Getting Rid of Essential Health Benefits Means Less Coverage, More Costs for Kentuckians

The House has amended their healthcare repeal to include eliminating a requirement that insurance plans in the individual and small group markets cover a list of ten essential health benefits. Those include maternity care, pediatric dental services, and mental health and substance abuse treatment. The bill already stripped those required benefits from the Medicaid program, which covers 1.3 million people in Kentucky.

Here’s what getting rid of essential health benefit rules from private insurance would mean for Kentuckians:

People with pre-existing conditions won’t be able to find plans that cover the services they need. Without essential health benefits standards, pre-existing conditions protections that benefit 1.9 million Kentuckians with such conditions would exist in name only. That’s because repeal of essential health benefits would drive a race to the bottom, with insurers dropping coverage for everything from chemotherapy to high-cost drugs in order to discourage enrollment by sicker, more costly enrollees. People with pre-existing conditions – who need these and other costly services – wouldn’t be able to find the coverage they need at any price, much less an affordable one. The fact that insurers have to sell them coverage is meaningless if they can’t find a plan that covers the treatment they need.

Plans will be able to impose annual and lifetime limits on coverage – including for Kentuckians who get health coverage through their jobs. The Affordable Care Act (ACA) prohibited plans from imposing annual or lifetime limits on coverage – but only on coverage of essential health benefits. Plans can still impose annual or lifetime limits on services not classified as essential health benefits (such as adult dental coverage). That means that if federal essential health benefits standards are repealed, and essential health benefit rules in Kentucky are weakened, plans could go back to imposing coverage limits on anything from emergency services to inpatient care to prescription drugs – even for kids.

Before the ACA, 1.4 million Kentuckians with private health insurance – the large majority with employer plans – had policies that imposed lifetime limits on coverage. Repealing essential health benefit requirements could mean going back to a time when thousands Kentuckians with health coverage through their jobs were one major illness away from medical bankruptcy.

Individual market plans won’t cover substance use treatment, mental health treatment, maternity care or other key services. Before there were federal standards requiring plans to cover these benefits, many (for some benefits, most) policies didn’t. A small additional pot of money for Kentucky to provide treatment for opioid use disorder and other behavioral health needs won’t make up for the fact that thousands of Kentuckians with health insurance will have to pay out of pocket for treatment.

Women will again be charged more than men for coverage. Eliminating essential health benefit requirements means that women would once again be charged more than men, since they’d have to pay more for plans with maternity coverage — if they could find them at all.

Find out more about the harm from eliminating essential health benefits here.

What You Need to Know About the AHCA’s Harmful Effects on Kentucky

House leaders say they will take a do-or-die vote Friday on the American Health Care Act (AHCA), their plan to repeal the Affordable Care Act (ACA). Their proposal would dramatically reduce the number of Kentuckians with health coverage, make plans more expensive for those buying insurance through the marketplace and shift billions of dollars to the Kentucky state budget — all while providing large tax cuts to millionaires.

Here are KCEP’s resources on the impacts in Kentucky:

The plan would drive up the cost for people buying insurance through the marketplace by reducing tax credits for many people and raising out of pocket expenses — an average cost increase of $1,804 for Kentuckians and much more for older people.

By ending enhanced funding for the Medicaid expansion and placing a cap on traditional Medicaid funding that will squeeze the program in the future, the plan would shift $16 billion in costs to Kentucky’s state budget over a ten year period — inevitably leading to big cuts in enrollment and benefits.

The plan provides big tax cuts to millionaires, and Kentucky has less than half the US average of wealthy people who would even receive a tax cut — even while the state has among the most to lose from people becoming uninsured.

Despite claims from some political leaders that Kentucky’s coverage gains were not met with access to care and better health, new reports and recent data show Kentuckians are getting needed preventive care and health indicators are already improving.

Kentucky has 3 of the 25 congressional districts with the most to lose from repeal of the Affordable Care Act, with Representative Hal Rogers’ district ranked third of all 435 districts. As detailed in these fact sheets, every district in the state will be harmed by the AHCA.

The ACA is playing a key role in helping combat Kentucky’s raging opioid epidemic, but the House plan would roll back opportunities for treatment by reducing the number of people covered and eliminating substance abuse treatment as an essential health benefit.

The House plan would especially reduce coverage and affordability for older adults in Kentucky, including those seeking to buy coverage in the marketplace and those covered by Medicaid.

Our summary of the bill: it would unravel Kentucky’s highly successful Medicaid expansion, end Medicaid as we know it and raise costs for people buying insurance.

Nearly one in three Kentuckians has health insurance either through Medicaid or the marketplace, and the share reaches as high as 68 percent in one rural Kentucky county. Medicaid especially provides access to coverage and boosts local economies, and cutting and capping the program would be devastating to Kentucky’s health and economic well-being.

