Local expert discusses future of ACA

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Insurance under Trump > Sperling discusses possible future impacts to health insurance in NM

By Arin McKenna

Editor’s note: First of a two-part series

During a seminar titled “Health Insurance in New Mexico,” presented to Los Alamos Chamber of Commerce members Nov. 10, Vanguard Resources, Inc. Founder Anne Sperling outlined possible scenarios for the future of the Affordable Care Act (ACA) under President-elect Donald Trump’s administration.
Sperling met with the Los Alamos Monitor after the seminar to discuss some of those issues.
Sperling based her conjectures on her 32-years experience in the insurance industry, on statements Trump made during the 15-month campaign season and on indicators from the Republican Congress.
Sperling does not believe Trump can keep his campaign promise to repeal the ACA in his first 100 days.
“He’s got to come up with 60 votes unless he wants to do something outside of the box, and then he’s got to get 50 votes,” Sperling said.  “So is he going to be able to convince these other senators in the first 100 days that this has to be changed? And his sales of that process has to be ‘the changes I want to make are going to be better.’ I don’t know if he’s going to be a good enough sales guy to do it.”
Sperling also noted that the first 100 days of a new presidency are likely to be “absolutely chaotic” with all the elements that go into a transition of that magnitude.
Sperling believes that President Barack Obama may use executive orders to make some revisions to the ACA (also know as Obamacare) before Trump takes office on Jan. 17, 2017, that could reduce the likelihood of a repeal. Changing some of the employer mandates might be part of that. Revisions could include raising the 30-hour workweek that currently qualifies an employee for insurance to 40 hours or increasing the waiting period beyond 90 days.
“These are the things that have been axes to grind with his (Obama’s) administration since the inception of the law with employers, and employers of all sizes,” Sperling said. “And if he does that, then it’s going to be a little harder for the Republicans to make further changes to the law or repeal it, if President Obama makes some concessions in the law that are more savory to businesses.”
Sperling also pointed out that in its six and a half years of existence, people have grown accustomed to some of the Obamacare benefits and would have a hard time giving them up. Under the old system, consumers could be denied coverage for pre-existing conditions or charged higher rates for medical conditions. The ACA forbids both of those practices.
Since the election, Trump has backpedaled on some of his rhetoric. After meeting with Obama, Trump talked about finding a way to cover pre-existing conditions and allowing young people to stay on their parent’s insurance until age 26, also mandated under the ACA. Sperling talked about how important the 26-year-old rule is.
“In today’s economy, where the jobs have not bounced back, those youngsters are having a hard time coming out of college, finding employers that will hire them full time and getting benefits under that full time employment,” Sperling said. “So the older they get – 26 seems to be a good age – the more likely they’ll find that kind of a job.”
For the industry itself, keeping that age bracket in the system helps keep claims – and rates – down.
“If the parents are still willing to pay for their kiddos, you’re getting the kids into the premium paying system with very few claims. That’s a good thing,” Sperling said, noting that young people are likely to opt out of insurance without that provision. “That would be devastating.”
According to Sperling, if congress repeals the ACA, states would have to re-implement their small group and individual high-risk pools for the uninsured.
“And if that happens, then it’s going to be state-by-state again, and some states won’t do it,” Sperling said.
Sperling also observed that dismantling the ACA would be a monumental task, noting that the infographic of the law looks like a complex electronics game board.
“It’s so interwoven now into the Department of Health, the Department of Labor, the IRS, the Center for Medicare and Medicaid Services. It touches at least a half dozen different federal agencies,” Sperling said.
Sperling used Medicaid as one example of that, noting that millions of Americans now covered under the ACA did so through Medicaid expansion.
Not every state opted into Medicaid expansion, but New Mexico was one of those that did. Initially, the federal government paid the entire cost of that expansion.
“Now the states are having to pay for that Medicaid expansion program and they’re broke, our state included,” Sperling said.
Earlier this year, the New Mexico Human Services Department reported an $85 million shortfall in the state’s obligations to Medicaid, although it was working on a plan to reduce that deficit.
In spite of that, Sperling does not believe New Mexico will opt out of the expanded Medicaid program.
“I have a hard time believing that New Mexico’s going to back off it’s Medicaid expansion program, because it helps our hospitals, it helps the economy, it helps the families,” Sperling said. “There’s a sense of security. There’s a security blanket there that we haven’t had.”
Because of all those threads, Sperling believes it could take a year to dismantle the Medicaid expansion program if the Trump administration decides to do so.
Sperling also addressed the pitfalls of Trump’s declaration that he would allow consumers to purchase insurance across state lines.
“The really smart states and fast states will amend their insurance laws to enable that to happen very quickly,” Sperling said. “States that lag in that decision-making will get hurt terribly. Our state probably will get hurt terribly, because we have issues in our state that make decision-making quite slow.”
For one thing, New Mexico would most likely lose the tax money generated from premium payments if residents begin purchasing insurance from other states.
“Premium tax is a tremendous moneymaker in our state,” Sperling said.
Sperling also noted that while consumers may be thrilled at the opportunity to purchase lower-cost insurance across state lines, they could suffer also by buying policies not governed by New Mexico state statute. Out-of-sate plans would not have to include mandated care such as chiropractic, acupuncture, nurse midwives, nurse practitioners, diabetic care or treatment for autism spectrum disorder.
“Those practitioners are all in our plans. Do you think they’re in Texas plans?” Sperling asked. “These are all things that are important to our state. Our legislature passed them, and if you go outside the state, you might not get those mandated benefits anymore.
“And people won’t know to ask that question. That’s just inside industry knowledge. A broker will know that, but Joe New Mexico won’t.”
New Mexico networks could also suffer from out-of-state competition, Presbyterian Healthcare Services in particular.
“Their network is just New Mexico. So nobody from another state is going to buy a Presbyterian plan. So they stand to lose a lot,” Sperling said. “But the big ones like Blue Cross and United Healthcare and Cigna, the national players, they’ll survive the cross-state line purchasing because their networks are all across the nation.”
Sperling also spoke about how repealing elements of the law, such as taxes and penalties, could affect the federal budget, what could happen to New Mexico if the federal government stops supporting Healthcare.gov and the impacts of the ACA’s so-called “Cadillac tax.” Follow the Los Alamos Monitor for more about those issues.