BEYOND THE NUMBERS
Three leading House Republicans — Education and Workforce Committee Chairman John Kline, Ways and Means Committee Chairman Paul Ryan, and Energy and Commerce Committee Chairman Fred Upton — say they have a plan in case the Supreme Court rules that health reform subsidies are no longer available to people buying federal marketplace coverage. Like the recent proposal from three Senate Republicans, this latest “plan” is very vague, but what we know about it strongly suggests that it would make coverage much less affordable, particularly for people who are older or in poorer health.
The three House chairmen say they would allow states to waive various health reform requirements. They don’t specify which ones, but their proposal likely would allow insurers to return to the pre-health-reform market by:
- offering plans with large gaps in coverage, such as no prescription drug or maternity coverage;
- charging older people much higher premiums than younger people;
- charging deductibles and other cost-sharing without limits; and/or
- imposing annual dollar limits on benefits.
States also could drop health reform’s individual mandate, which helps keep premiums stable and affordable in the individual market by encouraging a balanced mix of people (younger and healthier people as well as older and sicker ones) to enroll in health coverage.
The chairmen also would allow insurers to sell coverage across state lines, which would likely mean that insurance companies wouldn’t have to comply with consumer protections in most states — only whatever weaker protections exist in the state where the insurer has chosen to be licensed. Such plans would mainly attract healthy people with low health care costs since they least need strong consumer protections. That’s exactly why the Congressional Budget Office (CBO) previously found that such an approach would drive up premiums for people with higher-than-average health care costs, forcing some to go without coverage.
Similarly, the chairmen say that small businesses could pool together to purchase coverage. That’s probably a nod to proposals establishing “Association Health Plans” (AHPs). Like plans offered across state lines, AHPs are generally exempt from a state’s consumer protections, so they mainly attract businesses whose employees are younger and healthier. Because employers with older workers and less-healthy people would remain in the regular non-AHP market, they would end up paying much higher premiums, as CBO also has explained.
Finally, the chairmen say they’d provide a new tax credit to buy health insurance. But they don’t explain how it would compare to the credit provided in the marketplace today, such as by revealing the size of the credit or who would get it. Nor do they say whether their plan includes financial assistance to help people with deductibles and cost-sharing charges, as health reform does. They say the tax credit amount would be adjusted for a person’s age, but they don’t say whether the adjustment would fully account for the much higher premiums that older people would have to pay under the plan.
In short, under the Kline-Ryan-Upton plan, many people, especially those aged 50-64 and those in poorer-than-average health, would likely pay much more than under current law, and any subsidies would likely prove highly inadequate over time. This, in turn, would reverse health reform’s dramatic progress in reducing the ranks of the uninsured and underinsured by (1) forcing millions of people to go without coverage and (2) forcing many others to get by with skimpy coverage or face deductibles and co-pays they can’t afford and, hence, go without needed care.