There will be some “very big numbers” at stake when the U.S. Supreme Court considers Tuesday the latest challenge to the federal Affordable Care Act, especially in Maryland, which lawmakers, experts and observers say has embraced the law more than most.
Among Marylanders with health insurance, one in five plans would be wiped out or significantly changed if the law, also known as Obamacare, was not upheld. Millions more with work-related insurance likely would lose benefits and see rate increases. Overall, the state would lose about $4 billion in federal funding.
“Everybody in the state will suffer without this law,” said state Del. Shane Pendergrass, a Howard County Democrat who chairs the House Health and Government Operations Committee.
“People will lose their insurance, premium and hospital rates will go up for everyone, there won’t be caps on what they have to spend out of pocket,” she said. “The list goes on.”
The coronavirus pandemic has only complicated matters by saddling more than 148,000 Marylanders with a preexisting condition, potentially making them uninsurable without the law. About 2.5 million Marylanders — more than two in five residents — already had some health condition that insurers could consider disqualifying.
Pendergrass said the General Assembly has worked in a bipartisan way to expand and support the law, codifying various protections, helping subsidize expensive care after the Trump administration ended a federal subsidy, and making enrollment easier.
But state lawmakers would not be able to replace the federal law because of the enormous costs. Further, the Supreme Court’s decision could come as late as June when the court session ends, after the next regular legislative session in Annapolis ends.
The court will hear arguments in the case to determine whether the ACA remains constitutional without the “individual mandate” that had required all Americans to buy coverage. Republicans in Congress, who object to government involvement in health care or its costs, eliminated the penalty under the mandate in 2017, and the justices agreed to review whether any of the law still can stand.
The case was brought in 2018 by Texas and 19 other states and is supported by Republican President Donald Trump, who has said he believes it’s too costly and burdensome but has not proposed an alternative.
Democratic U.S. Sen. Chris Van Hollen of Maryland said the law has become integral to providing health care to more than 20 million Americans, and many provisions are highly popular, such as aid for seniors to pay for medications and coverage for people with preexisting conditions.
“The court could take the position certain parts of law can stand on their own, but the parts are interconnected,” Van Hollen said. “As to what [the] court will do, I don’t know. If they strike down the entire law, it will have a very destabilizing effect on Maryland and the country.”
The $4 billion Maryland would lose in federal revenue, estimated by state legislative analysts, would be particularly hard to make up. The state uses the money in several ways: to offset costs of insuring the sickest and most expensive consumers, to subsidize premiums for enrollees, and to pay most of the costs to expand Medicaid, the health care plan for low-income residents.
There are close to 350,000 extra people covered by Medicaid in Maryland under the expansion. About 212,000 people buy private plans, most with subsidies. There are an additional 263,000 plans for people who work for small businesses that opted to provide coverage compliant with the ACA.
Those in the expanded Medicaid group would be cut off without the federal law, losing coverage entirely and unable to afford it otherwise, Van Hollen said. And the market likely would be unstable and prohibitively expensive for other enrollees and insurers, he said.
The 3.3 million Marylanders who have separate work-related coverage likely wouldn’t be spared either.
Bob Atlas, president and CEO of the Maryland Hospital Association, said losing federal funds could mean more costly care for everyone. In Maryland, rates are set by the state and likely would rise to offset the costs for caring for more people without insurance.
“Hospitals always do care for every patient regardless of ability to pay,” he said. “So, if hospitals deliver an extra half-billion dollars' worth of care to patients who cannot pay, insurers and consumers may ultimately have to help shoulder the burden.”
Dr. Mohan Suntha, president and CEO of the 13-hospital University of Maryland Medical System, said it’s not clear what would happen to the state’s unique hospital payment system that brings higher federal reimbursements for Medicaid and Medicaid patients in exchange for keeping people healthy and out of hospital beds.
The system existed before the federal health law, but has since been updated to reflect goals of the Affordable Care Act to improve health and reduce costs.
“If the ACA is overturned or deemed unconstitutional, the question looms whether Maryland’s innovative focus on value based-care and reduced costs would be abandoned,” he said. “A return to the traditional ‘fee for service’ model would likely cause a significant spike in spending and force a return to the old way of caring for patients. If this experiment of value-based care — where Maryland is a clear leader — were to end, 49 other states could lose the opportunity to see how well our system is working and what savings can be achieved.”
Some observers of the health law, passed in 2010, say it’s become so ingrained in the health system in Maryland and other states that it’s hard to see all of the effects from dismantling it.
Sabrina Corlette, a research professor in Georgetown University’s Center on Health Insurance Reforms, said those with employer-based coverage wouldn’t be able to keep their children on their insurance up to age 26, receive free preventive care and avoid lifetime caps on coverage.
“It’s hard to overstate the possible impacts,” Corlette said, “especially in states like Maryland, which has really leaned in on the ACA.”
She said the law has become more popular with Americans over time and even conservative states have asked to expand their Medicaid programs to cover more people.
Twelve of the 14 states that operate their own exchanges to sell insurance opened special enrollment periods during the pandemic for people who lost their jobs and related insurance.
In Maryland, almost 90,000 people enrolled in recent months for immediate coverage, said Michele Eberle, executive director of Maryland Health Benefit Exchange, which operates the marketplace.
She said she expects high demand for coverage next year, too.
Enrollees and insurers fled the exchange due to rising costs after a federal program to offset the cost for the sickest consumers was eliminated, but they have been returning in the past three years since a state program was created and premiums dropped by about 30%.
Open enrollment began Nov. 1, and more than 1,000 people signed up in the first few days, she said.
“The Affordable Care Act is still the law of the land,” Eberle said. “We encourage Marylanders to visit MarylandHealthConnection.gov to enroll in 2020 and 2021 health plans through Dec. 15.”
Mike Ricci, a spokesman for Gov. Larry Hogan, a Republican, said the state will figure out a way to handle what comes.
“We have had to deal with uncertainty surrounding Obamacare before, and in Maryland, we’ve consistently demonstrated that we are able to come together to make coverage more accessible and affordable," Ricci said. "That includes creating the largest reinsurance fund in the nation, which has helped drive down premiums three years in a row.”
Officials at the state’s dominant insurer, CareFirst BlueCross BlueShield, say they already are planning for “a number of potential rulings” from the Supreme Court.
But Brian D. Pieninck, the insurer’s president and CEO, was blunt about consequences for states that could no longer pay for so many people in Medicaid and for people trying to buy insurance.
“A ruling that the entire ACA is unconstitutional, without further action," he said, "would make health coverage in the individual market unaffordable.”