How to fix the health law (it’s tricky but not impossible)

Republicans have failed to repeal and replace the Affordable Care Act. Now, can it be repaired?

The 7-year-old law has survived Supreme Court decisions and aggressive attempts to extinguish it by Republicans in Congress and the White House. But even people who rely on its coverage agree that it still has big problems. The question for the roughly 20 million Americans who buy their own health coverage — and for millions of others who remain uninsured — is what can realistically be done to address their main concerns: high prices and lack of choice in many parts of the country.

"Everyone feels really scrunched by the prices we're paying, and we have no options in Iowa," said Catalina Ressler, 39, a psychologist outside Des Moines who pays $1,567 in monthly premiums. "Next year is going to be even worse."

Ressler's plan, which covers her family of four, also comes with a $7,000 deductible. Their insurer, Wellmark Blue Cross and Blue Shield, is pulling out of the Affordable Care Act marketplace in Iowa next year, leaving just one company, Medica, to possibly remain.

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Citing the protracted uncertainty over the law's future, many insurers have proposed big rate increases again for next year even though many are no longer incurring big losses in its marketplaces. People covered by one insurer in Maryland could see premiums rise by more than 50 percent if proposed rate increases go into effect, and premiums for plans in Virginia and Connecticut could increase more than 30 percent. In North Carolina, where rates are already among the nation's highest, Blue Cross and Blue Shield of North Carolina wants an increase of nearly 23 percent but said it would have sought less than half that amount under more predictable circumstances.

Cost is irrelevant in several dozen counties in Indiana, Nevada and Ohio; not a single insurer has agreed to sell plans through the Affordable Care Act marketplaces there next year, potentially leaving thousands of customers with no coverage option.

Among the hardest hit are those who do not qualify for subsidies to help with premiums or out-of-pocket costs, which rise along with rate increases.

Michael Lawson, an independent consultant for local governments in Washington, D.C., said the monthly premiums for his basic plan from CareFirst jumped to $527 this year from $290 last year. He is 60 and earns too much to get a subsidy, but because of various health problems he has already reached his $5,000 deductible for the year. He likes his plan but thinks that to keep rates more stable, Congress and the Trump administration need to do a better job of enforcing the law, particularly its requirement that most people have health insurance.

"They need to enforce the ACA as it's written," he said. "Don't kill it by benign or even malicious neglect."

The politics are exceedingly tricky in a divided and dysfunctional Washington, but economists, insurers, doctors and health policy experts across the political spectrum agree that immediately addressing three or four basic shortcomings in the existing system would go a long way toward making the law more effective and financially stable.

Stabilize the markets

There is widespread agreement that the first order of business is to calm what are now very jittery insurance markets. "You need to stabilize things before we change them," said Michael Neidorff, the chief executive of Centene, one of the few insurers that are aggressively expanding in the market.

Time is of the essence: Next month, insurers must decide what they charge for 2018 or whether they want to stay in the marketplaces at all.

The most significant step would be to guarantee continued funding to reimburse insurers for waiving deductibles and co-payments for low-income customers, as the health law requires companies to do. The Trump administration has threatened to stop making the payments; insurers are now getting them on a month-to-month basis.

If these cost-sharing reductions are not paid for the remainder of the year or in future years, people will see premiums go up by nearly 20 percent to cover them, according to the Kaiser Family Foundation.

Companies could also decide to leave the market, creating a potential collapse, said Mike Kreidler, the insurance regulator for Washington state. In a statement issued Friday, state regulators urged lawmakers to move quickly. "We have insurers who are very apprehensive and very nervous," he said.

[Uncertainty looms ahead for GOP effort to repeal and replace Affordable Care Act]

While insurers are hopeful that Congress will pass legislation guaranteeing the payments, they would also welcome a commitment from the administration that it, too, wanted to stabilize the market. "There seems to be a conflict internally: Are they going to sabotage the market or are they going to help the market?" said Gary Cohen, a former Obama administration official who is now an executive at Blue Shield of California.

President Donald Trump has hinted he is unwilling to help. His Twitter post on Friday reacting to the Senate vote, like others he has posted recently, suggested a willingness to watch the market collapse: "As I said from the beginning, let ObamaCare implode, then deal." In another post on Saturday, he warned that bailouts "for insurance companies" could "end very soon."

But the fundamental problem that many insurance customers face is sky-high deductibles or premiums that are simply out of reach. Health economists and others say there are ways to lower premiums so more people can afford coverage.

"One of the best quick fixes that is not controversial is reinsurance," said Paul Ginsburg, a health economist who directs the Center for Health Policy at the Brookings Institution. That would involve the government helping insurers pay for the sickest, most expensive people, whose costs can drive up premiums in places where there are not enough healthy customers to balance them out.

The Affordable Care Act provided the funding for three years, but many people think reinsurance needs to be permanent. A bipartisan agreement seems possible now because in their failed replacement bills, both House and Senate Republicans had supported the idea of providing assistance to insurers, as well as extra "stabilization" funding for states to potentially help lower people's premiums and deductibles.

