Topic Category: Health

Senate Health Bill a Warmed-Over Version of House Bill

Posted on by Raymond Castro

The Senate bill to repeal the Affordable Care Act is nothing more than a warmed-over version of the House bill, which would cause great harm to the health and economic security of hundreds of thousands of New Jerseyans. The Senate proposal revealed today retains all the major provisions in the House bill that would harm New Jerseyans the most – and in some cases makes even deeper cuts.

The bill would cause New Jersey’s uninsurance rate to skyrocket. (We will not have the final estimate until the Congressional Budget Office completes its analysis, but the phase out of the Medicaid expansion alone would cause the number of uninsured to increase by up to 400,000.)

Specifically, the bill:

  • Effectively repeals the Medicaid expansion that assists 562,000 New Jerseyans. They would lose coverage at a slower rate than under the House bill – but the bottom line is that they would all still likely lose their health coverage. The federal matching rate would be reduced starting in 2021 in the Senate bill, instead of 2020 in the House bill, and it would be phased down over three years. However, many states may not have the funding to pay for the higher state matching rate so they may have to end the expansion for new applicants the first year anyway.
  • Continues the radical restructuring of Medicaid by permanently capping and reducing the funding needed to serve 1.6 million New Jersey seniors, people with disabilities and children. In fact, the Senate makes even deeper cuts to Medicaid.
  • Raises premiums and eliminates subsidies that help reduce costs for New Jersey consumers. There are up to 350,000 New Jerseyans who buy their own insurance who could end up paying much more. This would be an even greater problem when over a half million New Jersey residents lose their Medicaid expansion coverage and must turn to the marketplace for insurance.
  • Allows states to drop basic services like maternity care, mental health and drug treatment. Insurers could in effect still deny insurance to people with pre-existing conditions by simply eliminating the benefits they need from their coverage. It is estimated that 24 percent of all non-elderly residents, or 1.2 million people, have a preexisting condition in New Jersey.
  • Allows insurers to charge older residents five times more than younger adults for their coverage. Over half of everyone in the New Jersey marketplace is age 35 or older.
  • Includes huge tax cuts for the wealthy. Millionaires in New Jersey would receive a tax cut averaging $50,000, which would only increase the enormous income and wealthy inequality in the state.

 

 

 

House-Passed Health Bill Would End Coverage for More Than Half a Million New Jerseyans

Posted on by Raymond Castro

Proposal shifts billions in federal costs to New Jersey and could reduce consumer protections for millions
To read a PDF version of this report, click here.

New Jersey has a lot at stake as the Senate considers the American Health Care Act (AHCA), because the bill lawmakers are considering is still a disaster for New Jersey – made worse by the amendments added by the House.

The provisions in the original bill that most harm New Jerseyans – effectively eliminating the Medicaid expansion, permanently capping Medicaid, repealing health insurance subsidies for moderate-income New Jerseyans and eliminating the individual and employer mandate – essentially remained the same in the House-passed version. The repeal of the Medicaid expansion and subsidies in the marketplace alone would result in a $28 billion loss in federal funds over 10 years and cut about 54,000 jobs, causing irreparable harm to New Jersey’s health, budget and economy

These findings are consistent with the recent Congressional Budget Office (CBO) analysis[1] that found little difference between the original and the House-passed bill at the national level. For example, it concluded the House-passed bill would cause about the same number of Americans to become uninsured as in the original (23 million and 24 million, respectively).

One way or another, this bill would hurt most New Jerseyans: seniors, people with disabilities, children, working families, health providers and ordinary taxpayers. The only way to prevent such widespread pain is for the Senate to reject proposals that:

  • Effectively end the Medicaid expansion by reducing the matching rate
  • End the Medicaid program as an entitlement by permanently capping and reducing funding
  • Replace subsidies for moderate-income Americans with tax credits that offer less or no assistance to those who need it most
  • Reduce essential benefits and consumer protections

More Than Half a Million New Jerseyans Would Lose Coverage by 2026, Spiking the Uninsurance Rate by 50 Percent

New Jersey’s remarkable progress in reducing the uninsured would be more than reversed under this bill. Under the Affordable Care Act (ACA), more than 800,000 residents gained coverage, decreasing the state’s uninsurance rate to 9.8 percent from 13 percent for people below age 65. Under the House-passed bill, an estimated 540,000 New Jerseyans would lose coverage, making that rate jump to 13.5 percent by 2020 before eventually reaching 14.7 percent by 2026.

In short, the uninsurance rate would increase by 50 percent and would actually be higher than it was before the ACA. There are a number of reasons for this, including that about 172,000 New Jerseyans were covered under NJ FamilyCare under pre-ACA federal waivers that have since expired.

Americans would start to become uninsured as soon as the AHCA is enacted, according to the CBO, which assumes that that would take place in 2017. In New Jersey that means about 16,000 New Jerseyans would become uninsured this year, 337,000 New Jerseyans would lose coverage by 2020 and eventually 540,000 more Garden State residents would be uninsured by 2026.

New Jerseyans would lose coverage in several ways.

Most would become uninsured due to the phase-out of the Medicaid expansion, because very few of the recently covered could afford insurance in the new marketplace. For example, a typical 45-year-old at the federal poverty level currently pays nothing for Medicaid, but would have to pay $2,390 in net premium costs in the new marketplace, which is 19 percent of his or her entire income.[2] Given that most of the poor in New Jersey cannot even afford their very high housing costs, most have no disposable income for these additional costs.

Meanwhile, consumers in the individual market would lose coverage due to higher out-of-pocket costs for lower-income residents, the administrative complexity of applying for and administering the new tax credits and the repeal of the individual mandate. In addition, there would be a relatively small number of people currently in employer-based insurance who would lose coverage due to the repeal of the employer mandate.

