BEYOND THE NUMBERS
GOP Health Plan Would Block Most New Yorkers, Californians From Using Subsidies to Help Pay for Their Current Health Plans
The emerging House Republican health plan, on which the House may vote this week, would substantially limit the ability of New Yorkers and Californians to use tax credits to help pay for health coverage, beginning in 2018. Nearly a million people in these states would be unable to keep the tax credits for their current plans, and hundreds of thousands more could be forced to choose between paying full price to enroll in the plan that best meets their needs or claiming tax credits for a plan with a less appropriate network, cost sharing, or other features.
That’s because the Republican plan prohibits individuals from using their subsidies to pay for plans that cover abortions (unless such coverage is limited to abortions following rape or incest, or abortions that are necessary to save the woman’s life). California and New York both require insurance plans to include abortion coverage.
In California, state law (the Knox Keene Act) includes abortion among the basic health services that all individual and small-group plans must cover. Moreover, courts since 1981 have interpreted the state’s constitution as requiring neutral treatment of pregnancy and abortion coverage; if pregnancy is covered, abortion must also be covered. New York prohibits excluding or limiting coverage by type of medical condition and requires insurance policies that include medical or surgical care to also cover abortion. (A recent proposed regulation would make this requirement more explicit and require coverage without copays, coinsurance, or a separate deductible.)
The Affordable Care Act (ACA) doesn’t prohibit using premium tax credits to help pay for plans that cover abortion, but does prohibit insurers from applying federal premium or cost-sharing subsidies toward those services. Insurers that offer plans covering abortion use an accounting mechanism to segregate the private funds that may be used to pay for abortion services from the public funds that may not. The pending House legislation, however, takes a radically different course — it prohibits the use of federal subsidies for any plan that covers abortion even if none of the cost of abortion services is paid for with public funds.
This restriction would mean that people eligible for tax credits wouldn’t be able to use them for most plans currently offered in New York and California’s insurance markets. In New York, the restriction could eliminate a dozen issuers from subsidy eligibility, to the benefit of one insurer in the state that denies abortion coverage (because it qualifies for a religious exemption from the abortion-coverage requirement). People in New York and California might also be able to enroll in a “multi-state plan” established under the ACA; that plan is available to marketplace consumers, under contract with the federal government, and doesn’t include abortion coverage. But the majority of people across the two states have chosen other plans, presumably because those plans better meet their and their families’ needs. Under the House bills, these people would be barred from using tax credits to continue their current coverage, despite GOP claims to be increasing consumer choice.
Limiting tax credits in this manner would create major inequities across states, with consumers in California and New York either losing billions of dollars in federal financial assistance or being forced to drop their current health plans — and often their doctors and other health providers — to enroll in a plan that doesn’t meet their needs as well and isn’t the plan they want to choose. At a time when Republicans are bemoaning the lack of insurance choices and seeking additional state flexibility, this provision would lessen both.