SNAP Works and Shows Where Economic Progress Still Needed

The Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps, played a key role in helping cushion Kentucky’s economy from the depths of the Great Recession. It continues to be a critical lifeline and economic stimulus for people and parts of the state facing ongoing economic challenges.

SNAP is designed to automatically help boost the economy when it falters. More people become eligible for the program when jobs are lost and incomes decline. That feature both supports families during hard times and counteracts the economic drag of lower spending.

The recent history of SNAP in Kentucky makes this clear. Between 2008 and 2013 — as the Great Recession hit and its effects lingered — the number of Kentuckians receiving SNAP benefits increased by 221,000. But as the economy improved since then, the number of SNAP recipients fell by 25 percent and returned to its level before the recession hit.

Source: Cabinet for Health and Family Services.

Without SNAP kicking in, recessions would be deeper, longer and more painful. As the Center on Budget and Policy Priorities reports, “after unemployment insurance, SNAP is the most responsive federal program providing additional assistance during downturns.”

This role for SNAP also extends to economic problems that crop up at a local level. While SNAP enrollment has fallen across the state since 2013, the decline has been greater in counties experiencing a more robust recovery while the program has continued to play a larger role in counties facing economic barriers.

Twenty Kentucky counties, many of them in central and northern Kentucky, have had a greater than 30 percent decline in SNAP enrollment over the last three years, even while many of those counties have had growing populations overall. In contrast, 10 eastern Kentucky counties have seen SNAP enrollment decline by a more modest 15 percent or less. And a number of eastern Kentucky counties — including Letcher, Harlan, Perry, Knott, Floyd and Pike — have more people receiving SNAP now than in 2008, despite population loss over that time in those areas.


The loss of coal jobs in those counties beginning in 2012, and the ripple effect in communities, plays a big role in that difference. SNAP picked up some of the slack in local economies and ensured many families could meet basic needs. But the lag in those counties — on top of the longstanding high poverty rates that existed in those places already — underscores the serious need for other public investments to help create jobs and transition the economy.

SNAP does its job very well. In addition to economic stimulus, it protects families from hardship and hunger, reduces the depth of poverty, supports employment and has low error rates and administrative costs. Kentucky would have much to lose if Congress pursues changing the structure of SNAP to a block grant, which would make it unresponsive to economic conditions, or if the state creates barriers to access this vital program.

Kentuckians’ Marketplace Health Care Costs Would Rise $1,804 Under AHCA

The Affordable Care Act (ACA) provides Kentuckians with a greater opportunity to gain health coverage. One way it does this is by offering financial help with purchasing insurance through the marketplaces that the law forms. In 2017, 81,155 Kentuckians purchased plans through Healthcare.gov, and nearly 4 out of 5 of them received financial help to buy those plans.

But the American Health Care Act (AHCA), designed to repeal and replace the 2010 healthcare reforms, would drive up the cost for people buying insurance through the marketplace by reducing tax credits for many people and raising out of pocket costs. Total costs would rise an average of $1,804 in Kentucky, according to an analysis by the Center on Budget and Policy Priorities.

AHCA cuts assistance that makes coverage affordable

The ACA reduced healthcare costs for Kentuckians buying through the marketplace in three ways: by subsidizing premium costs, giving financial help for out-of-pocket costs to low-income consumers and requiring insurers to cover a large share of healthcare expenses. All three of these mechanisms are in jeopardy with the AHCA.

  1. Assistance for paying premiums would be reduced for older and low-income people.

According to Healthcare.gov, the plans people chose in Kentucky in 2017 had premiums that averaged $406 per month before taking into account the tax credits that the law created.  But 78 percent of Kentuckians who purchased insurance from the marketplace received tax credits, which lowered monthly premiums to $144 per month.

Older and low-income Kentuckians stand to lose the most from the restructured financial assistance in the AHCA. Whereas the ACA provided an income-based tax credit that adjusts with the cost of premiums, the AHCA provides a flat credit that only adjusts somewhat with age. For a variety of reasons explained here, the credits would be less generous for older people, and the AHCA does less to help lower-income people because it ignores people’s income level or ability to afford insurance.

That is a big problem in Kentucky because according to recent enrollment data, nearly a third of enrollees in Kentucky are between the ages of 55 and 64, and more than half are over the age of 45. In addition, just over 60 percent earn at or below 250 percent of the federal poverty level ($30,150 for an individual) and 40 percent below 200 percent of the federal poverty level. ($24,120 for an individual).

  1. Help covering out-of-pocket costs would be repealed.

Just over half of all marketplace enrollees receive additional help paying for out-of-pocket costs like deductibles, co-insurance, and co-pays called Cost Sharing Reductions. This financial assistance is specifically targeted for enrollees with a household income at or below 250 percent of the federal poverty level. These Cost Sharing Reductions would be repealed under the AHCA.

