Dominick Pallone is executive director of the Michigan Association of Health Plans. Gilda Jacobs is president and CEO of the Michigan League for Public Policy.
In the ongoing discussion on how to improve the health insurance system in our state and nation, it’s vital to recognize the parts that are working, and what needs to be improved.
The House Republican health bill, the American Health Care Act, is going in the wrong direction. It would reverse the progress that Michigan has made in improving affordable access to health insurance and would make our health system worse.
In today’s world, access to health insurance is tantamount to access to health care. Better healthcare outcomes should be the goal of any changes moving forward. And for about 88 percent of the state’s population, the Affordable Care Act (ACA) and our current system is working pretty well. Any changes made to our healthcare system should ensure we are adding to the 88 percent of us who have coverage – not reducing that number.
But we should still work to reduce health care costs overall, and try to improve the individual market, the major source of concerns today.
First, let’s look at the employer-sponsored market, which provides insurance coverage to more than half of the state’s residents. This market is relatively stable and working today. Since passage of the ACA, average annual increases for family premiums are running at 3.5 percent. In an era of rapidly exploding pharmacy drug prices that now consume 20 percent of all premiums, maintaining low premium increases is an incredible accomplishment.
Next, look at public programs that provide health coverage – Medicaid and Medicare – which provide services for 35 percent of Michigan citizens. Both traditional Medicare and Medicare Advantage are providing good services to seniors and people with disabilities. We should avoid major changes to Medicare and not do anything to undermine its finances.
Similarly, Medicaid is providing good value. In Michigan, traditional Medicaid, which covers seniors, people with disabilities and low-income children and their parents, is managed smartly by private sector insurers under contract with the state. Its cost per beneficiary has increased at about a third of the cost of commercial insurance.
And outcomes are good – those in the program are getting care from responsible physicians. The health plans helping to manage Medicaid consistently rank among the nation’s best on quality score. As a result, proposals to cap and cut federal Medicaid funding for states like Michigan wouldn’t make Medicaid more efficient or perform better; it would only shift costs to Michigan and require the state to cut low-income people off the program, reduce benefits or make it harder for beneficiaries to see a hospital or doctor.
The new Healthy Michigan Plan, Michigan’s Medicaid expansion, is also a success. More than 510,000 of the 650,000 persons in the plan have incomes below the federal poverty level. Those enrolled now have access to much needed preventive care services and are seeing primary care physicians.
The Healthy Michigan Plan, managed by private insurers, helped to cut uncompensated care for hospitals by nearly 50 percent, according to University of Michigan studies. The plan is working. That’s why Gov. Rick Snyder has been working with Congress to maintain the Medicaid expansion funding allowed under the ACA.
But one part of our insurance system, here and nationally, needs improvement – the individual market. Long before the ACA, legislatures including ours have grappled with reforms under threats that the individual market was in a “death spiral.” Prior to the ACA, many persons with pre-existing conditions struggled to find a choice of affordable coverage at all. And today, the individual market struggles with well-documented affordability concerns. Those issues are connected.
While the individual market has had its difficulties, it’s also important to note that the market is quite small. Today, only 6 percent of the state’s residents are buying insurance in the individual market – about 260,000 people. But four out of five of them receive subsidies that help make insurance affordable. That leaves some 60,000 persons who did not and face high costs without assistance.
This is the primary problem that Congress needs to address.
How can we increase stability and affordability in the individual market? There are many laudable ideas that should be thoroughly discussed and debated by Congress, as the ACA is “tweaked” or “reformed.” Perhaps the subsidies need to be expanded. Perhaps those in the individual market could be invited to purchase a form of Medicaid. It is important that Congress continue cost sharing reduction payments that help stabilize the market. We invite all members of Congress to roll up their sleeves and address this shortcoming in a bipartisan fashion.
But repealing the entire act and replacing it with something that looks like the American Health Care Act will hurt many more Michiganders than it purports to help. When discussing health care reform, we would be wise to borrow the oath of the medical profession and “first, do no harm.”