The individual market coverage losses are largest early on, and then decrease slightly over time, but coverage losses in Medicaid only increase over time. Thus in 2020 the newly uninsured consist of an equal number of New Jerseyans in Medicaid and the Marketplace – but by 2026 about two-thirds are from Medicaid.

Number of Uninsured Would Swell in All Congressional Districts

The House-passed health bill would hit all parts of New Jersey hard, with tens of thousands of residents losing coverage in every Congressional district. This is clearly not a partisan issue. In fact, on average, districts represented by Republican Congressmen would see a larger average percentage increase in the number of uninsured than districts represented by Democrats. Constituents represented by the only two members of New Jersey’s Congressional delegation who voted in favor of this bill – Congressmen Tom MacArthur and Rodney Frelinghuysen – would be particularly hard hit; these districts are two of three in the state with percentage increases in the uninsured above 100 percent.

One in 10 New Jersey Adults Would Lose Coverage Due to the Effective End of the Medicaid Expansion

About 562,000 New Jersey adults are enrolled in the Medicaid expansion. Most of these beneficiaries are working in – or live with someone working in – a low-paid job. Many are parents trying to support their children. And the AHCA would quickly result in virtually all of these New Jerseyans losing their health coverage.

Under the AHCA, someone on the Medicaid expansion in December 2019 would be allowed to stay enrolled at a 90 percent federal match starting in 2020 until they became ineligible. But the problem is that the income of Medicaid beneficiaries often changes due to fluctuations in their wages and hours. If a person earned a little more and became ineligible for the Medicaid expansion, the federal government would no longer provide the higher 90 percent match if he or she returned. The end result: Within just a few years, nearly all Medicaid expansion recipients (99 percent, according to the CBO) would have left the expansion population and would therefore no longer be matched at the higher rate.

The AHCA Shifts Billions in Federal Costs to New Jersey

The proposal passed by the House would cause New Jersey to lose $21 billion in federal funds for the Medicaid expansion over seven years, creating a health crisis in New Jersey and making the state’s budget crisis even worse. This problem would take effect quickly because of the rapid turnover in Medicaid-eligible workers. In the first year alone the state would lose about $1.4 billion in federal funds, which would increase to almost $4 billion dollars a year by 2026.

Currently the state relies on about a half billion dollars in savings each year from the Medicaid expansion to help balance the state budget.[3] These savings include, for example, reduced state funding for charity care to hospitals and a lower state matching rate for adults who were previously covered under NJ FamilyCare. However the biggest problem would be caused by the likely loss of $21 billion in federal funds that the state uses to ensure about half a million residents have health care via the ACA’s Medicaid expansion.

Maintaining Medicaid Expansion Would Cost New Jersey Billions

The AHCA does not prohibit states to continue offering an expanded Medicaid, but it shifts a prohibitively large burden of the cost back to states. New Jersey would have to pony up 50 percent of the cost of new Medicaid expansion applicants starting in 2020, rather than the 10 percent it has to provide under the ACA.

This would cost the state $600 million in the first year; by 2026 New Jersey would be on the hook for $1.8 billion a year – a total of $9 billion over seven years starting in 2020 when the phase-out starts under the AHCA.

Continuing the Medicaid expansion would be more difficult for New Jersey than most other states. For one, it has one of the largest enrollments in the Medicaid expansion and the federal matching rate that would be available to New Jersey under the bill would be only 50 percent, the 42nd lowest rate in the nation.[4] And New Jersey is already in a state of near bankruptcy, with many other urgent and significant funding needs. Lastly, the state’s economy is expected to continue to lag behind the rest of the nation through 2025.[5] For these reasons, this analysis assumes the state would be in no financial condition to continue the Medicaid expansion.

A Permanent Cap on Medicaid Would Threaten the Health of 1.6 Million New Jerseyans

New Jersey would also lose additional federal funding under the proposed Medicaid per capita cap. The bill would establish a dollar-amount cap on each person enrolled in Medicaid. The cap would be different for different types of enrollees (aged, disabled, children, adults, and adults in the Medicaid expansion) and it would be adjusted annually by the federal index for health services prices (CPI-Medical) for adults and children, and the same index plus one percentage point for seniors and people with disabilities. Given that the CBO projects that the index for health costs will increase on average by 3.7 percent annually from 2017 to 2026, compared to a 4.4 percent increase for Medicaid costs – it would guarantee savings to the federal government (and lost federal funds to the state) – which is the purpose of the cap.

Such a cap would affect everyone on Medicaid, especially seniors and people with disabilities because they represent about three quarters of Medicaid funding. Under a per capita cap model there is a disincentive to reduce eligibility because the federal funding follows the individual.

Therefore the most likely scenario is that there would be a major decrease in the reimbursement rate for most services, making them inaccessible to thousands of New Jerseyans – and reimbursement for some services could be eliminated entirely. This would dramatically affect thousands of Medicaid providers who would see a sharp decrease in revenue, especially New Jersey’s hospitals, which already have had their state and federal charity care funds cut by over half. This is another area where New Jersey would fare worse than most other states because its current reimbursement rates are already so low. For example, New Jersey’s rate to physicians for all services is less than half what Medicare pays, ranking the state 49th lowest nationally.[6]

This report does not include an estimate for the federal funding loss that would result from a per capita cap because it would likely underestimate the impact. That is because once a cap is established in Medicaid, it would be very easy for Congress to reduce it at any point, which is the point. In fact, the President has already proposed reducing the caps in his budget even though the Medicaid per capita cap legislation hasn’t been enacted yet. Other federal entitlement programs that have had their funding capped have never recovered. Given that Medicaid is a $15 billion program that represents about 25 percent of New Jersey’s budget, even a slight decrease in the $10 billion in federal funding the state currently receives could have catastrophic implications for Medicaid and other state priorities.

