Health policy analysts say an Affordable Care Act replacement plan introduced by Maine Sen. Susan Collins this week could contain the seeds for a deal that would bridge the gap between the extensive benefits required under the ACA and skimpier proposals previously offered by congressional Republicans.
It’s unclear, however, whether the plan could attract Democratic support and navigate a narrow path to bipartisan support. Republicans are pushing to repeal former President Obama’s signature domestic achievement, and President Trump signed an executive order last week that could weaken it.
AT A GLANCE: THE PATIENT FREEDOM ACT
The bill, by Republican Sens. Susan Collins of Maine and Bill Cassidy of Louisiana, is a compromise proposal to replace the Affordable Care Act. Some highlights:
• If states like the ACA, they can keep it
The bill permits states to keep the ACA operating in its entirety – including premium subsidies, the individual mandate and Medicaid expansion.
• Health Savings Accounts
States also could choose to scrap the ACA and set up Health Savings Accounts for individuals who can’t get insurance through an employer or Medicare. People would be automatically enrolled in standard high-deductible plans and the state would deposit a certain amount – probably several thousand dollars, into the Health Savings Accounts that would be used to pay for premiums, deductibles and co-pays. Any money that is left at the end of the year would roll over and accumulate year-over year.
• Protections
Even for states that chose Health Savings Accounts, many elements of the ACA would still be in place. For instance, preventive screenings would be required to be in the plans for little to no cost, including colonoscopies, mammograms, tests for diabetes and STDs, vaccines, annual physicals and other preventive measures. Mental health and substance abuse services must be covered.
• Your own money
People with Health Savings Accounts could supplement the accounts with their own money, depositing up to $5,000 per year for an individual, or $10,000 for a married couple.
TEXT OF THE PATIENT FREEDOM ACT
ONE-PAGE SUMMARY OF PATIENT FREEDOM ACT
In such a politically charged atmosphere, Senate Minority Leader Chuck Schumer, D-N.Y., already has lambasted Collins’ bill.
Collins, in remarks she made on the Senate floor Monday afternoon, called the bill an important first step that could be modified and improved. Collins emphasized the potential for compromise when she launched the bill with Republican Sen. Bill Cassidy of Louisiana.
“We have made a genuine effort to put together a bill that would be a reasonable replacement to Obamacare and would help to bring people together,” Collins said Monday.
The Patient Freedom Act of 2017 would give states the option of maintaining the ACA as is, including subsidized premiums, Medicaid expansion and the individual mandate with penalties for those who don’t participate.
Or states could choose to give previously uninsured people generous taxpayer-funded Health Savings Accounts.
Health Savings Accounts have traditionally been considered tax shelters for upper middle class or wealthy families, giving those who already live comfortably a way to pay for uncovered health costs by tapping into the tax-free accounts.
Laura Adams, a senior insurance analyst with Austin, Texas-based InsuranceQuote, a company that helps consumers buy insurance, called the savings account proposal “innovative.”
“It’s a bridge to a new way of dealing with and looking at health care without completely scrapping what we already have,” Adams said. “The idea of leveraging Health Savings Accounts for better coverage is a good one. They already exist, so they’re using the existing infrastructure.”
FEDERAL MONEY TO FUND CARE
Under Collins’ bill, the government would deposit taxpayer money into accounts of previously uninsured individuals – an undisclosed amount but expected to be several thousand dollars a year – and that money could be used to pay for a standard high-deductible plan or to help purchase more comprehensive coverage. Everyone who was previously uninsured and can’t get coverage from an employer or Medicare would automatically be enrolled in the standard health plan, with an HSA set up for them that would contain taxpayer-funded money they could use to pay for health care.
Individuals would receive the taxpayer-funded deposits if they earned up to $90,000, or $150,000 for a married couple. After the income thresholds are reached, the assistance would be gradually reduced.
Though the standard plan and other plans purchased through the Patient Freedom Act would not be required to cover everything that’s currently mandated by the Affordable Care Act, many of the ACA’s provisions would remain.
For instance, the Patient Freedom Act mandates that most plans – even those purchased with HSA money – must carry the same preventive services as the ACA at little or no cost to patients.
