Cecil County Shows Big Gain in Health Insurance Coverage; State Faces Rising Costs Even Before Expected Trump Health Law Repeal

About 96 percent of Cecil County residents are now covered by health insurance, a substantial gain since the federal Affordable Care Act took effect in 2014. But uncertainty over the fate of the federal law, which the Trump administration has vowed to repeal, poses fiscal concerns for the Maryland budget and worries local health care providers such as Union Hospital.

The non-partisan Office of Legislative Services recently briefed lawmakers in Annapolis on potential healthcare cost pitfalls facing the state in the current budget year and the upcoming Fiscal 2018 budget currently under review by the General Assembly– even under the existing terms of the Affordable Care Act (ACA.) And in the uncertain climate of a potential repeal of ACA, the state could face insurmountable budget costs if it tried to assume a greater share of health insurance subsidy costs, with the potential difficult choice of deciding who, or what medical conditions, should receive assistance.

The political uncertainty also raises concerns over the fate of Maryland’s unique federal “waiver”—the only state in the nation to have an exemption from many federal Medicare and Medicaid regulations—that has put a brake on rising hospital and health care costs to rates below the national average, but still infuses an extra $2 billion a year into the Maryland hospital and health services economy.

On the good news front, in Cecil County, 11 percent of the population lacked health insurance coverage in 2013, before the Affordable Care Act (ACA) was fully implemented, but by 2016, only 4 percent of county residents lacked insurance coverage, a dramatic reduction in the proportion of uninsured residents. (That means that only about 4,000 county residents now lack insurance coverage.) Cecil County often lags behind statewide standards on health, income and other measures, but in the health insurance coverage stats the county has exactly the same figures as the statewide results, according to state health reports.

Private employers or the Medicare health program for the elderly provide the vast majority of health insurance coverage, but the ACA program operated through the Maryland Health Benefit Exchange has boosted coverage for many local residents. The newest state data for Cecil County, compiled after the 1/31/2017 closing date for this year’s enrollment in programs offered under the ACA, show a total of 8,487 Cecil County residents are now enrolled. Of the total, 2,102 people purchased private insurance through the Maryland Health Benefit Exchange (“Maryland Health Connection”) while a much larger number–6,385—qualified for Medicaid coverage under an expanded Medicaid eligibility standard set up by the ACA.

Statewide, 157,637 people signed up for private insurance plans offered through the state exchange, while 274,159 qualified for the expanded Medicaid program, state health officials reported. (Total Medicaid enrollment, including traditional Medicaid for low income residents as well as those qualifying under slightly higher income levels for the expanded program, numbered 1.1 million people statewide.)

The “expanded Medicaid” program—which Maryland agreed to operate under the former administration of Gov. Martin O’Malley—requires states to contribute extra funds to support coverage for people with incomes slightly higher than the traditional very low income Medicaid threshold. In turn, the federal government provides substantial extra subsidies for states participating in the expanded Medicaid option. A majority of Republican-controlled states refused to participate in the expanded Medicaid program but Maryland Gov. Larry Hogan, a Republican, has backed continuation of the state’s expanded program.

The “expanded” Medicaid program provides coverage to a wide array of Marylanders, including small business owners, young people over the age of 26 who were allowed under ACA to stay on their parents’ insurance plans for several years after college but have aged-out of those protections, and older residents laid off from jobs with benefits but still too young to qualify for Medicare.

“We’ve had a really good response,” said Mark Romaninsky, program director for the Upper Eastern Shore for Seedco, a private contractor which serves as a “navigator” to guide citizens through the learning and sign-up process for the state health benefit exchange. With offices in Elkton, the organization covers Harford and Cecil counties and other Upper Shore counties. Through informational sessions and public meetings in local churches, schools and community centers, the navigators explain the health insurance options, eligibility criteria for expanded Medicaid and available tax credits and subsidies for people buying private insurance through the exchange.

Romaninsky said that Care First was the private plan available throughout the area, while in Harford County some residents chose Kaiser plans. Statewide, Care First is the largest provider of private health insurance through the ACA program on the state exchange, state reports noted.