Premium Tax Credits Would be Reduced by $7 Billion Over 10 Years

In addition to the loss of $21 billion in Medicaid over seven years, New Jerseyans purchasing insurance in the marketplace would lose about $16 billion in current premium tax credits over 10 years. That loss would be partially offset by a $9 billion increase in new tax credits starting in 2020, for a net decrease of $7 billion in premium tax credits. The main reason for the overall loss is the current tax credits – which are calculated to ensure that no one pays more than a certain share of their income on insurance – would be replaced with lower, flat credits based on age.

The AHCA’s credits are $2,000 for the youngest consumers and $4,000 for the oldest, and are gradually phased out starting at $75,000 annually for a single person and $150,000 for joint tax filers. That will mean that higher-income New Jerseyans would receive a premium credit for the first time but lower-income New Jerseyans who need assistance the most would see a major drop in their tax credits. On average, a person buying insurance in the marketplace would pay $3,600 more in out-of-pocket expenses under the bill.[7] What’s more, a consumer now is usually protected from any increases in insurance premiums as long as they select the marketplace’s standard (silver) plan, but under the AHCA the consumer pays for the full increase.

Eventually premiums would go down slightly, but only because more costs would be shifted to the consumer in out-of-pocket expenses. This would be especially true for older people because the bill allows insurers to charge them five times the amount for premiums than young people. A typical 60-year-old would pay $8,000 more for insurance; even taking into account tax credits they would be hit with an unaffordable 800 percent increase[8]

In addition, as a result of amendments that were adopted and sponsored by New Jersey’s own Congressman Tom MacArthur, states would be allowed to greatly increase premiums based on pre-existing conditions and to eliminate many essential benefits like hospitalization, maternity care and mental health or substance abuse treatment. This would shift even more out-of-pocket costs to the consumers Additional funding was added to Patient and State Stability Fund in the bill to help address these problems but it would not be nearly sufficient to offset the cost to consumers.[9]

To be conservative, this analysis assumes that New Jersey would not request these waivers. However, that would still be a distinct possibility. For one, prior to the ACA New Jersey allowed insurers to issue bare-bones health plans and deny treatment for pre-existing conditions for 12 months after enrolling. In addition there would be pressure on the state to apply for waivers if premiums increase to unacceptable levels. Furthermore, if New Jersey does not submit these waivers but other states do it could still affect New Jerseyans, because employers are free to base their benefits on what another state requires as long as the business has a site in that state.

Health Care Cuts Being Used to Free Up Money for Big Tax Cuts for Wealthy Americans

The Republican leadership in Congress has made it clear that federal savings from these cuts to health care would pay for big tax cuts for wealthy Americans. In New Jersey, the wealthiest 5 percent of households will receive a total of $13 billion in tax cuts over 10 years. The tax cuts are most concentrated at the very top, with the wealthiest 1 percent of New Jersey taxpayers receiving 73 percent of the tax cut. These taxpayers, with an average annual income of $2.9 million, would receive an average tax cut of $23,000 a year.[10]

Proposal Would Disrupt New Jersey’s Economy and Cause the Loss of Thousands of Jobs

As might be expected, the loss of $28 billion in federal funds would seriously hurt the state’s economy. The $4.8 billion or so in federal funds New Jersey would be losing each year by 2026 would lead to a decrease of $6.6 billion in economic activity and the loss of 54,000 jobs.[11] That’s because federal funds, which come from outside the state, have what economists call a “multiplier effect.” As the funds make their way through the economy, they increase economic activity. For example, a nurse is hired, and he or she now has the income to buy a house or something else, which also generates additional economic activity and jobs.

Methodology

Increase in the uninsured

It was estimated that about two-thirds of everyone losing Medicaid due to the phase-out of the Medicaid expansion would not be able to secure alternative health insurance and therefore would become uninsured. This estimate was adjusted for each year based on the CBO estimate nationally. It was conservatively assumed that enrollment in the Medicaid expansion would not increase over the period studied consistent with recent enrollment rates.

To determine the number of the uninsured as result of changes in the marketplace, it was estimated that half of everyone in the marketplace with a subsidy would become permanently uninsured leaving about 100,000 New Jerseyans uninsured by 2026. To determine the number of uninsured in each prior year, the CBO national rates were used.

To calculate the number of uninsured due to changes in employment based insurance, New Jersey’s share of the US population was applied towards the CBO national estimates for the uninsured due to the loss of this insurance.

To determine the number of persons who would have been uninsured under the ACA, New Jersey’s number of uninsured for 2015 based on the 2015 American Community Survey was adjusted in subsequent years according to CBO national projections. To calculate New Jersey’s total population, the American Community Survey data for 2015 was adjusted based on its historical increase in the state’s population. The final uninsurance rate due to AHCA was calculated by dividing the total new uninsured each year by the state’s projected population under age 65 each year.

Lost federal funding

2017 New Jersey federal Medicaid funds were adjusted each year based on the state’s historical increases in per capita costs in the Medicaid expansion to determine the projected federal funds under the ACA (baseline) in New Jersey. These amounts were reduced based on the CBO attrition estimates nationally. The baseline was subtracted from the projected federal funds under AHCA to calculate the loss in federal funds each year. Unlike the CBO national estimate, it was assumed that the federal funding loss would not start until 2020 since there is no cost sharing in Medicaid in New Jersey and there is no incentive for enrollees to leave earlier. To calculate lost federal funds in the marketplace, New Jersey’s share of the national marketplace enrollees was applied to the CBO national estimates for the federal premium tax credit savings.

