The American Health Care Act hurts Michigan
In the ongoing discussion to improve the health insurance system in our state and nation, it’s vital to recognize the parts of the system that are working well today as well as identify areas for improvement.
The American Health Care Act went too far in undermining progress that has been made in Michigan improving affordable access to health insurance.
For about 88 percent of Michigan’s population, the Affordable Care Act (ACA) and our current system is working well.
The employer-covered market is stable and working today.
The employer-covered market provides insurance to 53 percent of the state’s residents. This year, many insurers are raising rates by less than three percent, and some in the small business market are actually cutting rates. Increased competition here would be useful, as would overall health care cost transparency so that people with relatively high deductibles could shop wisely for good care.
Medicare is generally providing good services to its members. Nobody is seriously suggesting major changes to Medicare.
The government paid market – Medicaid and Medicare – provides insurance to 35 percent of Michigan citizens.
Traditional Medicaid, which covers children and families with low-incomes, people with disabilities and seniors and, in Michigan is managed 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: People in the program are getting care from responsible physicians and seeing better care.
The new Healthy Michigan Plan – the Medicaid expansion – is also a success. Nearly 60 percent of the 650,000 people in the plan are working men and women who are in low-paying jobs that don’t provide health insurance.
Also managed by private insurers, the Healthy Michigan Plan is helping hold down costs for the commercial market by reducing uncompensated care. The plan is working – that’s why Governor Rick Snyder has been working with Congress to maintain the Medicaid expansion allowed under the ACA.
One section of the state’s insurance system needs improvement.
The individual market has been a difficult market for some time, with high costs and many persons with pre-existing conditions unable to get coverage at all. But it’s also quite small.
In 2013, only 3 percent of the state’s residents were in the individual market. Under the ACA, that has increased to 6 percent, which contributed to the state’s uninsured being reduced from 11 percent to just 6 percent today. But that increase in those using the individual market shows some parts are working.
According to data from the Kaiser Family Foundation, 321,451 persons purchased insurance on the individual market through the ACA exchange in 2015. Of those, 81 percent, or 260,000 people received subsidies, helping them afford insurance, many for the first time in years.
That leaves 60,000 persons who did not receive any assistance, and who are likely paying high costs without assistance. This is the problem that Congress needs to address.
How can we increase stability in that portion of the individual market?
Many people have ideas. This is what people mean when they say the ACA needs to be “tweaked” or “reformed.” And we invite all members of Congress, Republican and Democrat, 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 those who have insurance through their workplace today, and those who are using government delivered insurance. We shouldn’t upset a system that is working well for the vast majority of our state’s residents.
Let’s focus on fixing the problems that are affecting a relative few, and improve affordable access to health care for all.
More resources to explore
The University of Michigan’s Center for Healthcare Research U Transformation provides an overview of how the Affordable Care Act has worked to improve care for Michigan, and how the AHCA will impact the state.
New Department of Health and Human Services Director Tom Price issued a letter to states that shows the Trump administration is prepared to kill the entire Medicaid expansion, and defund other key programs that help low-income families get access to health care.
The Michigan League for Public Policy estimates that the AHCA will endanger health care for 2.5 million Michigan residents by distributing federal funds with per capita caps or in block grants that would seriously disrupt our current Medicaid system and the Healthy Michigan Plan.