Value-Based Care News

AMA: Fix ACA Premium Tax Credits and CSR to Cover Uninsured

New resolutions from the Annual Meeting of the AMA’s House of Delegates urged improvements on the Affordable Care Act (ACA) targeting premium tax credits.

AMA and ACA, Premium Tax Credits

Source: Xtelligent Healthcare Media

By Kelsey Waddill

The annual meeting of the AMA House of Delegates reaffirmed the organization’s commitment to decreasing the number of uninsured individuals through the Affordable Care Act’s (ACA) premium tax credits.

“Since the ACA was enacted into law in 2010, millions of Americans have gained health insurance. The policy question now is how to improve the law to insure even more,” Barbara L. McAneny, MD, AMA president, stated in a press release. “We need policies to make coverage more affordable for millions of Americans – both in the premiums they pay, as well as their cost-sharing responsibilities.”

To demonstrate the AMA’s commitment, the House of Delegates adopted the following three policies:

  • Increasing the amount of and expanding eligibility for premium tax credits, including removing the “subsidy cliff”

  • Increasing amounts of cost-sharing reductions received by individuals who qualify for them

  • Extending eligibility for cost-sharing reductions beyond 250 percent of the family poverty level.

The policies particularly target the problematic effects of subsidized premium tax credit cut-offs. Under the ACA, middle-income families and individuals who are ineligible for premium subsidies yet cannot afford the lowest-cost ACA compliant premiums in their region oftentimes find themselves uninsured.

The ACA subsidy cliff strongly impacts older, rural Americans whose income is just above the premium subsidy cut-off, according to a recent Kaiser Family Foundation study. The cut-off is at 400 percent of the federal poverty level (FPL) – around $48,560 for an individual and $100,400 for a family of four in 2019 – without any subsidy phaseout between 400 percent and 401 percent.

“In 21 percent of counties, a 40-year-old making $50,000 would have to pay more than 10 percent of their income for the lowest-cost plan in the marketplace,” the report states. “For older people living in very high-premium counties, the affordability gap is much more stark; in the 28 Nebraska counties with the highest premiums, a 60-year-old making $45,000 would pay nothing in monthly premiums and the same person making $50,000 would pay $1,314 (32 percent of income) for the lowest-cost plan.”

On top of the effects of the subsidy cliff, anyone seeking coverage last year faced rising annual premiums, according to the National Conference of State Legislatures (NCSL) website. In 2018, families with employer-based insurance (ESI) saw their annual premium rise five percent (to $19,616) and single individuals with ESI found that their premiums rose three percent (to $6,896), the NCSL states.

ACA plans are projected to see a 6 percent increase due to “the combined effects of the loss of ACA cost-sharing reduction payments, the repeal of the ACA’s individual mandate penalty, and the expansion in the availability of more loosely-regulated plans,” KFF states.

Around 63 percent of enrollees in the ACA marketplace were enrolled in silver plans in 2018, a separate KFF study showed. These will cost around 16 percent more, so that a 40-year-old arranging his coverage through ACA will average $495 per month in 2019, instead of the $427 per month.

The House of Delegates’s handbook demonstrates the AMA’s confidence that “by putting forward the following new proposals to build upon and fix the ACA, as well as reaffirming existing policies adopted by the House of Delegates, the AMA proposal for reform has the potential to make significant strides in covering the remaining uninsured and providing health insurance to millions more Americans.”

The AMA’s decision to support partial preservation of the ACA reinforced their choice to reject Medicare for All.

The organization has stated five reasons why they defend the ACA as opposed to a single-payer system:

  • Fixing the ACA would allow Americans who are satisfied with their insurance to keep it while covering those who are uninsured

  • The law places the power of choosing a health plan in the patient’s hands

  • The law preserves employer-sponsored insurance which Medicare for All would eliminate

  • The law is financially more stable to fund and maintain

  • The law allows providers to be innovative due to the healthy payer mix

The AMA’s vision for healthcare reform has been consistent since their 2016 vision statement,. The document specifies the organization’s commitment to the uninsured and to preserving the coverage of beneficiaries who obtained coverage under ACA.

The organization also promises to “advance initiatives that enhance practice efficiency and professional satisfaction, improve the delivery of health care, decrease administrative burdens of public and private insurance programs, and reduce health care spending.”

The Delegates end their summary of the resolutions by emphasizing that “importantly, the AMA proposal for reform provides a strong policy foundation to use in evaluating health reform proposals as they are introduced in the coming years, regardless of whether they are tied to the ACA.”