Congressional district impact

Each Congressional District’s share of Medicaid expansion enrollees as estimated by the NJ Division of Medical Assistance and Hospitals and share of marketplace enrollees as estimated in the 2015 American Community Survey for New Jersey was applied to the statewide estimates above.

 

Endnotes

[1] Congressional Budget Office, H.R. 1628, American Health Care Act of 2017 As passed by the House of Representatives on May 4, 2017, May 2017.

[2] Center on Budget and Policy Priorities, People Losing Medicaid Under House Republican Bill Would Face High Barriers to Coverage, June 2017.

[3] NJ Department of Human Services, Responses to OLS Questions on Governor’s FY2018 Budget, 2017.

[4] Kaiser Family Foundation, Federal Medical Assistance Percentage (FMAP) for Medicaid and Multiplier.

[5] Rutgers University, R/ECON: NJ’s Economy Will Continue to Lag the Nation’s Through 2025 While Undergoing Structural Changes, 2017.

[6] Kaiser Family Foundation, Medicaid-to-Medicare Fee Index, 2014.

[7] Center on Budget and Policy Priorities, House-Passed Health Bill Cannot Be Fixed, May 2017.

[8] Ibid 7

[9] New Jersey Policy Perspective, New Jerseyans with Pre-Existing Conditions Remain at Risk, May 2017.

[10] Institute on Taxation and Economic Policy, Affordable Care Act Repeal Includes a $31 Billion Tax Cut for a Handful of the Wealthiest Taxpayers: 50-State Breakdown, March 2017.

[11] NJPP analysis of economic model in Families USA, New Jersey’s Economy Will Benefit from Expanding Medicaid, February 2013.

 

Tax Credits Are No Substitute for Medicaid Expansion

Posted on by Raymond Castro

The American Health Care Act (AHCA) passed by the House of Representatives last month would dramatically increase health insurance costs for low-income New Jerseyans who would lose coverage under the Medicaid expansion, according to a new report by the D.C.-based Center on Budget and Policy Priorities.

The new estimates of increased costs – which would be most pronounced for older low-income New Jerseyans – clearly show that the refundable tax credit included in the House bill is a terribly inadequate substitute for the Medicaid expansion, which assists over half a million New Jerseyans and would be effectively ended by the AHCA.

Here are the estimated insurance premiums – after tax credits – for different New Jerseyans at the federal poverty line (annual income of about $12,600 for a single adult).

A 60-year-old

  • Net premium under AHCA: $8,642
  • Net premium as share of income: 69%
  • Net ACA premium as share of income: 0%

A 45-year-old

  • Net premium under AHCA: $2,390
  • Net premium as share of income: 19%
  • Net ACA premium as share of income: 0%

A 30-year-old

  • Net premium under AHCA: $1,126
  • Net premium as share of income: 9%
  • Net ACA premium as share of income: 0%

The situation would be even worse for poorer New Jerseyans; for residents at 50 percent of the federal poverty line, net premiums under AHCA would represent 137 percent of annual income for a 60-year-old, 38 percent for a 45-year-old and 18 percent for a 30-year-old.

It’s worth noting that these estimates are conservative, as they project premiums before any state waiver of Affordable Care Act (ACA) protections for people with pre-existing conditions and ACA requirements for what health insurance plans must cover. The consequences for low-income adults with serious health needs in states that choose to waive these protections would be even more dire. The study also does not take into account the higher cost of living in New Jersey, which leaves the poor no disposable income left to pay for health care.

As the Senate considers changes to the House GOP health bill, some have claimed that phasing the repeal out more slowly or delaying it by two years would avoid these harms. But neither of these proposals change the ultimate outcome: a huge cost-shift to states ending the Medicaid expansion and causing millions to lose affordable coverage.

In Opioid Crusade, Christie Aims at Wrong Target

Posted on by Gordon MacInnes

This op-ed appeared in the May 22 2017 edition of the Philadelphia Inquirer.

If you’ve been out of touch this past year, you probably won’t guess the obsession of New Jersey’s governor. No, it’s not the state’s steady decline in its credit rating that will cost it hundreds of millions in extra dollars down the road. Nor is it the deterioration in New Jersey’s public transit network that threatens the state’s greatest economic asset of location, location, location. Property taxes still a drain for most families? Not on the governor’s agenda. In the bottom ten of states for job and income growth? Not even acknowledged.

Instead, Gov. Christie has focused almost exclusively on opioid addiction. A majority of the governor’s recent press releases, and about 80 percent of this year’s State of the State, have focused on this issue. His public schedule is dominated by the governor’s sermons to mobilize attention to the problem and praise those already in the battle.

Elevating public concern about a growing public health problem is understandable; the mystery is the governor’s choice for financing this expensive effort.

At the heart of the governor’s crusade, which he hopes to take nation-wide, is his push to force New Jersey’s only nonprofit insurance company to pony up $300 million a year to help out. Gov. Christie’s singular and first-time ever focus on Horizon Blue Cross Blue Shield as the principal revenue source for attacking this problem is accompanied by an effort to stack its board with four more politically-selected directors and to order the banking and insurance department to undertake a special audit.

What deepens the mystery is that the governor’s has made no effort to preserve the largest source of funding to assist opioid addicts: Medicaid.

Medicaid pays for a wide array of “behavioral” treatments, from prescriptions to cut the urge to group sessions with professionals to support withdrawal. Medicaid expansion, which the governor was smart to accept for New Jersey, has extended coverage to 560,000 Garden Staters, including many who are struggling with addiction. And, the federal government now picks up 94 percent of those costs instead of the 50 percent it covers for other Medicaid programs. In this year’s state budget, Medicaid funding is the largest item – even greater than school aid – at $8.7 billion.

