Maine health insurance premiums could rise without ACA subsidies

Monthly premiums would skyrocket nearly 400 percent if Maine consumers who bought health insurance under the Affordable Care Act lose subsidies that help them afford coverage, according to a new report.

The Kaiser Family Foundation released the analysisahead of an expected U.S. Supreme Court ruling later this month that will determine the fate of the federal subsidies, a critical underpinning of the health reform law.

Because of imprecise wording in the ACA, the justices will decide whether the subsidies apply only in states that set up their own insurance marketplaces or, as is the case now, also in states that depend on the federal marketplace.

President Barack Obama’s administration argues Congress intended for the subsidies to be available in all states while the plaintiffs contend shoppers on the federal exchange aren’t entitled to them.

More than half of all states, including Maine, use the federal marketplaceHealthcare.gov.

People who buy their own “individual” health insurance, instead of get coverage through work or the government, can log on to the site to compare and shop for private plans. With this case, their insurance bills hang in the balance.

While most people in Maine don’t use Healthcare.gov, relying instead on plans provided through their jobs or on Medicaid and Medicare, costs for everyone will jump if the subsidies vanish, some experts say.

About 61,000 Maine residents — or nearly 90 percent of those who enrolled through Healthcare.gov — rely on the subsidies granted to individuals and families with low to moderate incomes.

Their premiums would shoot up 383 percent without the subsidies, the fourth highest percentage increase among the 34 states using Healthcare.gov, Kaiser found.

The average premium in Maine with a subsidy was $88 this year, according to Kaiser. If the Supreme Court rules against the subsides, premiums for Mainers with Healthcare.gov plans would jump to $425 per month, based on Kaiser’s analysis. On average, each Maine enrollee was awarded $337 in tax credits.

“If people lose their subsidies because of this case, it’s going to be devastating in every state that it impacts, but clearly Maine really is at some serious risk,” said Emily Brostek, executive director of Consumers for Affordable Health Care, an Augusta advocacy group that supports the health reform law.

People who can’t get affordable health insurance through their jobs and earn between 100 percent and 400 percent of the federal poverty level — between $23,850 and $95,400 per year for a family of four — are eligible for subsidies.

Nationally, 6.4 million people would lose financial assistance worth $1.7 billion if the court rules against the subsidies, Kaiser found. Enrollees would pay 287 percent more a month on average if they have to shoulder the full cost of coverage.

“This is a problem created by this president and the previous Congress,” Wisconsin Gov. Scott Walker, a likely Republican candidate for president in 2016, said Tuesday, the Washington Post reported. “It’s something that requires a solution at the federal level. States didn’t create this problem, the federal government did. And they should fix it.”

Health policy experts say consumers wouldn’t have to repay any subsidies because the court’s decision won’t be retroactive. But loss of the financial help could make health insurance unaffordable for millions of people.

“What we know is that anything that people have received in tax credits so far, you’re not going to have to pay back,” Brostek said. “What we don’t know is exactly when those subsidies would go away.”

The Urban Institute estimates the number of uninsured Mainers would rise by 50,000 without the subsidies. That would affect even people who buy their own health insurance without subsidies, because premiums would increase if insurers lose young and healthy members who offset the costs for older, sicker members, experts say.

Hospitals also would be left scrambling to cover the costs of caring for more patients who can’t pay their medical bills, jacking up overall health spending, researchers have found. That strain on the health care system ultimately raises costs for everyone, experts say.

In Maine, hospitals would be forced to absorb nearly $146 million in costs to treat patients without insurance, the Urban Institute found in another study. Much of that would result from uninsured patients turning up in costly emergency rooms.

Maine Attorney General Janet Mills has urged the Supreme Court to uphold the subsidies. A ruling in the case, King v. Burwell, is expected in late June.

Maine lawmakers are bracing for the ruling to go either way, advancing a failsafe measure that would leave the subsidies in the pockets of consumers who buy individual insurance. The bill, sponsored by Rep. Linda Sanborn, D-Gorham, technically would set up a state marketplace to satisfy the legal requirements but still rely on Healthcare.gov and the federal government’s call center.

The measure has attracted bipartisan support, winning unanimous backing by the Legislature’s insurance committee May 14.

Alyce Ornella of Harpswell told the committee the subsidies spared her family more than $100,000 in medical bills after her infant son, Sam, was rushed into surgery after his birth in February. Doctors discovered several rare congenital birth defects, repairing Sam’s esophagus and developing a plan to treat his kidney and heart defects, she said.

“We never expected such financially devastating medical costs,” Ornella said, according to her testimony. “Thankfully, our baby is doing well precisely because we were finally able to get insurance through the ACA and premium tax credits. Our family is not shackled by hundreds of thousands of dollars in medical bills, and our child will not go without treatment he needs.”

The bill is expected to move to the House in the next few days. If the Supreme Court rules in favor of the subsidies, the legislation would be repealed.

In addition to offsetting premiums with tax credits, the health reform law also helps qualifying consumers to pay for out-of-pocket costs, such as co-pays. Those discounts won’t be affected by the court’s ruling.

The Kaiser Family Foundation based its report on new enrollment data released Tuesday by the U.S. Department of Health and Human Services. The data show how many Americans not only signed up for insurance under the ACA for 2015 but also paid their first premium.

Earlier HHS data showed that 75,000 Maine residents signed up for health insurance through Healthcare.gov. After the government followed up to see how many paid their first premium, that number dropped by nearly 10 percent to 68,000.

“We need to understand that more. … We’re slowly getting a better picture of how many people are actually enrolled in plans,” Brostek said.

ACA 201

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A one-year checkup on how the ACA is doing in Maine and a subsidy calculator can be found at SunJournal.com/ACA201

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Today, a year after it started offering health insurance from its Lewiston headquarters in the Bates Mill, Maine Community Health Options has more than 40,000 members.

Profiles of Mainers who bought health insurance through the ACA marketplace:

You’ve seen how the Affordable Care Act affected other Mainers in 2014. How about you? Good, bad or neutral — share your ACA stories.

Resources:

Affordable Care Act 101: We break down the ACA, what it does and what it requires you to do.

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