What the GOP health-care plan could mean for Washington state

The early prognosis for the Republican health-care plan in Washington state is gloomy if not grim.

Unless state leaders come up with more than $1 billion a year in cuts or taxes, hundreds of thousands of Washingtonians, mostly low-income workers, would likely lose the coverage they gained under Obamacare.

State and federal analysts are still modeling outcomes for the GOP bill unveiled last week, based on factors such as reduced federal support for the Medicaid expansion that gave 600,000 Washingtonians health insurance.

But doctors, hospitals, insurers and regulators here say impacts also could include more out-of-pocket expenses for seniors, longer waiting lines in emergency rooms, less access to contraceptives, rural hospital closures, and a roiled market for individual insurance, with a shrinking pool, rising premiums and fewer plans to choose from — putting the entire market at risk of collapse.

“It’s hard to find anyone happy with this bill except the people who wrote it,” said Dr. J. Mario Molina, CEO of Molina Healthcare, which provides insurance in 12 states and has the largest Medicaid plan in Washington.

It’s important to note these are preliminary analyses of the bill. Players in the industry are awaiting the nonpartisan Congressional Budget Office forecast of the plan’s costs and cuts in coverage. Gov. Jay Inslee has directed state offices to come up with more details specific to Washington; those are expected in the coming week.

It’s also worth noting that changes to the Affordable Care Act (ACA), also known as Obamacare, are expected to directly affect about 13 percent of this state’s population — the 600,000 who became insured through Medicaid expansion plus 300,000 in the individual market, three-quarters of whom purchase coverage through the state exchange created by the ACA.

Most Washingtonians have employer-sponsored insurance, or have coverage for the elderly, disabled and very poor. About 6 percent of the state is uninsured.

Already, though, S&P Global Ratings has estimated that as many as 10 million Americans could lose coverage under the GOP plan. And it appears certain the plan would provide Washington with less federal money, which could have cascading impacts.

For instance, if low-income people lose their insurance through Medicaid, they’ll likely fall back on seeking acute care in emergency rooms. That could mean longer lines and waits for everyone, said Dr. Shane Macaulay, president of the Washington State Medical Association.

“ER overcrowding affects everybody who’s got commercial insurance, everyone who has a car accident who shows up in the emergency room,” Macaulay said.

He sees the GOP plan as having a potential ripple effect “on the entire health-care system, not just Medicaid” patients.

Approved by two House committees Thursday, Republicans hope to pass the bill quickly despite opposition from Democrats, criticism by some conservatives and pleas from groups such as the American Medical Association, the American Hospital Association and AARP.

Medicaid coverage

A major concern in Washington is that the plan effectively phases out the Medicaid expansion, which is funded by taxes on the wealthy, drug manufacturers and others.

The GOP bill repeals those taxes, gutting funding for expansion, which stretched eligibility to include incomes up to 138 percent of the federal poverty level. That translates to singles making about $16,000 a year and couples earning $22,000. (A person working full-time at the state minimum wage would earn $22,000 in Washington this year.)

Starting in 2020, the GOP plan would cut federal Medicaid match payments to states from 90 percent to 50 percent. For patients enrolled in Medicaid expansion before then, Washington would continue to receive 90 percent match payments.

But the chief worry is about payments for new enrollees and patients who would cycle on and off Medicaid depending on their employment status and pay. “We know people in Medicaid come on and off all the time,” Molina said. “If you get laid off, you say, ‘OK, I want my Medicaid back.’ ”

Another concern is that future block-grant payments would be based on 2016 per capita spending, plus inflation, rather than future needs. Jennifer Hanscom, executive director of the state medical association, doesn’t believe the payments will keep pace with increases in prescription drug costs.

The lower federal reimbursement rate likely would pit expanded Medicaid coverage against competing state needs such as education. “There’s only two places you can get that money from, education or raising taxes,” said Molina. “Neither is a good choice.”

If 600,000 people were to lose insurance, many worry about clogged ERs and less preventive care, driving up costs for crisis care of diabetes, heart disease and other conditions.

That would mean more uncompensated care for hospitals, particularly those like UW’s Harborview Medical Center, whose mission does not allow it to turn away patients.

“It will mean more charity care, which will reduce resources to treat all patients,” said Ian Goodhew, chief lobbyist for UW Medicine.

Goodhew sees the prospect of longer waiting times for all patients and a “vicious circle” of more reactive treatment for acute problems instead of primary care that hopefully prevents such problems.

Because rural hospitals tend to serve poorer populations, they’ve come to depend on Medicaid expansion, Molina said. “As uncompensated care costs go up, that means rural hospitals are threatened with closure,” he said.

AARP leaders have pointed out a broader impact of the GOP bill. Obamacare taxes have stretched the solvency of the Medicare trust fund by 11 years. Repealing those taxes, specifically the tax on high-income workers, could hasten the insolvency of Medicare and rekindle talk of privatization, according to Nancy LeaMond, AARP executive vice president.

Impacts to seniors

Seniors in the individual insurance marketplace — those 60 to 64 years old who are self-employed, retired, or can’t get insurance through work — would be hard hit by the proposed GOP bill, according to data analyses.

The plan would shift from Obamacare’s income-based subsidies to tax credits that are primarily age-based. The hope is to broaden the insurance pool by attracting more young and healthy customers while shifting more costs to older people who use more health care.

An analysis by the Kaiser Family Foundation and The New York Times found that the tax credits would be a net benefit for younger and more affluent customers in Washington’s individual market. But if you’re over 60 and earn less than $40,000 you’d lose buying power and pay more out-of-pocket under the tax-credit plan.

AARP estimates that current coverage could increase by up to $3,200 for a 64-year old, while reducing premiums by about $700 for a younger enrollee.

Molina and state Insurance Commissioner Mike Kreidler see more grave implications.

By eliminating the ACA’s individual mandate for coverage, the bill could prompt insurers to flee the market if not enough healthy folks buy insurance. Washington state tried something similar in the 1990s and saw a “death spiral” of fewer healthy customers and fewer insurers until the individual market collapsed, Kreidler said.

“One of the real problems for Republicans is they’re making a lot of insurers very anxious,” Kreidler said. “We saw this before, if one carrier bolts it’s hard to hold the rest.”

Molina sees the GOP bill as pushing the individual market — which he said has “performed pretty well under the ACA” — to the brink of collapse.

“I think you can easily see 30 percent rate increases,” he said, followed by fewer customers and insurers.

Women’s health care

Women seeking abortions and some basic health services, including prenatal care, contraception and cancer screenings, would face restrictions under the House Republicans’ proposed bill.

The bill would prohibit for a year any funding to Planned Parenthood, a major provider of women’s health services, restrict abortion access in covered plans in the individual market and scale back contraceptive services used by low-income women.

U.S. Sen. Patty Murray said the legislation would shift more decisions to insurers.

Under Obamacare, individual health plans can cover abortions but they must collect a separate premium to pay for them so it’s clear no federal funds are used. The GOP bill would go further, prohibiting use of new federal tax credits to buy any plan that covers abortion.

That could make it more difficult for women covered in the individual market to find a plan that covers abortions because some insurers may drop abortion coverage if it disqualifies the entire plan from tax credits.

While federal dollars can’t pay for abortions, Planned Parenthood is reimbursed by Medicaid for other services, including birth control and cancer screenings. The phaseout of the current law’s expanded Medicaid coverage could mean that low-income women in Washington could lose access to such services.

Kreidler said the GOP’s proposal is “a direct attack on women’s rights and would lead to higher costs.”