Despite this organic connection of the growing opioid problem and Medicaid financing, Gov. Christie has stood on the sidelines as the battle over Medicaid’s future rages in Washington. He accepted the chair of President Trump’s task force on the opioid problem, but is silent on protecting the primary source of funds to assist addicts. He sat out the public debate on the first iteration of Trumpcare, which set the course for a steady decline in overall Medicaid funding and essentially shifted the cost of the expansion from the federal government to the states – to the tune of $8.8 billion for New Jersey over the next decade, a sum that the almost-bankrupt state cannot afford.

Gov. Christie was similarly silent during the debate on Trumpcare II that barely passed on May 4 – put together by New Jersey’s own Congressman Tom MacArthur – which on top of the deep cuts to Medicaid allows states to waive protections for people with pre-existing conditions. Specifically, since insurers could take into account a person’s medical history in setting rates, insurance would be unaffordable for addicts. Worse, they can exclude drug treatment entirely from the mandated policy benefits and, once again, re-impose annual and lifetime limits on payments, which would be catastrophic for opioid addicts. In short, insurance companies would no longer be required to provide affordable coverage for the approximately 20 million drug-addicted Americans.

The day after Trumpcare II passed, the governor finally spoke up for protecting Medicaid, but it’s not like he’s opposed to the House measure. “I want to read it”, he said, to “see if I’m concerned.” Why would a governor seeking to run a national campaign to vanquish opioid addiction be so timid as the largest sources of assistance are threatened with dismantling?

Even if Gov. Christie succeeded in raiding Horizon for $300 million yearly, it would be a flyspeck against the huge defunding of Medicaid and private insurance coverage mandated and financed by Obamacare. If the governor wants to be taken seriously about waging the fight against opioids, he needs to redirect his public ire away from Horizon’s executives and toward the White House and the U.S. Capitol.

 

Dismantling Medicaid Would Harm New Jersey’s Women

Posted on by NJPP Staff

The health bill passed by the House, in particular its proposal to cap and cut Medicaid and end the program’s expansion, would have devastating consequences for the nearly 1 million women in New Jersey who rely on the program, according to a new report from the Washington, DC-based Center on Budget and Policy Priorities.

Women would bear an outsized share of the burden of these cuts because they not only make up a majority (54 percent) of Garden State Medicaid beneficiaries, but are also the primary users of family planning and maternity benefits and are much more likely to use Medicaid’s long-term services.

With the debate over health care shifting to the Senate, Senators Booker and Menendez can prevent these harmful cuts and other changes from ultimately becoming law.

“The Senate must protect New Jersey women – and all New Jerseyans – by rejecting any bill that causes people to lose coverage, caps or cuts Medicaid, ends the Medicaid expansion or takes away critical protections,” said Jon Whiten, Vice President of New Jersey Policy Perspective. “Failing to meet any of these standards would hurt New Jersey women and families.”

The House-passed bill, which President Trump supports, would slash more than $800 billion from Medicaid over ten years by effectively eliminating the Affordable Care Act’s (ACA) expansion of Medicaid to low-income adults and imposing a “per capita cap” on the program. The per capita cap would break the federal government’s decades-long guarantee to pay a fixed share of states’ Medicaid costs.

These cuts would put at risk the critical support Medicaid gives to women throughout their lives:

  • Nearly all women use some form of family planning during their reproductive years, and Medicaid finances 75 percent of all publicly-funded family planning services. The House-passed bill also specifically targets access to women’s health care services by barring states from reimbursing Planned Parenthood for its preventive health and family planning services for women and men enrolled in Medicaid.
  • Medicaid provides health care for nearly half of all pregnant women, supporting them through their pregnancies and ensuring that their babies have a healthy start. In fact, Medicaid financed 28 percent of births in New Jersey in 2010.
  • Because women live longer than men, women are much more likely to use Medicaid’s long-term services and supports as they age. The program also plays an especially critical role for older women of color who are also enrolled in Medicare, covering nearly 40% of Latina and African American women over 65.

“Medicaid plays a vital role in helping meet the unique health care needs of women, who are the primary users of family planning and maternity care and more likely to use long-term services. Under the House bill, many low-income women would struggle to afford the services they and their families need,” said Ray Castro, Director of Health Policy at New Jersey Policy Perspective. “Our Senators need to protect Medicaid – not cut it.”

The House-passed bill also includes several provisions that are especially harmful to women with private insurance. For example, it would allow states to opt out of the ACA’s Essential Health Benefits (EHB) standard, effectively allowing insurers to charge women much more than men by leaving many women without affordable access – or any access – to maternity coverage. It also would give states the option of allowing insurers to charge far higher premiums to people who are pregnant, have had a c-section, or were treated for injuries resulting from domestic violence.

Dismantling Medicaid Would Harm New Jersey’s Women

Posted on by NJPP Staff

The health bill passed by the House, in particular its proposal to cap and cut Medicaid and end the program’s expansion, would have devastating consequences for the nearly 1 million women in New Jersey who rely on the program, according to a new report from the Washington, DC-based Center on Budget and Policy Priorities.

Women would bear an outsized share of the burden of these cuts because they not only make up a majority (54 percent) of Garden State Medicaid beneficiaries, but are also the primary users of family planning and maternity benefits and are much more likely to use Medicaid’s long-term services.

With the debate over health care shifting to the Senate, Senators Booker and Menendez can prevent these harmful cuts and other changes from ultimately becoming law.

“The Senate must protect New Jersey women – and all New Jerseyans – by rejecting any bill that causes people to lose coverage, caps or cuts Medicaid, ends the Medicaid expansion or takes away critical protections,” said Jon Whiten, Vice President of New Jersey Policy Perspective. “Failing to meet any of these standards would hurt New Jersey women and families.”

