As tens of thousands of Americans die from drug overdoses each year, House Republicans are preparing a bill that could make the current and next drug crisis worse.
The American Health Care Act, which seeks to repeal and replace the Affordable Care Act (also known as Obamacare), may not at first seem directly linked to the ongoing opioid painkiller and heroin epidemic, which contributed to a majority of the more than 52,000 drug overdose deaths in 2015. But because the bill deals with health care broadly, it will impact access to drug addiction treatment — potentially deciding how accessible care is for the millions of Americans with drug use disorders.
The Congressional Budget Office (CBO) estimated that the Republican bill would leave 14 million fewer people without health insurance by next year compared to current law, and that number would grow to 24 million by 2026. Among those people without insurance are many Americans who rely on insurance for addiction treatment, although the CBO didn’t calculate how many fall under that scenario.
Still, the early impressions suggest the bill will allow insurers to effectively cut coverage for addiction care. And since many of the bill’s cuts go through Medicaid and Obamacare’s tax credits for health insurance, it will have a disproportionate impact on low-income Americans — those least likely to be able to afford addiction treatment in the first place.
That could be devastating to potentially millions of Americans. According to an analysis by Harvard Medical School and New York University researchers, Obamacare expanded access to care for 2.8 million Americans with drug use disorders. Depending on how far the House’s Obamacare repeal bill goes, that means up to millions of people struggling with addiction could be left stranded without potentially lifesaving care.
It would be one thing if President Donald Trump, who supports the House bill, had an alternative plan to deal with the opioid epidemic and future drug crisis. But Trump has only called for building his wall to slow the flow of heroin — something experts say a wall will fail to do — and vaguely demanded more spending on drug treatment. The Republican health care bill, by pulling back access to drug treatment, would accomplish the direct opposite of Trump’s plea on treatment spending.
The House’s Obamacare repeal bill waters down coverage requirements for addiction treatment
Under Obamacare, private health plans in the individual market and public plans have to cover treatment for drug use disorders. The House bill begins peeling back these requirements, leaving potentially millions of people without the kind of coverage they might need.
The bill does technically keep mandatory “essential health benefits” for private insurers, meaning individual market plans and small group plans will still have to cover, among other mandatory benefits, “mental health services and addiction treatment.”
But the bill creates a big loophole: In 2020, it will eliminate what’s known as “actuarial value,” which essentially requires that insurers pay for a certain amount of a person’s care. So under Obamacare a “silver” plan, which is more generous than “bronze” but less generous than “gold” and “platinum,” would have an actuarial value of 70 percent — meaning that insurers would generally pay for 70 percent of health care expenses, while enrollees would pay for the rest through deductibles, copays, and coinsurance. The House bill would essentially get rid of this, letting insurers set how much they’d pay for.
Experts worry that the repeal of actuarial value could in effect allow health insurers to check the box for drug treatment coverage without actually paying for such coverage — or at least without paying for enough to make drug addiction treatment affordable to the typical patient.
“You need all of those pieces together,” Richard Frank, a health economist at Harvard, told me. “You want to say these are the buckets that have to be part of an insurance plan, and then within that you need to offer coverage that protects people in certain ways — and that’s what the actuarial value does.”
This accomplishes a key goal for House Republicans: They have long decried Obamacare’s essential health benefits, arguing that mandating so much coverage for insurers makes health plans far too expensive. It’s true these requirements do make insurance overall more expensive, since it forces insurers to cover more stuff. But the idea is that by requiring everyone to cover these benefits, the cost is shared by the whole insured population, not just the fewer people who need, say, drug treatment or maternity care and would otherwise have to find a way to pay for either on their own.
Republicans just don’t think the trade-off is worth it, since it makes insurance a bit more expensive for everyone.
But Republicans are trying to create a filibuster-proof bill by using what’s known as the budget reconciliation process, which basically requires everything in their bill to have some sort of budgetary impact. Since essential health benefits don’t meet these criteria, the bill uses other avenues to limit the cost that mandatory benefits place on insurers.
As a result, experts say that drug use disorder treatment will likely be one of the first things to go in health plans.
“Over the last 60 years, 70 years, or so, insurers have scrupulously avoided enrolling people with mental health and addictions as much as possible,” Frank said. “That’s because they are more complicated and expensive to treat. And they did so by offering either no coverage or limited coverage.”
