ACA repeal in Michigan detailed
2.5M state residents could lose health care coverage if GOP proposal is approved
The study comes on the heels of a Congressional Budget Office projection that the recently introduced American Health Care Act would cause 24 million people to lose their insurance over 10 years, while reducing the federal deficit by about $337 billion.
The Republican proposal jeopardizes the Healthy Michigan Plan, the Michigan Medicaid expansion that has insured 650,000 residents under the Affordable Care Act, also known as Obamacare. The ACA would be repealed and replaced with the American AHCA.
“As far as the Healthy Michigan Plan, one of the biggest concerns as proposed by the AHCA is that it essentially ends the program in 2020,” Emily Schwarzkopf, a policy analyst for the League for Public Policy, said.
For Sarah Peurakoski, the threat of a reduced or lost Healthy Michigan Plan hits close to home, and work.
Peurakoski has several relatives enrolled in the statewide Medicaid program, which offers expansive health care services for those who would otherwise have limited options. And as the executive director for Superior Alliance for Independent Living in Marquette, she encounters Healthy Michigan Plan enrollees regularly at work.
“It’s a little bit nerve-wracking,” Peurakoski said. “I think that the ACA and Medicaid are extremely essential to the disability community, and it would definitely be disastrous if there were high levels of cuts from what the AHCA is proposing. I would definitely say keep the ACA and Healthy Michigan as is.”
The inclusion of medical and dental coverage under the ACA has allowed many Michigan residents to receive check-ups that were previously out of the budget, Peurakoski said.
“What happened with the ACA was people were able to get that preventive care ahead of time instead of not having that care and then getting to the point where they had to go to the emergency room,” Peurakoski said. “Partly what I could pick up from our community was from the dental side too. If you don’t take care of your teeth with preventive visits, then you could get in with an abscessed tooth.
“Emergency room costs are exorbitant for people without insurance, or with insurance even, so when you’re preventing people from having to go in an emergency room, it’s a lot better for their pocketbook.”
Many disabled Upper Peninsula residents were able to acquire coverage for the first time with the ACA, according to Peurakoski.
She said she worries that under the AHCA, those people would lose coverage.
Although the provision in Obamacare that barred insurance companies from withholding policies from people with pre-existing conditions would stand under the GOP proposal, it appears to be of little consolation to critics of the bill. In fact, they claim — coupled with the proposed loss of the mandate that everyone have insurance — it could even cause a collapse of the health care market.
Leonard Fleck, a health care expert and former member of President Bill Clinton’s Health Care Reform Task Force, said that if individuals were no longer required to buy insurance, insurance companies would lose the broad and profitable base of healthy, young buyers that in turn made up for losses accrued when taking on other populations.
“Part of the reason why Obamacare looked the way it did and had the mandate was that younger, healthier individuals were in part subsidizing the costs of their future, possible, older selves with more health problems,” Fleck said.
Schwarzkopf said that pocketing money otherwise spent on insurance would be a risk many young people were willing to take.
“I don’t have any great medical problems. I go to the dentist, I maybe go to my annual physical, but I pay for health insurance,” Schwarzkopf said. “I’m paying for the more expensive people, and if I just decide I don’t need insurance, then there’s less money in the system to fund those older people who may have chronic diseases.”
To compensate for the lost market, premiums could skyrocket for lower-income, middle-aged and older individuals below retirement age who opt to maintain health care coverage. Those who don’t quite fall below the poverty line or are short of Medicare age — 65 years — would be faced with the steepest hikes, according to analysts.
The Congressional Budget Office found that 64-year-old people with incomes of $26,500 would have to pay $14,600 a year for medical insurance out of pocket. More than 55 percent of their annual income would go to health insurance, if they chose to purchase it.
Under the ACA, those same people pay $1,700 yearly.
Fleck said this poses an unjust risk for a large percentage of the population, especially older individuals who incur more health problems.
“It’s extraordinarily unfair and lacking in compassion for those who are less well off in our society,” Fleck said.
Michigan Department of Health and Human Services Director Nick Lyon said the state hopes to prove its program deserving of continuation.
“We’re trying to demonstrate we’ve been successful with the Healthy Michigan Plan and show that it can be a model nationally,” Lyon said, adding that the program provides incentives for enrollees to pursue healthy habits.
To preserve the Healthy Michigan Plan, however, residents might have to fork over more money in taxes to the state.
Currently, 95 percent of the funding for the Healthy Michigan Plan is provided by the federal government, and that figure would drop to 90 percent by 2020.
However, the American Health Care Act would shave that number to just 65 percent, requiring $1 billion from the state general fund to cover the gap, according to Lyon.
In those circumstances, Michigan residents would then have to decide what to forfeit: more taxes or health care services.
Schwarzkopf said, “It is cost-prohibitive. The costs would just make it very difficult.”