[V]ermont’s largest insurance company and the association representing all of the state’s hospitals are coming out against a Republican proposal in Congress that would repeal and replace the Affordable Care Act, also known as Obamacare.
The proposal is called the American Health Care Act. It would keep a few popular commercial insurance regulations from Obamacare while lowering the amount of help the federal government gives people to pay their health care premiums.
Additionally, the plan would place caps on federal Medicaid money that states could receive starting in 2020. The Vermont Agency of Human Services, which gets hundreds of millions of dollars each year from the federal Medicaid program to take care of vulnerable populations, is bracing for those cuts.
Don George, the CEO of Blue Cross Blue Shield of Vermont, is opposing the AHCA. The insurer covers 70 percent of the state’s commercial market, including 90 percent of commercial customers who buy insurance through Vermont Health Connect, which was created under Obamacare.
George said he has not considered how the proposed law could affect the company’s finances but that it would hurt his customers.
“For Vermont and Vermonters, we don’t see anything good,” he said Thursday. “It’s nothing we can support.”
George said the Republican proposal would do away with the current federal subsidies — called the Advanced Premium Tax Credit — and replace them with a different type of tax credit that is less useful for low-income customers.
The Advanced Premium Tax Credit currently helps lower-middle-income people pay for their commercial insurance coverage if they do not qualify for Medicaid. For example, a Vermonter making more than $15,800 but less than $47,500 would receive this monthly help with premiums.
George said the new tax credit would be based solely on the age of the person getting insurance. The Republican plan would give a $2,000 subsidy to someone under age 30 versus $4,000 to an individual over 60, according to Vox.com.
George said that plan could hurt low-income people because the proposed tax credits appear to be a flat dollar amount. Under Obamacare, the subsidies are calculated to ensure a person has to pay only 2 percent to 9.5 percent of premium costs out of pocket.
“We don’t know if (the proposed tax credit is) something that they would have to apply for that’s completely separate from their tax return,” he said. “This is a good example of the myriad, myriad details that come along with these that we don’t yet understand.”
“We worked really hard to advocate for this law,” Tieman said. “We worked really hard to get it passed, and then we worked really hard to explain it and implement it. That work resulted in major benefits to our health care system, including not only the really impressive coverage expansion throughout the country, but also a slowdown of health care cost increases across the nation.”
In Vermont, Obamacare is credited with cutting the number of residents without insurance in half between 2009 and 2014. Previously uninsured people are thought to have obtained insurance through either Medicaid or the help they get paying for commercial insurance.
Tieman said those newly insured people also benefited hospitals, which have been under substantially less pressure to provide charity care. He said if the Republicans’ proposed American Health Care Act passes, more people would become uninsured and hospitals may need to give out more charity care.
“We can always find places where (the law) needs to be tweaked,” he said. “This is throwing the baby out with the bathwater, and we can fix the things that aren’t working without trashing the whole law and putting people’s coverage in jeopardy and creating a lot of chaos and uncertainty and confusion.”
He pointed to reports that economists who work for Congress have not yet vetted the Republican proposal. Business Insider reports that many in Washington, D.C., are expecting a bad report from economists studying the plan.
“It could literally be more expensive than the Affordable Care Act and accomplish less,” Tieman said. “We just don’t know.”
The Agency of Human Services will hold a press briefing on the proposed law and its impact on Vermont on Friday at 11 a.m.