The House-passed bill, which President Trump supports, would slash more than $800 billion from Medicaid over ten years by effectively eliminating the Affordable Care Act’s (ACA) expansion of Medicaid to low-income adults and imposing a “per capita cap” on the program. The per capita cap would break the federal government’s decades-long guarantee to pay a fixed share of states’ Medicaid costs.

These cuts would put at risk the critical support Medicaid gives to women throughout their lives:

  • Nearly all women use some form of family planning during their reproductive years, and Medicaid finances 75 percent of all publicly-funded family planning services. The House-passed bill also specifically targets access to women’s health care services by barring states from reimbursing Planned Parenthood for its preventive health and family planning services for women and men enrolled in Medicaid.
  • Medicaid provides health care for nearly half of all pregnant women, supporting them through their pregnancies and ensuring that their babies have a healthy start. In fact, Medicaid financed 28 percent of births in New Jersey in 2010.
  • Because women live longer than men, women are much more likely to use Medicaid’s long-term services and supports as they age. The program also plays an especially critical role for older women of color who are also enrolled in Medicare, covering nearly 40% of Latina and African American women over 65.

“Medicaid plays a vital role in helping meet the unique health care needs of women, who are the primary users of family planning and maternity care and more likely to use long-term services. Under the House bill, many low-income women would struggle to afford the services they and their families need,” said Ray Castro, Director of Health Policy at New Jersey Policy Perspective. “Our Senators need to protect Medicaid – not cut it.”

The House-passed bill also includes several provisions that are especially harmful to women with private insurance. For example, it would allow states to opt out of the ACA’s Essential Health Benefits (EHB) standard, effectively allowing insurers to charge women much more than men by leaving many women without affordable access – or any access – to maternity coverage. It also would give states the option of allowing insurers to charge far higher premiums to people who are pregnant, have had a c-section, or were treated for injuries resulting from domestic violence.

MacArthur & Frelinghuysen Put Politics Over People

Posted on by Raymond Castro

Today Congressmen Frelinghuysen and MacArthur put their political party ahead of the health care of tens of thousands of their own constituents by voting to repeal the Affordable Care Act and replace it with a wholly inadequate substitute that will eviscerate Medicaid, drive up insurance premiums and gut consumer protections for people with pre-existing conditions. Thankfully, they were the lone New Jersey Representatives to do so, with the other 10 members – including fellow Republican Congressmen Lance, LoBiondo and Smith – rightly seeing this legislation for what it is: An attack on the health, well-being and economic security of hundreds of thousands of New Jerseyans.

Despite the doublespeak down in D.C., none of the amendments and last-minute additions – including Rep. MacArthur’s own – made this bill substantively better. And they are all built on a faulty foundation of a proposal that strips health care from 24 million Americans, drives up premiums and shifts costs to the states – all in order to deliver massive tax cuts for the wealthiest families.

What This Means for New Jersey

  1. The Upton Amendment is Not a Solution:

Adding $8 billion over 5 years to help protect Americans with pre-existing conditions comes nowhere close to filling the likely gap created by the MacArthur Amendment.

In fact, it would take up to $790 million each year to assist the New Jerseyans with preexisting conditions who would apply for health coverage (and this is a very conservative estimate). Even if the funds from the Upton amendment are added in, the bill would only allocate about $353 million on average – leaving a $437 million gap in New Jersey, the eleventh highest in the nation.

In total, the nationwide gap is estimated to be $20 billion a year – or $100 billion over the five years that Rep. Upton’s amendment would pledge an additional $8 billion. In other words, the Upton amendment fills just 8 percent of the gap.

Background: https://www.njpp.org/blog/new-jerseyans-with-pre-existing-conditions-remain-at-risk and https://www.americanprogress.org/issues/healthcare/news/2017/05/02/431698/house-health-care-plan-not-enough-keep-high-risk-pools-afloat/ and http://www.cbpp.org/research/health/8-billion-comes-nowhere-close-to-meeting-republican-commitments-to-people-with-pre

  1. The MacArthur Amendment Poses an Even Greater Threat to New Jersey Than Original Repeal Bill:

Rep. MacArthur’s amendment retains all the worst elements of the original plan to repeal, and on top of that eliminates key protections for people with pre-existing health conditions and marks a return to the highly-flawed, discriminatory pre-ACA individual insurance market.

In practice, the amendment means that up to 3.3 million New Jerseyans with preexisting conditions would no longer be guaranteed affordable health coverage if they lose their insurance,  women would likely be charged more than men for insurance, and plans for up to 3.6 million New Jerseyans could once again come with annual and lifetime limits on coverage – violating promises President Trump and many Republican legislators have repeatedly made to maintain these protections.

Background: https://www.njpp.org/healthcare/macarthur-amendment-to-american-health-care-act-would-cause-even-more-harm-to-new-jersey and http://www.cbpp.org/research/health/fact-checking-claims-about-the-macarthur-amendment

  1. The American Health Care Act is a Horrible Deal for New Jersey:

The original proposal to repeal the Affordable Care Act would be extremely harmful to New Jersey.

  • Up to a half million New Jerseyans would lose their health insurance
  • The Medicaid expansion would be phased out, eliminating coverage for 562,000 residents and sharply reduce federal funds for the state’s budget
  • Permanent structural changes to Medicaid would reduce funding to New Jersey by 20 percent, the largest reduction in the nation, putting health care for up to 1.8 million New Jersey seniors, people with disabilities and children at grave risk.
  • Approximately 250,000 New Jerseyans who purchase insurance through the Marketplace would see an average increase in out-of-pocket health are costs of $2,740 a year, making insurance unaffordable for many of them.
  • The state’s alarming gap between the wealthiest and the rest of us would increase, thanks to big tax cuts for the top 5 percent of New Jersey households. The wealthiest 1 percent of households would get an average tax cut of $23,000 a year.
  • The loss of over $30 billion in federal funds over the next decade due to the Medicaid cap alone would lead to the loss of tens of thousands of jobs.

