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Massachusetts health care — wonky, with a healthy dose of reality

If Obamacare is Repealed, Can We Just Go Back To Romneycare?

If Obamacare is Repealed, Can We Just Go Back To Romneycare?

January 3, 2017

Massachusetts pioneered health reform when we passed our “Chapter 58” law under Governor Mitt Romney in 2006. The result was a dramatic increase in insurance coverage and financial security, as well improvements in overall health, increases in preventive care, and dramatic reductions in racial and ethnic disparities in coverage.  These gains were most significant for the lowest income individuals.

President Obama’s Affordable Care Act (ACA) increased coverage further, and provided additional support to Massachusetts’ health care system. With the looming repeal of the ACA being proposed by President-elect Trump and the Republican Congress, it’s critical to understand how the ACA improved and strengthened Massachusetts health reform, and what the impact of repeal would be on the state.

Massachusetts Uninsurance Rates 2002 - 2015

1. What are the similarities and differences between the ACA and the 2006 Massachusetts Health Reform Law (Chapter 58)?

The success of health reform in Massachusetts provided the template for the Affordable Care Act. Both laws are built upon the same policy blueprint:

  1. Expansion of the MassHealth Medicaid program.
  2. Sliding-scale subsidies to make private coverage affordable for moderate-income people.
  3. Insurance protections that ban insurers from taking into account pre-existing conditions and from gender discrimination and that require all insurance plans to cover a list of essential health care services.
  4. Creation of an insurance exchange (here called the Health Connector) that allows people to easily compare and purchase private coverage plans.   
  5. An individual mandate that requires everyone to have coverage if an affordable plan is available.
  6. An employer responsibility requirement that requires large employers to offer coverage to their workers.

But as a federal law, the ACA in some areas went further and provided more coverage and more protections than the Massachusetts statute. Here are some of the major ways the ACA improved on our reforms:

  1. Medicaid: The federal Medicaid expansion covers more people than the Massachusetts law, allowing many to switch from Connector coverage to more comprehensive MassHealth. Currently, some 300,000 adults are covered by MassHealth due to the ACA’s Medicaid provision.
  2. Subsidies: The federal tax credits provided under the ACA go to families with incomes up to 4 times the federal poverty level, while under Chapter 58 the state provided help to those with incomes up to 3 times the poverty level. In addition the federal tax credits reduced the state cost for providing subsidies through the Connector. Over 190,000 people in Massachusetts receive federal tax credits to help them afford their insurance.
  3. Insurance Protections: The state’s insurance protections could not legally apply to most people with employer-offered coverage, which is under federal jurisdiction. In addition, the ACA includes provisions not in state law, like prohibiting copays and deductibles for preventive care, including reproductive health. These protections affect 2.5 million people with private coverage in Massachusetts.
  4. Employers: The ACA includes a tax credit to help small businesses with the cost of providing health care to their workers.
  5. Medicare: The ACA is closing the Medicare prescription drug “donut hole,” which is saving 83,000 seniors and people with disabilities an annual average of $1,039 in drug costs.

The ACA also included numerous provisions that go beyond coverage, including support for public health prevention programs, community health center grants, patient-focused medical research, workforce training, and increased transparency.

2. If the ACA is repealed, could Massachusetts just go back to the Romney-era plan established under Chapter 58?

While it depends on the precise legislative details and the timing of any repeal law, repeal of the ACA would likely result in a substantial reversal of the gains we have made due to the federal law. Moreover, it would probably be very difficult to even go back to where we were before.

First, the original Connector insurance subsidies and Medicaid expansion under Chapter 58 were substantially funded by the federal government, using special Medicaid funds authorized under a waiver negotiated with Washington. Federal policymakers encouraged Massachusetts to pilot our unique health policies, and they provided funding to test our approach. Last November, the waiver was renewed for another 5 years. But it includes provisions allowing the incoming Trump administration to alter its terms. Trump and Republican congressional leaders are planning to greatly reduce Medicaid spending in addition to repealing the ACA. With much tighter budgets, it is very doubtful that they would allow Massachusetts to continue operating its own version of Obamacare using federal Medicaid funds.

Second, Republican Congressional leaders have said that their repeal law might prohibit states from enacting the strong insurance protections required as part of the ACA. Also, their proposal would likely allow for the sale of insurance across state lines, meaning out-of-state insurance could be offered that wouldn’t have to comply with our standards.  In any case, under federal law, states cannot regulate coverage offered by self-insuring employers. Thus Massachusetts could not regulate coverage offered to workers in those employer plans.

Bottom Line: Repeal of the ACA would be very damaging to health care in Massachusetts.

                                                                                                                                                                     -- Brian Rosman