Why California’s Past Shows the Danger of #AHCA & the MacArthur Amendment

(From our longtime policy advocate Beth Capell):

As we have listened to people in town halls and legislative hearings about the potential repeal of the Affordable Care Act (ACA), we have been struck time and again by how vividly consumers remember the pre-ACA world. What they say is some version of “I didn’t have the health care and then the ACA came and now I do.” Then out pour the stories of their need for care and their abject fear that they will die or be homeless if they become uninsured again as a result of what is going on in Washington, D.C.

We remember the world before the ACA as well. And if, under the House Republican plan, consumers are forced to pay thousands of dollars more for premiums, an average of $4,000 more a year according to a new California-specific analysis by the Center for Budget Policy and Priorities, the pressure to move to skimpier, even skeletal benefits will be enormous.

This is why the #AHCA is so bad for California, and worse with the new MacArthur amendments that eliminates the federal guarantee for essential benefits and protections for people not to be charged more for pre-existing conditions. California policymakers and advocates will once again hear what we heard year after year before the passage of the ACA: some coverage is better than no coverage, more limited benefits are better than nothing. That’s wrong—and for us, as for other Californians, the world before the ACA was a lived reality, not a mere theory.

The Sad Story of Maternity Coverage

Pre-ACA, in the space of five years, the California individual insurance market flipped from 80% of the market providing maternity coverage to 12%–and in a version of an insurance market death spiral, maternity coverage was virtually unavailable at any price in many areas. During those years, as the shift happened, we time and again supported legislation to require maternity coverage for the entire individual market.

Prenatal care is cost-effective: it means healthier moms and healthier babies for a lifetime. It reduces maternal mortality (yes, that means fewer pregnant women die). Despite the overwhelming evidence of the benefits of prenatal care, because a segment of the California individual insurance market did not require maternity coverage so premiums were lower for that coverage, the market flipped from covering prenatal care to excluding it.

We tried year after year to require maternity coverage and failed each time: SB897 (Speier) of 2003, SB1555 (Speier) of 2004, AB1962 (De La Torre) of 2008, AB98 (De La Torre) of 2009 and AB1825 (De La Torre) of 2011. At least one of these bills was co-sponsored by Kaiser Permanente, they failed under both Democratic Governor Gray Davis and Republican Governor Arnold Schwarzenegger.

From Schwarzenegger’s veto message on the 2011 maternity bill:  “This bill represents a one-sided solution that hurts many hard-working Californians by increasing costs as well as the number of uninsured. For these reasons, I cannot sign this bill.”

Sadder Yet: “Catastrophic Coverage” that Covered Nothing

And it was not just that maternity care was not covered: in California it was legal to sell “major medical” coverage that covered limited hospital stays, limited doctor visits and limited formularies.

Susan Braig of Altadena found out how skimpy such coverage was. When she turned 50, she bought what she thought was “catastrophic” coverage—and then she was diagnosed with breast cancer. Her Anthem policy did not cover her lumpectomy because it was done on an outpatient basis, it did not cover her chemo because that exceeded the two doctor visits that were covered, it did not cover her follow-up mammograms or her drugs or anything else. And here’s the real kicker: because of the pre-existing condition, she could not change coverage so she was stuck. (Today she is grateful for her Medicare.)

The drug formularies for such coverage were so limited that only five or ten generic drugs were covered—not the hundreds that are on a comprehensive formulary—and no brand name or specialty drugs were covered at all.

In case you are wondering, on the day the Affordable Care Act passed, an Anthem Blue Cross lobbyist told us that they had sold this type of inadequate coverage to more than 800,000 Californians. And they weren’t the only insurer selling this substandard skeletal coverage.  When the opponents of the ACA talk about “affordable” coverage and lower subsidies, we think about Susan Braig.

Even Worse: No Mental Health, No Substance Abuse Treatment 

Today we sit in the midst of the opioid epidemic. Last week, five people died in Sonoma County alone from that epidemic. And yet before the ACA, mental health care and substance abuse treatment were treated as luxuries, not basic benefits. And if coverage only includes limited hospital days, limited doctor visits and a limited generic-only formulary, then how on earth would someone have care comprehensive enough to allow them to recover from an opioid addiction? They would not. More people would die.

And it is not just the opioid epidemic. Before the ACA, coverage for clinical depression was limited as well. Yet clinical depression is co-morbid with other chronic conditions, like asthma and diabetes and heart disease—and makes managing those conditions much harder. Think about it: someone has diabetes, they goof on managing their diet or exercise or meds, berate themselves, fall further away from their care management plan and end up the emergency room again and again. How is that good care? How does that help them to succeed?

We here at Health Access California won’t speculate about what might happen in other states if the AHCA is adopted with the new amendments allowing state waivers of essential health benefits (EHBs) and pricing based on health status. But we know from experience what happened in California before the ACA: maternity coverage was virtually unavailable at any price, “major medical” coverage meant skeleton benefits, and people went without necessary behavioral health care. If premiums climb by thousands of dollars, insurers will say premiums could be cheaper if only coverage did not cover the care people need.

What should health insurance cover?

In 2005-07, Health Access participated in opinion research in preparation for what became the California effort at health reform in 2007-08. In several dozen focus groups, we asked consumers “what should health insurance cover”? Almost without exception, men and women, Republicans, independents and Democrats, everyone had virtually the same answer. Health insurance should cover doctors, hospitals, prescription drugs, and preventive care and the benefits that make all that work  such as lab tests and imaging. The essential health benefits cover the benefits that consumers think of as basic benefits. Going back to a world of “gotcha” fine print in which health insurance sold in the individual market looks more like Swiss cheese than real coverage is going back to a very bad world that we lived through and never want to see again. And from what we have seen in the dozens of town halls, multiple state legislative hearings, and other settings, most Americans still share these views on what real health insurance is.

Beware #AHCA or any plan that supposedly seeks to secure coverage or make it more affordable–and then allows waivers, exceptions, and loopholes to the very definition of what “coverage” is.