Background: https://www.njpp.org/healthcare/the-american-health-care-act-would-cause-nearly-half-a-million-new-jerseyans-to-lose-health-coverage and http://www.cbpp.org/sites/default/files/atoms/files/4-13-17health-factsheets-nj.pdf

New Jerseyans with Pre-Existing Conditions Remain at Risk

Posted on by Raymond Castro

Today Rep. Fred Upton is reportedly proposing an amendment to Rep. MacArthur’s amendment to the American Health Care Act that would add $8 billion in federal funding, spread over 5 years, to help people with pre-existing medical conditions pay costly premiums in states that waive the current ACA protections for consumers with pre-existing conditions.

While the proposal still prohibits insurers from turning down anyone with a pre-existing condition, the MacArthur amendment gutted that requirement by including waivers that would allow insurers to charge whatever they want based on a person’s health history and to exclude the very benefit a person with pre-existing conditions would need – like high-cost drugs or cancer treatment.

Rep. MacArthur’s main rebuttal has been that insurers wouldn’t charge more for people with pre-existing conditions because high-risk insurance pools would compensate insurers for the higher cost of covering these individuals. Given the failure of high-risk pools in many states – mainly to a lack of sufficient funding – it stands to reason that, without enough money, these pools would once again fail. And sure enough, the MacArthur amendment – even with the Upton amendment – doesn’t include enough money for these pools.

It would take $790 million each year to assist 37,000 New Jerseyans with preexisting conditions who would apply for health coverage, according to a national analysis released earlier this week by the Center for American Progress. However, if even if the funds from the Upton amendment are added in, the bill would only allocate about $353 million on average – leaving a $437 million gap, the eleventh highest in the nation.

In total, the nationwide gap is estimated to be $20 billion a year – or $100 billion over the five years that Rep. Upton’s amendment would pledge an additional $8 billion. In other words, the Upton amendment fills just 8 percent of the gap.

And there are a number of reasons why this gap would likely be even wider. In most estimates there is a margin of error that is often expressed as a range between a lower and upper bound. The Center for American Progress uses the lower bound of 37,000. However, the upper bound estimate could be as high as 256,000.

In addition, the estimate assumes that the Senate would approve these funds when they consider the bill and that each year the funds would not be cut during the budget process, which may not be case at all. And some of the funds allocated in the bill for the pools still require a state match, which New Jersey may not be able to afford given its dire fiscal condition.

MacArthur Amendment to American Health Care Act Would Cause Even More Harm to New Jersey

Posted on by Raymond Castro

To read a PDF version of this report, click here.

Rep. Tom MacArthur of New Jersey’s 3rd Congressional District – the only member of the state’s Congressional delegation who supported the first iteration of the American Health Care Act – has now resurrected the bill with a new amendment that retains all the worst elements of the original plan to repeal and replace the Affordable Care Act and sharply reduces protections for pre-existing conditions and other health benefits.[1]

New Jersey Still Harmed Much More Than Most Other States

Because the MacArthur amendment leaves most of the previous bill intact, in New Jersey the proposal would still cause:

  • About a half million New Jerseyans to lose their health insurance[2]
  • The phase-out of the Medicaid expansion, which would eliminate coverage for 562,000 residents and sharply reduce federal funds for the state’s budget
  • Reduced health care for up to 1.8 million New Jersey seniors, people with disabilities and children due to a permanent cap on federal Medicaid funds that would reduce funding to New Jersey by 20 percent, the largest reduction in the nation
  • An average $2,740 increase in out-of-pocket health care costs for 250,000 residents who have purchased insurance through the Marketplace, which would end coverage for many of them[3]
  • Increased income inequality due to major tax cuts for 164,000 of New Jersey’s highest income households, including millionaire and billionaire residents
  • The loss of tens of thousands of jobs with the loss of over $30 billion in federal funds over ten years
  • A major financial threat to New Jersey’s hospitals

Amendment Also Guts Protections for Pre-Existing Conditions

The MacArthur amendment to the bill poses an even greater threat to New Jersey because it eliminates key protections for people with pre-existing health conditions and marks a return to the highly-flawed, discriminatory pre-ACA individual insurance market.

In practice, the amendment means that millions of people with pre-existing conditions could no longer afford coverage, women would likely be charged more than men for insurance, and plans could once again come with annual and lifetime limits on coverage – violating promises President Trump and many Republican legislators have repeatedly made to maintain these protections.

In New Jersey, there are an estimated 3.8 million non-elderly residents with pre-existing conditions. These New Jerseyans are found throughout the state, with hundreds of thousands in every Congressional District – including 307,100 in Rep. MacArthur’s district alone. In fact, a slightly higher share of Garden State residents in districts with Republican representatives (52.4 percent) have pre-existing health conditions than residents in districts with Democratic representatives (51.1 percent).[4]

Of these 3.8 million New Jerseyans, nearly half a million (476,800) are children – that means about one of every four Garden State kids (24 percent) have a pre-existing condition.CD table preexisting conditionsv2-01

High-Risk Pools Haven’t Worked in New Jersey or Other States

Dropping these protections for people with pre-existing conditions would lead to exorbitant premium increases for many New Jerseyans. The MacArthur amendment proposes the establishment of a federal or state high-risk insurance pools – which combine the sickest people and provide a public subsidy to the insurer to partially reduce cost sharing – to address this problem. But in reality, these pools would do little to help.

