Here & Now

Health Care Expert On How Senate Bill May Impact Wisconsin

Frederica Freyberg:

Our first look this week centers on healthcare. After months of speculation and controversy U.S. Senate Republicans unveiled their healthcare bill on Thursday. The goal, to bring down insurance costs by repealing and replacing major portions of the Affordable Care Act. The proposed Senate Republican health plan would repeal Obamacare taxes, roll back and eventually eliminate expanded Medicaid. Base tax credits to help pay for insurance on income and age. It eliminates the individual and employer mandate to have insurance. And cuts funding for Planned Parenthood for one year. Four Republican Senators say they are not ready to vote for the healthcare bill including Senator Ron Johnson of Wisconsin. In a joint statement, the four senators said the measure fails to quote, repeal Obamacare and lower healthcare costs. And Wisconsin’s Democratic Senator, Tammy Baldwin, also opposes the plan saying, quote, it will make families pay more for less care and increase the number of people who are uninsured. GOP leaders hope to vote on the bill next week and can afford only two no votes. Just this week, Health Tradition Health Plan, which serves 14 Wisconsin counties and Anthem Blue Cross-Blue Shield announced the volatile marketplace is forcing them to pull out of the federal healthcare exchange. The Anthem move impacts 14,000 Wisconsin families. Donna Friedsam is an expert on the implementation of federal healthcare reform along with financing coverage and access. Thanks for being here.

Donna Friedsam:

Pleased to be here.

Frederica Freyberg:

We wanted to ask you right out of the shoots as you might expect who are the winners and losers in this Senate Republican bill?

Donna Friedsam:

There has been a lot written about the reduction in the tax credits for lower income people and the tax cuts for the funding of the bill. So there will be some degree of redistribution of funding. And people with higher incomes will have some benefit. And lower income people will have some reduction and support through this bill. I think several analysts have said that. Generally, I don’t like to think of it about individual winners and losers but rather look at it in a way of how is it going to benefit our state and the goals that all of us share? The goals that I think most people share are how is it going to affect the price of health insurance broadly, the way we get health insurance. How it’s going to affect our health and our economy. And by those measures we can judge this bill and consider whether we think it’s going to be beneficial for us.

Frederica Freyberg:

What do you think?

Donna Friedsam:

So at this point what it looks like is that the price — the premiums for health insurance will likely rise for many people. But for some small group of the population they might see lower premiums and that includes younger, healthier people. While they might see lower premiums, they will probably see higher deductibles. And that is because the value of the insurance, the amount of benefits the insurance covers will be lower. But the premiums will likely go down for younger, healthier people. And hopefully that would bring more younger, healthier people into the market. The theory being that if younger, healthier people come into the market that could bring down underlying premiums for everybody.

Frederica Freyberg:

That’s been the theory. That was the theory in the Affordable Care Act, hence some of those mandates to have insurance. But those are gone now. You think that simply lower cost for premiums will inject the market with those healthy people?

Donna Friedsam:

Well, a lot of people are — have been writing in the last — we’ve had 24 hours or 36 hours now to think about this bill and one of the concerns is that it eliminates the mandate for coverage. But it does not replace it with any other kind of particular incentive to make sure that people who are not sick or older get that coverage. The only thing there is an expectation that they will be enticed by lower premiums. If there is not any particular definite incentive, there is a very strong concern that young, healthy people will look at it and say why should I buy insurance?

Frederica Freyberg:

Why do premiums go up for other than young and healthy?

Donna Friedsam:

Why do they go up? Because their coverage–they need more services and they need to access more services so they need more benefits covered and that costs the insurance company more.

Frederica Freyberg:

Let's talk about Medicaid. That’s another really big item. The expansion is more slowly phased out than in the House bill under this Senate bill. But then my understanding is those Medicaid funding is cut deeper in the Senate bill. Senator Ron Johnson, though, says that this is not, in fact, a cut to Medicaid. It is just putting the brakes on growth. What are the implications for Medicaid in Wisconsin?

Donna Friedsam:

I would say from my perspective that this bill that we have from the Senate is more of a repeal and replace of Medicaid than it is of Obamacare, frankly. It radically changes the way Medicaid has been operating for its 50 years as a safety net in this country. It does significantly reduce the available federal funding by 25% or possibly more in the out years. And it brings the responsibility to states to handle whatever reductions in federal funding that we’ll be facing in Wisconsin and in all the states in the out years. And the amount of federal participation will decline more in the out years than the immediate years but it will continue to be increasing pressure on states to reduce or to handle reductions in federal support.

Frederica Freyberg:

I know the CBO has not scored this yet but do experts like yourself have a handle as to how many people might lose health coverage under this kind of Senate Republican bill?

Donna Friedsam:

We have to wait until the CBO weighs in. That should be early next week. We have the CBO score from the House bill. We had additional estimates that came out more recently from the CMS Actuary. The CMS Actuary estimates were actually a little bit lower in terms of loss of coverage. They estimated about 10 million people losing coverage — additional people losing coverage as opposed to 23 million people. But nonetheless I think we are going to see potentially similar losses in coverage. If not that, what I think many people will expect would be an increase in what we would consider to be lower insurance. So people having much lighter coverage.

Frederica Freyberg:

We have just about a minute left and with that I want to ask you about pre-existing conditions. How are those treated under this Senate bill?

Donna Friedsam:

The Senate bill, unlike the House bill, the House bill said states could waive pre-existing protections. The Senate bill says states cannot waive pre-existing conditions. However it allows states to waive the provision for essential health benefits. So basically it says that insurance companies will have to continue to cover people with these high-cost conditions but insurance companies might not have to provide the benefits that the people need in their insurance.

Frederica Freyberg:

Really quickly. Knowing what you know, how do you think Wisconsin might act with any ability like that to get a waiver?

Donna Friedsam:

I think that it’s going to be difficult on the state level to have our state legislature decide to waive the kind of benefits that people have become accustomed to relying upon for their healthcare.

Frederica Freyberg:

All right. Donna Friedsam. Thank you very much.

Donna Friedsam:

Thank you.