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CT offers limited protections if ACA is tossed

If the Affordable Care Act is abolished as the result of a legal battle over the health care law, not only will more than 300,000 state residents lose coverage, but a majority of those in Connecticut could be affected.

That’s because Connecticut laws aimed at protecting consumers apply only to a minority of health insurance policies that cover state residents, and are limited in their scope and effectiveness.

State insurance laws do not apply to those who may obtain their coverage through certain policies offered by employers. For instance, state laws mandating coverage known as “essential benefits” protections for those with pre-existing conditions and other state laws apply to only about a third of the health insurance policies that cover Connecticut residents.

State laws regulate policies that cover about 670,000 people in the state. But they don’t apply to most policies that provide Connecticut residents their health care coverage.

State laws don’t apply, for example, to coverage offered to employees by companies that self-insure. A self-insured company is one where the employer assumes the financial risk of providing health care benefits to its employees.

Many employees don’t know that their companies are self-insured because their employers have contracted with an insurer like Aetna or Cigna to process claims and manage coverage. But, according to the Connecticut Department of Insurance, in 2018 about 1.2 million Connecticut residents were covered by these types of policies.

If the ACA disappears, the federal law’s protections for people on self-insured plans — including allowing children to be on a parent’s policy until they are 26  and bans on limiting  annual dollar limits on claims — would not be mandated. An employer could drop those provisions.
Three judges on the New Orleans-based 5th Circuit Court of Appeals are weighing the latest legal challenge to the Affordable Care Act and could very well decide the controversial law’s future.

That lawsuit, known as Texas v. United States, was brought by 18 state attorneys general from Republican-leaning states. It argues that the ACA is unconstitutional because Congress has rolled back the tax penalty Americans once had to pay if they didn’t have health insurance. The requirement is called the individual mandate.

Connecticut, meanwhile, joined a group of Democratic attorneys general, led by California’s Xavier Becerra, that argue the rest of the ACA remains valid, despite the end of the tax penalty.

The abolition of the ACA would most directly impact nearly 268,000 Connecticut residents who obtained coverage through the law’s expansion of Medicaid, known as HUSKY D in the state, and the more than 66,000 who now benefit from ACA subsidies that help them purchase insurance.

State Healthcare Advocate Ted Doolittle. (Arielle Levin Becker)

But the effects of the law’s repeal would be felt by many more people, in different ways, said Ted Doolittle, Connecticut’s health care advocate.

“It would be super disruptive,” he said. “In addition to the horrible impact on people, it will have an impact on the state’s insurance industry.”

That industry has benefited as federal subsidies have allowed more people to purchase health insurance policies.

State law would allow Access Health CT, the state’s ACA marketplace, to continue to sell policies. But very few are expected to be able to afford those policies without the ACA’s subsidies, which bring down the cost of premiums for low-and-moderate income Americans and, in some cases, eliminate or reduce co-payments and deductibles.

Doolittle said some Connecticut residents may be able to “dig deeper” to pay for individual insurance policies, but the state won’t be able to help those who find that without federal subsidies, they can no longer afford insurance.

“Where would that money come from?” he asked.

Others would also feel the impact of the end of the ACA, which has been steadily closing the “donut hole” in Medicare Part D, which covers prescription drugs.

Instead of having to pay the full cost of medications while in the donut hole, beneficiaries now pay a percentage of the cost — and that percentage has been declining since 2011. Under the ACA, the donut hole for brand named drugs was closed completely this year.

“Without the ACA, that donut hole would come back and there’s nothing Connecticut could do about it,” said John Aloysius Cogan, Jr., a health insurance expert at the University of Connecticut School of Law.

The end of the ACA would also allow insurers to charge as much as five times the premium for an older person than a young one and charge women more than men for coverage.

Cogan has suggested some steps the state could take to blunt the impact of the demise of the ACA.

One is to require insurers to offer comprehensive coverage to anyone regardless of their health status, preexisting conditions, or gender and bar them from setting premiums bases on these factors.
Another is creating a state-based individual mandate that would bring down the cost of insurance by requiring everyone, including the young and healthy, to purchase coverage.

Cogan also says Connecticut should consider capping payments to hospitals. He said research suggests hospitals with lots of market power raise costs because they can demand higher rates from insurers. Maryland has a rate-setting process that controls what hospitals can charge.

Connecticut residents don’t frequent hospitals or doctors any more often than residents of other states, Cogan said, but health insurance premiums are “really expensive” in the state.

“That’s because providers can charge really high prices,” Cogan said. “And they can do that because they have control over the market.”

Still, Cogan said, the abolition of the ACA would have an enormous impact in the state.

“Connecticut can do a few things to make it not so bad,” he said. “But hundreds of thousands would lose coverage.”

And other Connecticut residents may see unwelcome changes in their coverage.

6 comments

AL August 23, 2019 at 8:55 am

And to think about how politicians in this state declared that Connecticut was the national model for healthcare.

Paul Lanning August 23, 2019 at 1:17 pm

The chain is only as strong as its weakest link.

By refusing to raise taxes on multi-billionaires–and then actually LOWERING taxes on the rich–Congress placed the ACA’s cost burden where it doesn’t belong: squarely on the shoulders of middle-income earners.

The individual mandate (a Republican-inserted provision in the original legislation) should be reinstated.

A Public Option should be offered.

A wealth tax + an increased income tax rate should be levied upon America’s multi-billionaires. Our physical and ideological structures are crumbling for lack of economic balance. America ranks poorly in tax revenue as a percentage of GDP. The WIKI sortable list at this link shows this.

https://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_to_GDP_ratio

Okeezy August 23, 2019 at 1:48 pm

The ACA was ill conceived from the start by falsely claiming individuals can keep their doctors and insurance plans. Further, the Individual Mandate was never intended to force purchasers into a unisex one-size fits all policy coverage. This is not how it worked in Massachusetts where originally introduced. It is past time for CT legislators to permit waivers and allow insurance companies to offer ACA substitutes so some level of coverage can be sought until bipartisan health legislation is worked out. It is also inconceivable for any public option managed by bureaucrats to be part of the equation. This would evolve into a slow moving train wreck much like the state’s finances.

Bryan Meek August 24, 2019 at 9:20 am

The reason Obamacare failed is that it tried to escape the laws of supply and demand.

For one, it reasoned that it could raise taxes on research and development (2% surcharge on revenues!) and lower costs at the same time.

It took over the student loan industry making college more expensive, while doing nothing to incentivize students into healthcare professions. For some reason, not one journalist seems curious about this, nor will any of our congressional delegation ever take credit for it.

Steve August 24, 2019 at 5:13 pm

Bryan you talk in circles. Provide some support for your suppositions. Millions of people gained health insurance thru the ACA, previously known as RomneyCare and originally put forth by a right wing think tank—as soon as a Democrat touched it—it was evil. Schools like Quinnipiac created Med schools in anticipation of the increased need for medicine.
Then you go on a tangent with the Student Loan industry which has seen rapidly inflating costs since the 1980s under Saint Ronald of Reagan. Show me that the trajectory of cost increased at a higher rate under Obama. I know all things Obama did were terrible including the 2008 Recession which he caused despite not being President. I’d be happy to debate you on the economics of health care

Bryan Meek August 25, 2019 at 10:20 am

Obamacare took over the student loan industry. Undeniable fact and testament to one of the worst pieces of legislation in the country’s history. This has nothing to do with Reagan, Clinton, or Bush 1+2. Obama owns this train wreck. If he’s lucky it will just be an asterisk in the history books. A more accurate recording will demonstrate the failure that it is.

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