Another missed opportunity

The Louisiana legislature missed an opportunity this month to come up with a truly bipartisan replacement for Obamacare in the Pelican State, and the bill ultimately enacted — inadequate as it is — may be all that we have to fall back on if the Supreme Court invalidates the Affordable Care Act.

Which remains an unfortunate likelihood. The Justice Department during the Obama Administration opted to predicate their entire constitutional defense of the ACA on the idea that “the individual mandate” was not a mandate at all. It was a direct tax, allowed for constitutionally under the 16th Amendment. Moreover, the tax was necessary, maintained the Solicitor General’s brief, for without it the ban on pre-existing conditions provision of the ACA would cease to statutorily function. Due to the non-severability provision of the ACA, Obamacare in its entirety — even Medicaid expansion — would be invalidated. The legislation would self-destruct under its own terms.

No one ever counted on the Republican Congress reducing the individual mandate’s tax to zero, however, and the Trump Administration joining states’ attorneys general, including Jeff Landry, to argue that the entire law must go as a result.

Our Legislature tried to step in statutorily if Obamacare meets its end at the Supreme Court, yet what passed the Senate, and is widely expected to become law, hardly does the job. Even its detractors consider Senate Bill 173, authored by Sen. Fred Mills, to be well-intentioned. While the bill enshrines some important consumer protections into state law, it falls well short of providing comprehensive patient protections. Furthermore, its key provisions would only go into effect if the federal law is overturned and the tax credits or similar federal funding are preserved.

As Louisiana Budget Project senior policy analyst Stacey Roussel noted last Thursday, Mills’ legislation does prohibit health insurers from placing annual or lifetime limits on the dollar amount of benefits. It allows dependent children to remain on their parents insurance up to age 26. And it establishes in state law a set of “essential benefits” that have to be included in health insurance policies sold to individuals. The benefits are broadly similar to the ten basic benefits required under the federal law.

However, Mills’ legislation lacks Obamacare’s most important feature. The bill does not include “guaranteed issue,” a provision of the ACA that requires health insurers to enroll people regardless of health status. While the bill says health insurance plans must cover pre-existing conditions, the lack of guaranteed issue means that people can be denied coverage outright based on their health status. This would be a huge step backward, especially for the up to 40 percent of applicants who were denied coverage pre-ACA based on their health status. The bill does create a “high risk pool” for these insured, yet it only comes into force if funded by the federal government – an unlikely proposition given the current political environment in Washington.

Equally, under the ACA, the age rating is the maximum ratio between the premiums charged to the youngest population group and the oldest, typically 19- to 29-years old and 50- to 64-years old. Under existing federal law, older adults cannot be charged more than three times the premiums charged to younger adults. Senate Bill 173 increases this ratio to 5:1. According to a study on the effects of the change, the average yearly premiums for a 60-year-old would increase $3,200 for a total of $17,900 each year. This creates a significant burden for older adults living on fixed incomes or struggling to make ends meet, but who are not yet eligible for Medicare.

The Supreme Court review occurs at a rather tragic time, just as a new survey for eHealth shows that nearly twice as many insurers as last year intend to provide more plans in the Obamacare market. The survey found that 45 percent of respondents will add more plans, and 23 percent expect to reduce premiums by five percent or more as a result. The ACA has finally begun to achieve its promise.

Louisiana had a chance in the 2019 legislation to do the same. Mills could have created a backup Pelican State insurance exchange which would have rolled our large Medicaid population into a pool with those already receiving subsidies in the private market, reducing premiums for those purchasing insurance. Thoughtful critics of the ACA have long suggested the creation of such a risk pool.

More importantly, Mills could have put a ban in Louisiana on pre-existing conditions, which is a constitutionally allowed mandate for the states — if not the federal government. Admittedly, we would not have had a way to pay for it, but at least there would have existed some legal surety if the whole Supreme Court “House of Cards” on the ACA fell apart at the stoke of John Roberts’ pen.

This article originally published in the June 3, 2019 print edition of The Louisiana Weekly newspaper.