Patients can also sign up directly online, or through a new mobile app that has been popular with younger people, Romaninsky said.

Indeed, statewide statistics show the “millennials” and other younger residents were the largest proportion of enrollees in the latest 2017 signup. People between the ages of 18 and 34 constituted 30 percent of enrollees, while the next largest age group was pre-retirees from 55 to 64. (Medicare becomes available at age 65, so most people shift from private or ACA insurance coverage at that age.)

In the 2017 enrollment, 40 percent of participants were new to the program while 60 percent were renewing coverage from previous years.

The ACA has also had a significant positive impact on local healthcare providers, as more patients had insurance coverage so they sought treatment earlier before a health problem became a crisis, and patients were able to pay their bills to doctors and hospitals through insurance.

For Union Hospital in Elkton, ACA has made a huge difference in cutting in half the amount of unpaid bills of people lacking insurance, costs that otherwise would have hurt the non-profit hospital’s bottom line and limited its efforts to establish new programs and services, according to Laurie Beyer, Chief Financial Officer of Union Hospital.

Bad debts were cut in half, from 6 percent to 3 percent of billings, largely due to the expanded Medicaid provisions of the ACA, she said. In dollars, that means the hospital saved over $1.6 million a year since ACA began in 2014, for a total of nearly $5 million so far. (Statewide, ACA has reduced hospitals’ “unreimbursed costs of care” by $300 million, according to the state’s Legislative Services analysts.

Union Hospital has been embarking on an ambitious program in the past few years of expanding services and coordinating with other healthcare providers in the region. A cutback in patients’ insurance coverage could jeopardize the hospital’s plans to “invest in the community” with expanded services, Beyer said. And the ACA requires insurance coverage of drug addiction treatment and mental health services—areas in which Union has recently expanded its programs and services. “If the ACA were to go away, that would have a significant impact” on Union’s new initiatives, Beyer noted.

Meanwhile, the state budget is facing rising costs to cover its share of healthcare costs and non-partisan state budget analysts recently warned that the state could face some difficult policy and fiscal choices, especially if ACA is repealed without a comparable replacement program.

The proposed Hogan budget for Fiscal 2018 projects that overall spending in the state for the expanded Medicaid program would rise by $252.9 million or 2.3 percent. But of key concern is where the extra money would come from in the Hogan budget: an increase of $173 million or a 5.8 percent rise in the amount of costs paid from the state’s General Fund, while federal aid only rises by 0.8 percent, or $52 million.

In addition, the budget analysts warned that the future of healthcare costs borne by the state could be crushing, since the governor’s budget proposal assumes that current levels of federal aid and subsidies under the ACA would continue—but the outlook of the Trump administration’s plans are unknown.

Hogan has said he wants to keep coverage and services as-is, but he has faced criticism from Democrats in Annapolis for not aggressively fighting for retention of the ACA with the Trump administration. Instead, Hogan has sent some letters to leaders in Congress to defend Maryland’s unique “waiver” from Medicare and Medicaid regulations through the Maryland Health Services Cost Review Commission that controls overall hospital costs in the state. The federal waiver ultimately infuses an extra $2 billion in federal funds into the state’s healthcare system.

[SEE previous CECIL TIMES Special Report on the Maryland waiver and how it is being used to transform how, and where, Cecil County residents receive health care and from which hospitals they get treatment: http://ceciltimes.com/2016/03/cecil-county-health-hospitals-changing-economics-in-harford-but-union-hospital-to-cut-christiana-out-of-care-loop/ ]

Hogan refused to endorse or vote for Trump in the recent presidential election, and when reporters question him now about the new Trump administration’s programs or policies, Hogan labels such questions as “stupid” and refuses to answer.

But on healthcare, it may not be “stupid” to worry about the fate of many Marylanders now getting health insurance for the first time and hospitals facing uncertain impact on their bottom line and ability to serve local residents. And with less than two years before he faces voters for re-election, Hogan will have to answer to voters who may lose health coverage if the federal program is repealed and taxpayers facing potentially higher state budget spending for state healthcare costs.