BEYOND THE NUMBERS
House Speaker Paul Ryan and other House Republican leaders are expected to unveil a health plan this week that would repeal some or all of health reform and put a different plan in its place. Our recent blog series analyzed some of its possible elements. The plan as a whole would likely:
Increase the number of uninsured. The plan is expected to eliminate health reform’s Medicaid expansion and insurance marketplaces, so most of the 20 million adults who’ve gained coverage under health reform would lose it. Millions more who would have later gained coverage would stay uninsured. The GOP plan’s likely centerpiece would be subsidies, through a new refundable tax credit, that likely would be much smaller than health reform’s subsidies. As a result, they likely would provide only modest help in buying coverage for people who would otherwise be uninsured due to health reform’s repeal.
The plan also would almost certainly repeal health reform’s individual mandate, which would mean fewer people enrolling in coverage. And since healthier people would be those most likely to drop coverage if the individual mandate were repealed, the pool of people with coverage would become sicker on average and, thus, costlier to cover, raising premiums. The House plan consequently would likely result in higher premiums for comprehensive coverage, alongside smaller subsidies to make coverage affordable for people of modest means. This would tend to raise the number of uninsured and underinsured.
Finally, the plan would likely establish a Medicaid per capita cap that would shift substantial costs from the federal government to states. States would have to significantly boost their own Medicaid funding or, more likely, scale back eligibility, benefits, and/or payments to health care providers and plans. Those cuts could cause large numbers of beneficiaries to lose their Medicaid coverage or certain needed benefits — on top of the beneficiaries who would lose Medicaid coverage due to the repeal of Medicaid’s expansion.
Make health care less affordable. As noted, the plan would likely provide insufficient subsidies to buy decent-quality health insurance in the individual market, compared to what health reform provides. It may also eliminate health reform’s cost-sharing subsidies, which help low-income people with marketplace coverage pay their deductibles and co-payments, with little or nothing to replace them.
In addition, individual-market plans likely would have no annual limit on out-of-pocket costs and wouldn’t have to provide benefits such as maternity services and prescription drugs, since the House plan is expected to eliminate health reform’s requirement that insurers cover a set of “essential health benefits.”
Disproportionately harm vulnerable groups benefiting the most from health reform, including:
- People with pre-existing medical conditions. The plan likely would restore much of the largely unregulated individual insurance market from before health reform. Insurers could once again charge higher premiums based on people’s health status and deny coverage to those with pre-existing conditions unless they had maintained continuous coverage for an extended time. Many people would likely lose protection for pre-existing conditions — studies show that millions of Americans experience gaps in health coverage for a variety of reasons.
The plan may claim that high-risk pools would help people with pre-existing conditions. States’ experiences in experimenting with high-risk pools, however, strongly show that these pools aren’t a viable, ongoing source of coverage. High-risk pools generally haven’t been financially sustainable; they pool sick people with even sicker people — rather than pooling sick and healthy people together, as insurance does — so they tend to require large and growing amounts of state funding over time. To keep costs from spiraling out of control, states eventually had charge extremely high premiums, cut benefits, and/or cap enrollment.
- Low-income people. The plan’s financial assistance to buy individual-market coverage likely would not vary by income (as health reform’s marketplace subsidies do), so lower-income people would pay more of their income in premiums than people with higher incomes. Nor would the financial assistance likely vary by geographic region, so it often wouldn’t reflect the cost of decent-quality coverage where the beneficiary lives. Poor and near-poor people now covered under the Medicaid expansion could be hit especially hard since they generally pay little if any premiums and only modest co-payments.
The plan also likely would let states facing federal Medicaid funding cuts under a per capita cap charge premiums and other cost-sharing charges well above current federal limits that many low-income beneficiaries could have trouble affording, as well as reduce eligibility and benefits below current federal minimum requirements.
- The near-elderly. Adults aged 50-64 have seen some of the greatest gains in health coverage under health reform, but the plan would likely let individual-market insurers charge older people much higher premiums, relative to younger people, than health reform allows. And the plan’s financial assistance likely wouldn’t account for those age-based premium differences, so the near-elderly would get much less help than under health reform. Poor and near-poor older adults who’ve gained coverage under the Medicaid expansion would be at particular risk of becoming uninsured.