BEYOND THE NUMBERS
What’s striking about the vague health plan that three key House Republicans — Education and Workforce Committee Chairman John Kline, Ways and Means Committee Chairman Paul Ryan, and Energy and Commerce Committee Chairman Fred Upton — outlined yesterday isn’t just the lack of critical details, but their language in describing it. They imply that their plan will offer certain features that the Affordable Care Act (ACA) doesn’t when, in fact, the ACA already provides these benefits — and, in most cases, much more so than their plan likely would. This suggests they recognize that many ACA elements are actually quite popular, including:
- Allowing people to choose from a range of plans that fit their needs and budgets and having insurers compete for their business. The ACA’s federal- and state-based marketplaces do just that. They allow individuals and families to choose from an array of plans with differing levels of coverage, with multiple insurers participating in virtually every state. Marketplace subsidy amounts are based on premiums for a benchmark plan, encouraging insurers to compete based on price as well as other factors.
- Helping people who have to buy coverage on their own to afford it. Under health reform, people with incomes between 100 and 400 percent of the poverty line who lack access to other health coverage can get tax credits to help pay the premiums for marketplace coverage. People with incomes below 250 percent of poverty also receive help with deductibles and other cost-sharing. It’s far from clear that Chairmen Kline, Ryan, and Upton would offer comparable subsidies that limit premiums to specified percentages of income for people below 400 percent of poverty, as the ACA does. And their op-ed is silent on whether they will offer any help with deductibles and cost-sharing.
- Providing tax credits that are advanceable, refundable, and adjusted for age. That’s exactly how the marketplace tax credits work today. They go directly to the insurer on behalf of an eligible individual (though people can elect to get the credit instead when they file their taxes). They are refundable; that is, their value isn’t limited by what people owe in federal income tax. And they’re adjusted to account for differences in premiums based on age. Under the ACA, insurers can charge older people no more than three times what they charge younger people; the premium credits ensure that, whatever your age, if you are below 400 percent of poverty, your share of the premium charges cannot exceed specified modest percentages of income. We are very skeptical that Chairmen Kline, Ryan, and Upton will offer anything comparable.
- Providing safeguards for consumers. Chairmen Kline, Ryan, and Upton say they would let adult children to stay on their parents’ plan up to age 26 and would prohibit insurers from imposing lifetime limits on coverage. They also would “protect people with existing conditions” but don’t specify how. The ACA, however, requires much more in consumer protections and market reforms. For example, it prohibits insurers in the individual market from denying coverage to people with pre-existing conditions, charging people in poorer health higher premiums than healthy people, charging women more than men, or setting lifetime or annual dollar limits on coverage. As noted, insurers can’t charge older people more than three times what they charge younger people, and they must set an annual limit on total out-of-pocket costs for covered services. In addition, they can’t charge cost-sharing for preventive care and can’t have big gaps in their coverage, such as not covering prescription drugs or maternity care (as often occurred in the pre-health-reform individual market). In contrast, the Kline-Ryan-Upton plan apparently has no standards for benefits and cost-sharing charges, and their op-ed says nothing about limiting insurers’ ability to set annual dollar limits on coverage or charge higher premiums to women and older people.
The Kline-Ryan-Upton plan would likely make coverage less affordable for millions of Americans, particularly those who are older and in poorer-than-average health, thereby increasing the ranks of the uninsured and underinsured. It wouldn’t come close to achieving the benefits that the ACA provides today.