  1. Requiring insurers to cover a high portion of medical costs would be repealed.

At the same time as assistance for premium payments and out-of-pocket costs would be scaled back, the AHCA also cuts the percent of medical costs an insurer would have to cover. Currently a “silver” plan on the marketplace has to cover at least 70% of medical costs. According to the Congressional Budget Office, under the AHCA insurers would likely cover 65% of medical costs. This means that the plans that insurance companies offer would likely have higher deductibles, co-insurance and co-payments.

In addition to these changes, for a variety of reasons premiums would be approximately 4 percent higher under the AHCA for people of similar age.

Cost estimates show big increases in total healthcare costs

In total, the Center on Budget and Policy Priorities (CBPP) estimates that in 2020 (the first year of implementation), the combination of slightly higher premiums, a less generous tax credit for many and higher out of pocket costs mean the AHCA will raise healthcare costs for individuals in Kentucky by an average of $1,804 a year.

Source: Center on Budget and Policy Priorities

The increase in costs is even bigger for older Kentuckians. While the average increase in net premiums (premiums after tax credits) is $822 for the state as a whole (see above), it is $6,266 for 60 year olds, as shown in the table below. These costs are not reduced much if the final bill includes the rumored $85 billion “fix” the House is considering to help offset costs for older Americans. In Kentucky, the net premium increase for a 60 year old would still be $4,386.

Source: Center on Budget and Policy Priorities

Lawmakers in Washington have consistently promised more affordable insurance, but the current proposal moves us backward and leaves people purchasing insurance on the marketplace in a lurch. Reducing help paying for premiums and out-of-pocket costs while simultaneously reducing what insurers would pay toward medical costs all add up to unaffordable insurance for many Kentuckians.

House Health Repeal Would Shift $16 Billion in Costs to the Kentucky State Budget

The House Republican plan to repeal and replace the Affordable Care Act (ACA), known as the American Health Care Act (AHCA), would cut federal funding for Medicaid in Kentucky by $16 billion over 10 years, according to an analysis by the Urban Institute. Making up that shortfall would require an increase in state Medicaid spending in Kentucky that would be bigger than all but one other state.

Cuts to Medicaid in the AHCA come in two ways. First, it would require Kentucky to spend approximately three times more than under current law to continue our Medicaid expansion. Second, it would further reduce federal dollars for Medicaid through changing the funding formula to what is called a “per capita cap.” Under that mechanism, federal funding will grow more slowly over time than Kentucky’s overall Medicaid costs.

According to the Urban Institute’s analysis, federal Medicaid spending in Kentucky would be 14 percent lower over the years 2019-2028 than it would be under the ACA, for a reduction in federal funding of $16 billion. State spending on Medicaid in Kentucky would have to increase 52.3 percent to fully make up for the federal cut, the biggest percentage increase of any state except New Mexico. States that have many low income people and that expanded Medicaid would have the biggest funding gaps to close.

Source: Urban Institute.

These estimates assume states do not cut Medicaid enrollment as a result of this cost shift. In reality, Kentucky would inevitably reduce eligibility, benefits and/or provider payments. The bill would effectively end Kentucky’s Medicaid expansion and squeeze funds for the traditional Medicaid program, which benefits children, people with disabilities and seniors. About 1.3 million Kentuckians currently receive Medicaid.

The Urban Institute’s analysis is based on the committee-approved bill and may be modified by further revisions to the legislation.

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by Editorial Staff

Trump Budget Eliminations Would Be Major Hit to Kentucky

President Trump’s proposed budget would be a major hit to the investments that benefit Kentucky’s communities, as federal dollars play a substantial role in our state’s budget and economy. His budget would completely eliminate programs that provided more than $190 million in federal funding to Kentucky in 2016, according to an analysis from Federal Funds Information for States.

Those eliminations alone amount to nearly nine percent of all discretionary federal funding to the state. On top of those eliminations, the president’s budget would reduce funding for a wide range of investments, including those affecting worker training, protection against pollution and improved health.

The table below shows the specific losses to Kentucky from the budget’s total elimination of select programs alone:

Along with deleting these programs, the proposed budget also eliminates seven entire federal agencies that send funding to states. These programs provide investment in economic development; the arts, humanities and public broadcasting; legal protections for low-income people; and opportunities for public and community service:

  • Appalachian Regional Commission (ARC) – $146 million
  • Corporation for National and Community Service – $786 million
  • Corporation for Public Broadcasting – $444 million
  • Museum and Library Services – $230 million
  • Legal Services Corporation – $384 million
  • National Endowment for the Arts – $148 million
  • National Endowment for the Humanities – $148 million

Between October 2015 and January 2017, Kentucky received $31.9 million in ARC funds alone for investment in infrastructure, entrepreneurship, workforce training and leadership and community development.

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