Over the longer term, lawmakers need to find a way to encourage more people, especially those who are healthier, to enroll, said Dr. Martin Hickey, the chief executive of New Mexico Health Connections, one of the few remaining startup insurers created by the law. He said he was proposing rate increases of anywhere from 20 to 25 percent, although they were proposed before the Senate bill failed.

"The pool needs to get stabilized or otherwise we will see year after year of double-digit increases," he said.

Reduce drug prices

Mark Dalessandro, an adjunct professor at a community college in Tucson, Arizona, saw his out-of-pocket expenses for the asthma medication Advair jump to $292 per month this year from $50 per month last year, after he was forced to switch plans because his insurer, Blue Cross Blue Shield of Arizona, left the market in his area. He said he had little choice but to pay for it. "For just a month's supply, for something that helps me breathe, what are you going to do?" he said.

Dalessandro, 54, pays $405 per month in out-of-pocket costs to cover everything from the Advair to cholesterol drugs. That is on top of the $1,462 he pays in monthly premiums for coverage for himself, his wife and his two teenage children.

The fluctuating drug cost makes him feel as if he were on a "roller coaster," he said. "You just kind of feel like you can't get ahead of the game."

If there is one health care issue that both Republicans and Democrats have vowed to fix, it is the rising cost of prescription drugs. During the presidential campaign, Hillary Clinton and Trump railed against outrageous prices set by pharmaceutical executives like Martin Shkreli and drug companies like Mylan, the maker of the EpiPen.

But there is little agreement on the best way to fix the problem. Democratic proposals, such as allowing Medicare to directly negotiate drug prices with pharmaceutical companies and allowing cheaper drugs to be imported from overseas, are fiercely opposed by the drug industry — a potent lobbying power in Washington — as well as Republicans in Congress.

And though Trump has excoriated the industry, his administration has not yet put forward a plan to address the issue. A draft executive order on drug prices obtained by The New York Times in June revealed a far more industry-friendly approach, easing regulations in the hopes the drug companies would lower prices on their own.

Democratic leaders in Congress identified rising drug prices as one of their economic priorities in a new campaign, "A Better Deal," that was made public this past week. Under their plan, a new federal agency would take action against companies that engaged in egregious "price gouging," Medicare would be allowed to directly negotiate the price of drugs for seniors, and companies that raised their prices significantly would have to warn the federal government in advance, as well as give a reason for their planned price hike.

That is not to say the parties have not found some areas of agreement. There is bipartisan support for measures that would speed more generic drugs to market, including a proposal that would crack down on brand-name manufacturers that bar generic companies from gaining access to the samples they need to make copycat versions. And Dr. Scott Gottlieb, the new commissioner of the Food and Drug Administration, is taking steps to encourage more competition among generic manufacturers.

Expand access for the poor

Although the Affordable Care Act has greatly expanded access to coverage — the nation's uninsured rate fell to 10.9 percent last year, according to Gallup, from 17.1 percent in late 2013 — many Americans remain shut out. One of the biggest reasons is the refusal of 19 states to expand Medicaid to virtually all low-income citizens, as the law's authors intended. Some may be reconsidering now that repeal of the health law seems unlikely.

The Supreme Court ruled in 2012 that it was unconstitutional to require states to expand the program, leaving it to each governor and legislature to decide. As a result, more than 2.6 million of the nation's poorest citizens remain in a coverage gap: They cannot qualify for Medicaid, but because the law was written with the assumption that they would all get it under a national expansion of the program, they are not eligible for subsidies to help them buy private coverage.

About half these people are black and Hispanic, according to the Kaiser Family Foundation; about two-thirds live in Florida, Georgia, North Carolina and Texas.

In Alabama, Lee Thrasher, 40, is wedged firmly in the gap. She and her husband, Brandon, have been uninsured since 2011, when he had to quit his job at a Lowe's because of a degenerative spine disease. Thrasher works independently as an inspector for property insurance companies and cannot get insurance through her job. Her two children get coverage through Medicaid, but with an income of about $18,000 a year, she and her husband make too much to qualify. If they lived in a state that had expanded the program, they would be covered.

Thrasher said she was supposed to see the doctor for blood work and prescriptions refills at least four times a year but could afford to go only twice, paying a flat fee of $85.

"Sometimes it might as well be $1 million," Thrasher said. "When you're broke, you're broke."

Under the terms of the health law, the federal government covers 95 percent of the cost of expanding Medicaid and will always pay at least 90 percent. But with many state lawmakers anxious about taking on even a small share of the expansion costs, one alternative that could possibly win bipartisan support is extending subsidies for private coverage to people whose income is below the poverty level.

Regardless, some holdout states will most likely reconsider expanding Medicaid with repeal of the Affordable Care Act off the table for now. In Maine, for example, voters will decide whether to do so in a ballot measure this fall. Republican lawmakers in Kansas, North Carolina and South Dakota have also expressed growing interest, partly because many of their hospitals are starving for revenue and have relentlessly pressured them to expand the program. Such pressure is likely to ramp up again now.

In Alabama, though, Thrasher remains pessimistic.

"Alabama sticks to its guns," she said, "even if it's shooting itself in the foot."