AHCA concerns Alabama health care providers, advocates

May 06--The worst-case scenario could be dire.

Under the health care law approved by the U.S. House of Representatives Thursday, Alabama officials could get a waiver that would allow insurers to increase the costs of covering arthritis, cancer, pregnancy or other health statuses considered pre-existing conditions, possibly to the point of making such coverage unaffordable.

The state could also define what those plans must cover, which could lead to services like maternity care and prescription drugs left out.

The state's Medicaid program, covering 1 million Alabamians, would see cuts to federal funding. In rural areas of the state, pediatricians could close their doors and rural hospitals could see major squeezes. State officials could change eligibility requirements for Medicaid, costing people coverage.

Those are some of the changes health care providers and advocates fear could take place in Alabama under the American Health Care Act (AHCA), narrowly passed by the U.S. House of Representatives Thursday with the near-unanimous support of Alabama's House delegation. All six Republicans voted for it; Rep. Terri Sewell, D-Birmingham, voted against it.

Republicans have prioritized the repeal of the Affordable Care Act (ACA), also known as Obamacare, citing concerns about regulations and taxes used in the law.

"That's why we are repealing this failed law and replacing it with a patient-centered system that lowers costs, increases choices, and isn't run by the government," U.S. Rep. Martha Roby, R-Montgomery, said in a statement after her vote for the AHCA.

In his statement on the vote, U.S. Rep. Mike Rogers, R-Anniston, said the ACA "created an unworkable regulatory environment for doctors and hospitals, and small businesses were crippled by increased regulations and taxes."

"It's very simple to understand -- Obamacare didn't work, and it wasn't going to get better," the statement said.

Health care providers and advocates in Alabama Friday disagreed with Rogers' characterization of the ACA. But they raised alarms about the AHCA, saying it could raise costs and limit access to care, particularly in rural areas.

"Alabama's a big loser under this plan," said Jim Carnes, policy director for Alabama Arise, which works on health care and poverty issues. "We know from experience when given options on health coverage and health policy, Alabama always chooses the least and worst."

The bill will likely go through changes in the U.S. Senate. Former Gov. Robert Bentley endorsed an earlier version of the legislation, but Eileen Jones, a spokeswoman for Gov. Kay Ivey, wrote in an email Friday morning Ivey was still catching up on state issues.

"She is in the process now of becoming more familiar with the contents of the health care bill and understanding its impact on the state of Alabama," the email said.

ACA vs. AHCA

ACA insures 12 million people nationwide, while an expansion of Medicaid offered under the law insures millions more. AHCA's impact on those numbers is not clear. The Republican-led House passed the legislation before the Congressional Budget Office (CBO) could estimate the effects. The CBO said the earlier version embraced by Bentley would result in 24 million more people becoming uninsured by 2026.

The ACA requires insurers to offer a range of essential benefits in individual plans, and limits to charges individuals face. Those who make up to 400 percent of the poverty level -- $47,500 for an individual; $84,650 for a family of three -- can qualify for a sliding scale of subsidies to help pay for the insurance.

According to the U.S. Department of Health and Human Services, more than 178,000 Alabamians -- about four percent of the nonelderly population in the state -- signed up for ACA plans in the last enrollment period this winter. Nine out of ten of those received subsidies for their plans, resulting in an average out-of-pocket cost of $72 a month. In the River Region, 11,792 people signed up for plans: 7,607 in Montgomery County; 2,480 in Elmore and 1,705 in Autauga.

"This coverage helps not only the individuals but also the health care system by decreasing uncompensated care," said Cynthia Bisbee, executive director of the Montgomery-based Wellness Coalition, which helps connect people with insurance. "I would hope that any new plan would allow these individuals not to lose their coverage."

To make the law work, the ACA imposed tax penalties for not taking insurance, and increased taxes on health insurers the wealthiest Americans to pay for it.

The AHCA replaces the tax penalty with a one-time, 30 percent surcharge for not carrying insurance, and cuts taxes used to pay for subsidies. Some business groups considered the mandate and the taxes onerous and welcomed the changes. In a statement Friday, Nancy Hewston, vice president of communications for the Business Council of Alabama, said the BCA commended the House "for their courage to pass this important bill."

"For seven years, it has been a priority of the Business Council of Alabama for Obamacare to be repealed," the statement said. "Mandates are not free, and Obamacare has proven it time and again."

Rosemary Elebash, state director of the National Federation of Independent Businesses, which opposes the ACA, welcomed the law as well.

"The bill repeals many of the Obamacare taxes and mandates and clears the way for additional reforms to make health care affordable, flexible, and predictable for small businesses," she said in a statement.

