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GOP-ers’ Health Plan Would Make Millions More Uninsured, Analysis Shows

A new study supports our finding that a leading congressional Republican health plan, from which House Republican leaders may borrow for their own plan, would likely cause millions to end up uninsured or underinsured.

We’ve already noted in a recent blog post series that if House Republican leaders unveil a health plan alternative to the Affordable Care Act (ACA) in June, as House Speaker Paul Ryan has indicated they will, it may resemble or include elements of a proposal from House Energy and Commerce Chair Fred Upton, Senate Finance Chair Orrin Hatch, and Finance Committee member Richard Burr.  We’ve also explained that the Upton-Hatch-Burr plan would likely leave millions more uninsured or underinsured.

Now, RAND Corporation analysts have estimated the Upton-Hatch-Burr plan’s expected effect on health care coverage and conclude that relative to current law, it would “insure fewer people, raise the federal deficit and impose greater financial burden on some vulnerable groups, including older adults and people with incomes under 138 percent of the FPL [or the federal poverty line].”   

Specifically, RAND finds that the plan would:

  • Leave 9 million more individuals uninsured, relative to current law.  In 2018, 36.7 million people would not have health coverage, compared to 27.7 million under health reform.  The vast majority of those who would lose coverage — 77 percent — would be near-elderly adults ages 50-64 and children under age 18.
  • Make poor and near-poor individuals who are now eligible under the ACA’s Medicaid expansion pay much more in out-of-pocket medical costs for individual market coverage, which they’re won’t likely be able to afford.  Total annual out-of-pocket costs for such individuals, on average, would rise by nearly 15 times, from $96 to $1,429.  The share of such individuals spending more than 20 percent of their income on health care would grow from 39.6 percent under current law to 57 percent in 2018.
  • Substantially raise premiums and the overall out-of-pocket medical cost burden for the near-elderly.  While younger adults’ premiums would fall, 2018 premiums for adults ages 50-64 would rise, on average, by more than 78 percent, and their total out-of-pocket costs would increase by nearly 69 percent.  The share of non-elderly adults spending more than one-fifth of their income on out-of-pocket health costs would more than triple, from 18.1 percent under current law to 59.5 percent.
  • Force most low- and moderate-income families now eligible for marketplace subsidies to pay higher premiums.  Across all ages, the large majority of families eligible for marketplace subsidies and who purchase a Silver-level plan would pay higher premiums (while premiums for most singles under age 40 eligible for marketplace subsidies would fall).  For example, 95 percent of families of four with two 30-year-old parents would pay more, according to the RAND estimates.

Moreover, relative to current law, the increase in the number of uninsured would be much larger over the long run.  That’s because the RAND analysts estimate coverage levels only for 2018.  As a result, they find only relatively small federal funding cuts deriving from the Upton-Hatch-Burr proposal to also cap federal Medicaid funding at levels below that of current law.  As the RAND analysts note, “[b]ecause we model outcomes for 2018 (only two years past 2016), the amount of divergence between Medicaid funding levels and actual program costs will be relatively minor over this window.” 

But as we’ve explained, under the Upton-Hatch-Burr plan, states’ federal Medicaid funding shortfalls would likely grow significantly over time.  That’s because the capped federal funding would rise slower than projected increases in Medicaid spending, enlarging the cuts each year.  As a result, states would have to contribute more and more of their own funds or, more likely, use the greater flexibility they would likely receive to deeply cut eligibility, benefits, and payments to health care providers.  Millions of poor Medicaid beneficiaries would likely become uninsured or underinsured in coming years as a result.