The experience of many states shows that these pools frequently do not work, and often allow the sickest people to fall through the cracks. These pools have come with enrollment caps, long waiting lists, unaffordable premiums, exclusions for pre-existing conditions, high deductibles, benefit caps and annual and lifetime limits on coverage. Moreover, they covered only several hundred thousand people nationwide and weren’t sustainable over time because they pooled sick people with even sicker people.[5]

High-risk insurance pools haven’t worked in New Jersey, either. In the first year of the ACA, the state created a pool (called NJ Protect) with the help of a $140 million federal grant. In the end, the pool ended up enrolling less than half of one percent of New Jerseyans who were estimated to be eligible (1,500 of 256,000 New Jerseyans)[6].

And high-risk pools aren’t even intended to help people with many of the most common pre-existing conditions like asthma, hypertension, or depression. These New Jerseyans would be left to navigate the individual market, where insurers could once again charge them higher premiums, offer them subpar coverage or some combination.

Amendment Also Allows Waivers That Could Harm Millions

The other dangerous changes the MacArthur amendment makes are through the state waivers process: the proposal would allow states to move forward with potentially damaging waivers with practically no oversight. In fact, states would receive automatic approvals for these waivers within 90 days, just by attesting that their purpose is to lower premiums, improve coverage levels, or “advance another benefit to the public interest.”

The first type of waiver allowed under the amendment would allow states to opt out of the ACA’s “community rating” requirements – which prevent insurers from charging people higher insurance premiums based on their health – so long as they create or participate in a federal high-risk pool.

This means insurers could once again discriminate against people based on their medical history. Insurers could increase premiums without limits for anyone with a history of cancer, hypertension, asthma, depression or other conditions. While insurers would still be required to offer coverage, the so-called protection would be rendered meaningless since insurers could offer coverage with such arbitrarily high premiums that the effect would be to deny coverage outright.

The amendment would also allow states to waive the ACA’s “Essential Health Benefits” requirement that requires individual and small group market health plans to cover essential services like inpatient, outpatient and maternity care, prescription drugs, mental health and substance abuse treatment.

The result would be to effectively end protections for those with pre-existing conditions by allowing insurers to drop coverage for everything from cancer treatment to high-cost drugs. This would discourage more sickly persons with high-cost health problems from enrolling. So the more than 130 million Americans – including nearly 4 million New Jerseyans – with pre-existing conditions often wouldn’t be able to find individual market coverage that covers their needs at any price, much less an affordable one.[7]

On top of that, waiving Essential Health Benefits would mean:

  • Women could again be charged more for coverage than men. While proponents claim that the MacArthur Amendment preserves the ACA’s ban on gender discrimination, eliminating Essential Health Benefit requirements means that women would have to pay more for plans that include maternity care and other key services – if they could find plans with those benefits at any price.
  • Plans could impose annual and lifetime limits on coverage – including for people who get health coverage through their jobs. The ACA prohibits plans from imposing annual or lifetime limits on coverage – but only on coverage for Essential Health Benefits. Plans can still impose annual or lifetime limits on services not classified as essential. If states are allowed to eliminate Essential Health Benefits standards, plans could once again impose coverage limits on anything from emergency services to inpatient care to prescription drugs.[8] This would also effectively end the ACA’s cap on annual out-of-pocket costs, as that limit is based on the services that are covered by the plan.

Before the ACA, 3.3 million New Jerseyans with private health insurance – most of whom had employer-based plans – had policies that imposed lifetime limits on coverage. Repealing Essential Health Benefit requirements could mean going back to a time when millions of people with health coverage were one major illness away from medical bankruptcy.

Amendment Offers No Protections for People with Pre-Existing Conditions, Just Smoke and Mirrors

Despite Rep. MacArthur’s claim that his amendment maintains some protections for people with pre-existing conditions,[9] in practice it clearly doesn’t.

  • Exorbitant premiums and coverage exclusions are no different than coverage denials. While insurers wouldn’t be allowed to deny coverage altogether to people with pre-existing conditions, they could offer plans that charge premiums of tens of thousands dollars per month and offer no coverage for hospitalizations, prescription drugs or various other basic health services.
  • Pre-existing condition protections would once again rely entirely on state options. While states could keep or impose protections if they choose, they have always had this option – but few exercised it prior to the ACA. And many states are likely to opt out if they can. Since the AHCA would sharply increase consumer costs by eliminating the individual mandate and slashing subsidies, states would be under substantial pressure to seek waivers.
  • High-risk pools are an inadequate substitute. High-risk pools have not worked in the past, and don’t even apply to people with the most common kinds of pre-existing conditions.

Endnotes

[1] The following is a summary of the amendment as reported by Politico: http://www.politico.com/f/?id=0000015b-8ab0-df96-a9db-dff115c30001

[2] New Jersey Policy Perspective, The ‘American Health Care Act’ Would Cause Nearly Half a Million New Jerseyans to Lose Health Coverage, March 2017.

[3] Center on Budget and Policy Priorities, House Republican Health Plan Would Mean More Uninsured, Costlier Coverage in New Jersey, April 2017.

[4] Center for American Progress, Number of Americans with Pre-Existing Conditions by Congressional District, April 2017.

[5] Kaiser Family Foundation, High-Risk Pools as Fallback for High-Cost Patients Require New Rules, January 2017.

[6] Rutgers Center for State Health Policy, Data for Planning a Temporary High Risk Health Insurance Pool In New Jersey, May 2010.

[7] Center on Budget and Policy Priorities, If “Essential Health Benefits” Standards Are Repealed, Health Plans Would Cover Little, March 2017.

[8] Brookings Institution, New Changes to Essential Benefits in GOP Health Bill Could Jeopardize Protections Against Catastrophic Costs, Even for People with Job-Based Coverage, March 2017.

[9] Rep. Tom MacArthur, About the MacArthur Amendment, April 2017.

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