wisconsin, enrollment through the marketplace was 140,000 in 2014, rising to 243,000 by 2017. Since then, however, marketplace enrollment in the state as declined by about 50,000, which the report attributes to the repeated attempts to repeal the ACA during the Trump administration as well as lawsuits to end the act, the outreach cuts, shorter enrollment period “and general confusion” about the program.

Parke-Sutherland says that the largest single group of people to drop out of the health insurance marketplace has been people of lower incomes — the same group that Walker shifted to the marketplace with his alternative to the Medicaid expansion instead of accepting the federal expansion funds.

Higher deductibles, copays and other out-of-pocket costs have likely driven many of those lower-income residents away from the marketplace, even with subsidized premiums. If the state were to accept the federal Medicaid expansion and its coverage of people with incomes up to 138% of  the poverty line, “those people would have a much more affordable insurance option,” Parke-Sutherland says.

Kids Forward has calculated that accepting federal funds to expand Medicaid under the ACA would cover 95,000 more Wisconsin residents and save the state $300 million.

After Gov. Tony Evers was elected, the Republican-controlled state Legislature blocked him from including Medicaid expansion in his 2019-2020 budget.

What happens next?

No one is certain how the Supreme Court will rule on the latest lawsuit. If former Vice President Joe Biden becomes the next president, after promising  to improve the ACA, it leaves open new possibilities for strengthening the healthcare law.

In the absence of federal action, there have been efforts — so far unsuccessful — to introduce state laws in Wisconsin and elsewhere that would fill gaps that might be left by a Court  ruling. But Parke-Sutherland says state laws alone won’t be able to fill all the gaps that could result.

One reason is that only the federal government can regulate large insurance plans that are governed under federal law. “Those plans are exempt from state legislation,” he says.

The larger problem, though, would be how to recreate the law’s protection for people with preexisting health conditions. The federal subsidies that the ACA provides help make that provision possible, he says.

“It doesn’t work unless you figure out a way to subsidize people’s ability to purchase health insurance,” says Parke-Sutherland. “You have to make health insurance affordable to everybody.”