So the plans would still offer free colonoscopies, mammograms, immunizations, annual checkups, birth control, tests for a variety of diseases such as diabetes, hepatitis A and B, and sexually transmitted diseases, tobacco cessation programs and other mandated, preventive services.
Also, the HSA-purchased plans, like the Affordable Care Act, must include mental health and substance use disorder services. The plans also would have a prescription benefit.
Scott Ogden, a spokesman for Maine Sen. Angus King, an independent who caucuses with Democrats, said in a statement that “King commends Sen. Collins for advancing ideas, and he intends to review her proposal in the coming weeks, discuss it with her and their fellow colleagues, and speak with people in Maine – especially health care experts – to understand how it will affect the state.”
PLAN USES SAME FUNDING AS ACA
The bill has not yet gone to the Congressional Budget Office for analysis, including a financial review.
About 20 million Americans, including 80,000 Mainers, receive health care coverage through the ACA, mostly self-employed or part-time workers who can’t obtain employer-based benefits.
The Patient Freedom Act uses the same funding as the ACA, and states that chose the Health Savings Account option would direct the money into funding the accounts.
Adams said that for those with lower incomes, having the government deposit thousands of dollars into a health “bank account” – money that can be used only for health care costs – would encourage individuals to seek care.
“If that money is already there available to them, they are more likely to go to the doctor more often,” Adams said.
While they would still pay a monthly premium, the premium could be paid using Health Savings Account funds. Also, crucially, Adams said, any money that is left rolls over and is accumulated year-over-year.
So if you have a healthy year and have $2,000 in taxpayer-funded money remaining in your account, that money carries over into the next year, when the government still would deposit the same annual amount into your HSA.
That allows patients to build up a nest egg for health care costs, and after a few years of saving enough money, could be built up to cover all costs up to the deductible. It’s unknown how much premiums would be or what the deductibles would be.
DRAWBACKS FOR CONSUMERS
Also, people with an HSA could supplement the accounts with their own money – up to $5,000 for an individual and $10,000 for a married couple.
Emily Brostek, executive director of Consumers for Affordable Health Care, an Augusta-based nonprofit, said that although there are many interesting components to Collins’ bill, she sees some pitfalls.
Brostek said that although HSAs are great for those who are healthy and have disposable income, lower-income people with chronic conditions or who have expensive specialty medications would be worse off than under the ACA.
“You could eat through your account pretty quickly, and then how would you pay your premiums or for your care before you reach your deductible?” Brostek said.
She said another problem is that in states that chose Health Savings Accounts, there would be no penalty for larger employers that dumped insurance benefits for employees. The ACA penalizes larger employers that don’t offer health benefits to full-time employees.
Without a disincentive and with free government money available to people who get HSAs, employers may decide to save money by discontinuing health benefits, Brostek said.
“This could open up the door for employers to stop offering insurance. It could really disrupt employer-based coverage,” she said.
But Adams believes employers would retain health benefits for workers, in part to remain competitive with other companies competing for workers.
Brostek said another problem is if the federal government reduces funding for the program in future years – the government money deposited into the HSAs could stagnate or be reduced over time, depending on how many people are in the system and how much the government funds the program.
What could start out as a decent benefit could worsen over time, especially for an aging state like Maine, which is expected to have higher health care costs in future years compared with states that have younger populations.
Brostek also doesn’t like how states could choose to spurn all federal money and leave large swaths of the population uninsured. The Patient Freedom Act does not require states to do any of the plans, but states that chose not to participate would be forgoing millions or billions in federal money.
Still, despite its initial shortcomings, Brostek said she hopes the Patient Freedom Act will slow down the ACA repeal process.
“Right now we are hurtling toward a repeal and rushing to come up with a replacement,” Brostek said. Congressional Republicans have set the wheels in motion for repealing the ACA, although some, like Collins, are calling for a comprehensive replacement.
“If we are really going to come up with something better, it is going to take several months of conversations and negotiating,” Brostek said.
Joe Lawlor can be contacted at 791-6376 or at:
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