The state Senate failed Thursday to pass the bill to create a health insurance exchange, a marketplace where people can buy health plans. Given that just one day is left in the session and Gov. Robert Bentley opposes the bill, it could be next year before lawmakers again address the federally-mandated legislation.
The Affordable Care Act requires states to either create their own health insurance exchanges or accept one created by the federal government. States must have plans in place for the exchanges by early 2013 and have them operational by 2014, according to federal deadlines.
“The state must enact a state-based exchange,” Rep. Greg Wren, R-Montgomery, said in a phone interview last week. “If not, we’ll default to a federal-run plan that hasn’t been written yet. This is a defensive strike.”
However, some state lawmakers have objected to certain provisions in the bill, such as the requirement that carriers must offer plans in every county of the state. Legislators are worried the provision could give a monopoly to Blue Cross Blue Shield, the only insurance provider meeting that requirement.
Jennifer Ardis, press secretary for Bentley, said the governor has concerns of his own and would veto the bill in its current form.
“This legislation is premature,” Ardis said. “The federal government has yet to establish clear guidelines for a health insurance exchange.”
Ardis added that the U.S. Supreme Court has not yet ruled on the constitutionality of the Affordable Care Act.
“If Supreme Court justices strike down the law as the governor hopes they will, there will be no need for such an exchange,” Ardis said. “Also, there would still be time in the 2013 session to set up an exchange if the law is upheld. If this legislation is approved in the current session, a veto can be expected.”
However, a current provision in the bill states that if the Supreme Court strikes down exchange requirement of the Affordable Care Act, the legislation would immediately be repealed.
Exchange helps those in middle
For some health care industry experts, a health insurance exchange would mean lower health care costs and proper medical coverage for many uninsured Alabamians. Still others suspect such an exchange would simply shift health care costs elsewhere and not do much good.
According to statistics to from the Kaiser Family Foundation, a nonpartisan nonprofit that focuses on health care issues facing the country, more than 744,000 or 16 percent of Alabama’s population is uninsured.
The state’s health insurance exchange is designed to help those uninsured who make too much money to qualify for Medicare or Medicaid but still not enough to afford private health insurance. M.J. Ellington, policy analyst for Alabama Arise, a nonprofit that advocates for low-income residents, said the exchange would set up multiple insurance plans based on an uninsured resident’s ability to pay.
“If a person’s income is at the federal poverty level or very close to it, they’ll be given the option of at least two years of federal subsidies and probably after that as well to help purchase a plan,” Ellington said. “The intention of the financial assistance is to help bring people in who might not be able to afford insurance now.”
Rachel Garfield, senior researcher for Kaiser, said the exchanges are designed to work in tandem with proposed expansions to Medicaid. Garfield said under the Affordable Care Act, Medicaid — which is typically used by children and the elderly — will be expanded to include more adults below the poverty line. Garfield said the expansion to Medicaid combined with the exchanges would provide health care to an estimated 32 million uninsured people in the United States.
“The biggest impact from that would be on the uninsured themselves,” Garfield said.
Garfield said uninsured people tend to wait as long as possible before getting treatment, meaning they’ll likely need to undergo more expensive procedures than had they sought help earlier.
“That can lead to bankruptcy, credit card debt … and sometimes the uninsured can’t pay and then that becomes uncompensated care that gets absorbed in various ways,” Garfield said.
Emergency rooms pay the price of delay
One way that cost is absorbed is through hospital emergency rooms, which many uninsured people tend to use when they can no longer postpone treatment, Ellington said.
Ellington said keeping low-income people out of emergency rooms is one of Arise’s priorities.
“By not just going to the ER and instead having a person track their health on a regular basis, they will probably get care faster and be treated earlier,” Ellington said. “And without a medical history, people go into an ER as a blank slate and then the doctors have to do certain things that add to the cost.”
Rosemary Blackmon, president of the Alabama Hospital Association, said hospitals across the state are concerned about the growing cost of uninsured patients.
“People who don’t have health coverage utilize the ER for medical care and not only is that inappropriate, it creates a backlog for people who may need immediate care,” Blackmon said. “And a lot of times, if the uninsured don’t get primary care, they will come into the ER with conditions that can be life-threatening and that can end up costing a lot more.”
Blackmon noted that hospitals are also concerned about what will happen if the Supreme Court strikes down exchanges, but leaves other parts of the Affordable Care Act intact, such as cuts to reimbursements for uncompensated care.
David McCormack, CEO of Regional Medical Center in Anniston, said while having fewer uninsured in the emergency room would be beneficial, he is concerned about the costs of the Affordable Care Act. He said under the federal plan, more people will be under Medicaid, which typically reimburses less than other plans, such as ones offered by Blue Cross Blue Shield.
“There’s no funding mechanism,” McCormack said. “It all sounds good on paper. But when you put it into practice, it may not work the way it’s supposed to work.”
Star staff writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star