But reducing subsidies will make it harder to afford the individual plans, which run an average of $575 a month before tax credits.

The AHCA maintains a provision allowing those aged 26 and younger to stay on their parents' insurance and requires insurers to cover people regardless of pre-existing conditions. But the AHCA allows states to apply for waivers that could allow insurers to charge more for pre-existing conditions if the states set up a high-risk pool, which in the past have proven expensive and inefficient at delivering care.

That has raised concerns that insurers could deny people for any number of conditions. According to a December study by the Washington-based Kaiser Family Foundation, which studies health care issues, 942,000 Alabamians -- about 33 percent of the state's non-elderly population -- has some kind of pre-existing condition that could have led to denial of coverage before ACA.

"If you give the state the option of picking and choosing what core benefits insurers have to provide, Alabama will not be in a good position," Carnes said. "We have one major insurance carrier, and it will give them enormous leverage in setting the baseline."

Koko Mackin, a spokeswoman for that carrier -- Blue Cross Blue Shield of Alabama -- said in an email Friday it was "too early" to comment on AHCA.

"We do support changes that will help stabilize the individual market and provide Alabamians more attractive health care coverage that meets their needs and budgets," the statement said.

Medicaid changes

The bill's proposed changes to Medicaid could hit the state the hardest. The program extends benefits to 22 percent of Alabama's population, mostly children, elderly and the disabled. It also plays a major role in keeping the state's hospitals and pediatric offices open.

The federal government picks up more than two-thirds of the costs of Alabama's Medicaid program, which also gets funding from hospital and nursing home provider taxes. The AHCA would change the delivery of federal funds. States would either get a per capita allotment based on population groups, or a block grant based on costs in a base year, like 2016.

Block grants have their fans, including U.S. Rep. Mo Brooks, R-Huntsville, who voted for the AHCA Thursday and said block grants give state leaders "more control over their destiny."

"You minimize the consumption of tax resources by a federal government to the extent you take the federal bureaucracy out of the picture, thereby leaving even more money for the state of Alabama to use to help people who are on Medicaid," he said on Wednesday.

Critics see two problems. First, the grant rises with inflation but doesn't take into account the costs of incorporating new treatments or technologies, or growth in care-intensive populations, such as those 85 years and older. Second, the state already struggles to Alabama's barebones program, and legislators' decisions to restrict funding could harm the state.

"They're locking in the state's historic decisions around the program," said Robin Rudowitz, associate director for the Kaiser Family Foundation's Program on Medicaid and the Uninsured. "A state like Alabama has provided a pretty lean program, so they could be more at risk. They don't have a lot of room to achieve savings or make further reductions in their program."

Supporters argue the state would have greater autonomy to decide eligibility and benefits, which could assist state budgets. Medicaid consumes an ever-larger share of the Alabama's General Fund budget each year, and legislators are either unable or unwilling to raise taxes to fund it. House Ways and Means General Fund chairman Steve Clouse, R-Ozark, said Friday he needed to learn more about the proposal.

"It appears like it would help us in the short-term with some upfront money," he said. "But then in the long-term, it appears they'd be giving states more responsibility as for how to craft eligibility. At the same time, fewer dollars would be coming in."

Providers oppose the changes. Danne Howard, executive vice president and chief policy officer for the Alabama Hospital Association, said changes to pre-existing conditions rules could increase uncompensated care at the state's hospitals, particularly rural ones. Hospitals also depend on Medicaid funding to keep their doors open, and cuts could hurt there.

"In an already fragile system that's struggling to make it, any reduced funding will have a direct impact on hospitals' ability to serve the community," she said.

Pediatricians are also concerned. Dr. Cathy Wood, a Montgomery pediatrician and president of the Alabama chapter of the American Academy of Pediatrics, said changes to certifications of children's eligibility and in payment methods could make it hard for the Alabama pediatricians -- heavily dependent on Medicaid -- to get payments on time.

Wood said rural practices would see hits. She warned that cuts to Medicaid threatened the long-term survival of pediatric practices in rural areas.

"In a lot of instances, there are practices that refuse to take Medicaid," she said. "In rural areas of Alabama, the population pretty much mandates if you take care of kids in an area, you're going to take care of Medicaid kids. Those providers are going to suffer the drip-drip-drip of cuts to Medicaid."

The bill will have the attention of many people in the state.

"I don't think there's any question there's going to be changes in the Senate," Clouse said. "Where this thing finally lands, who knows?"

Deborah Barfield Berry of USA Today contributed reporting.

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