So without essential health benefits and actuarial value guaranteeing some of those benefits are actually covered, insurers could return to those past practices — leaving people struggling with addiction behind.
The bill also just flatly reduces access to coverage
The other big sticking point for drug treatment: The House bill, through cuts in Medicaid and health insurance tax credits, will reduce access to drug treatment coverage.
For one, the House bill gets rid of essential health benefits for Medicaid altogether starting in 2020. This means that Medicaid plans will no longer need to cover drug treatment, which could leave low-income Americans who rely on Medicaid for coverage without access to such care.
The bill also begins to phase out Obamacare’s Medicaid expansion. Under the health care law, the federal government pays for at least 90 percent of the cost for states expanding Medicaid to cover anyone up to 138 percent of the federal poverty level. The House bill keeps this in place for now but freezes enrollment starting in 2020, which the bill’s authors expect will essentially wean states off the Medicaid expansion over time.
On top of that, the bill would convert Medicaid to a “per capita cap” system, which effectively means that the federal government would pay for less of Medicaid over time — reducing the amount of coverage that Medicaid can provide.
And the bill does away with Obamacare’s tax credits for individual market health plans, moving toward a system that gives smaller tax credits in general and decides how big a person’s tax credit is based on their age instead of their income. This will make health insurance less affordable, particularly for low-income people, since the government will pay for much less of it.
How tax credits would change for #Obamacare enrollees under the just-released House Republican replacement plan #AmericanHealthCareAct pic.twitter.com/t491Lk2ibV
— Cynthia Cox (@cynthiaccox) March 7, 2017
Combined, all of this means that fewer people will be covered under the House bill — shown in the CBO’s estimate that 24 million fewer people will have insurance by 2026 compared to current law.
Obviously, losing access to Medicaid and other insurance would hurt a lot of people in general, removing access to any health care. But one of the forms of health care that’s affected here would be coverage for drug treatment. And that would be particularly stifling for low-income people, who simply can’t afford to pay out of pocket for this kind of care. That’s one of the reasons that, according to 2014 federal data, at least 89 percent of people who met the definition for a drug use disorder didn’t get treatment — and that was with Obamacare largely in place.
Consider Medicaid. According to a 2014 study by Truven Health Analytics researchers, Medicaid paid for about 25 percent — $7.9 billion of $31.3 billion — of projected public and private spending for drug abuse treatment in 2014. That made it the second biggest payer for drug abuse treatment spending after all local and state government programs. But if House Republicans move forward with phasing out the expansion and cutting Medicaid in general with a “per capita cap” system, Medicaid won’t be able to pay for nearly as much addiction care.
This would come on top of another existing limitation: Even if a health plan covers drug treatment, it might not cover all kinds of treatment. For example, some states include medication-assisted treatment such as methadone and buprenorphine in their Medicaid plans, while others only cover more traditional addiction therapy and treatment facilities built around the Alcoholics Anonymous approach. So it can vary from state to state and plan to plan, but generally addiction care isn’t in an ideal place even under Obamacare — and it’s likely to become more limited under the House bill.
Keith Humphreys, a drug policy expert at Stanford University, told me that there will be an indirect effect to all of this, beyond people simply losing access to coverage:
A key issue here is that [substance use disorder] care is not like oncology or cardiology. Most providers are small, mono-business entities that can’t absorb costs elsewhere in their care systems. What this means is that while hospitals will not go broke if poor people get less oncology care coverage, many [substance use disorder] treatment agencies will. A clinic making ends meet by serving 65 percent private insurance, 5 percent cash pay, 30 percent Medicaid pay [going] out of business [deprives] everyone, on Medicaid or not, of care. They don't have another care line to make up the difference, and the private market just isn't big enough or well-covered enough to take up the slots that Medicaid was buying before.
So by eliminating access to drug treatment for consumers currently covered by Medicaid and tax credits, the House bill will make it much harder for treatment facilities to remain open as sustainable businesses. And that could lead many of these facilities to close — further limiting supply that’s already so tight it can lead to weeks- or months-long waiting periods for care among patients who can afford drug treatment.
The one hope to all of this is that the opioid epidemic may end or at least recede by 2020. But even if that’s the case, it will only be a matter of time until the next drug crisis hits. And if the House bill passes, fewer people will have access to the addiction care they’ll need to deal with that crisis.
