Putting the Republicans’ Health Plan on the Obamacare Scale
Senator John Cornyn of Texas, the No. 2 Senate Republican, said this week that “deductibles are unaffordable.” Many consumers, required to pay deductibles of more than $10,000 a year for family coverage, agree.
THE REPUBLICAN ANSWER Legislation drafted by House Republican leaders and approved by two House committees could make the situation worse. Consumers’ out-of-pocket costs, including deductibles, “would tend to be higher than those anticipated under current law,” the budget office said, and it gave two reasons.
The bill would repeal a provision of the Affordable Care Act that requires health plans to cover specific percentages of the total cost of covered services for a typical population. Without this requirement, the budget office said, insurers could sell less-generous plans with a lower “actuarial value,” meaning that consumers would pay more of the cost.
In addition, it noted, in 2020, the House bill would repeal “cost-sharing subsidies” that now help more than six million low-income people pay deductibles and other out-of-pocket costs.
The House Republican bill creates incentives for people to set aside money in tax-favored health savings accounts, which can be used to pay medical expenses. To get the benefits of such an account, taxpayers must have a high-deductible health plan. They would also have to have money to save at the end of a pay period.
THE CRITICISM As evidence that the Affordable Care Act marketplaces are failing, Paul D. Ryan, the House speaker, points to some of the higher premium increases in 2017, as reported by the Obama administration: 58 percent in Alabama, 116 percent in Arizona, 69 percent in Oklahoma, 53 percent in Pennsylvania and 63 percent in Tennessee.
THE REPUBLICAN ANSWER The Congressional Budget Office said that premiums would be 15 percent to 20 percent higher under the House bill than under current law in 2018 and 2019, but would then fall, so that average premiums in 2026 would be about 10 percent lower than under current law. Under the House bill, the federal government would offer grants to the states — $100 billion from 2018 to 2026 — and they could use the money to stabilize premiums by paying some of the cost of very large claims.
But the budget office pointed to another reason premiums would decline: Insurers would be allowed to offer skimpier benefits. In the absence of federal standards, the budget office said, insurance plans would “cover a lower share of health care costs, on average.”
Republicans say this is a way to free people from the straitjacket of federal regulations. “Under Obamacare, people have been forced to buy insurance plans they don’t want and can’t afford,” said Senator John Barrasso, Republican of Wyoming.
Under the House bill, the budget office said, premiums would tend to rise for older people and decline for younger people. By 2026, it said, premiums “would be 20 percent to 25 percent lower for a 21-year-old and 8 percent to 10 percent lower for a 40-year-old — but 20 percent to 25 percent higher for a 64-year-old.”
AARP, the lobby for older Americans, is campaigning against the bill.
Under the House bill, the government would provide tax credits to help people buy insurance. But, the budget office said, the average federal subsidy would be “significantly lower” under the House bill than under the Affordable Care Act — about 50 percent lower by 2026.
In addition, it said, the amount of financial assistance would not vary by region, so “people living in high-cost areas would be responsible for a larger share of the premium.”
THE CRITICISM In many marketplaces established under the Affordable Care Act, competition is shrinking.
“One-third of the counties have only one insurer, and they’re losing them fast,” Mr. Trump said in his address to Congress on Feb. 28. “They are losing them so fast. They’re leaving, and many Americans have no choice at all.”
The Kaiser Family Foundation says 32 percent of counties have one insurance company on the exchange this year, up from 7 percent last year.
THE REPUBLICAN ANSWER The Congressional Budget Office said the market for people buying insurance on their own would be “relatively stable” under the House bill. “Most areas of the country would have insurers participating,” it said, and “the market would not be subject to an unsustainable spiral of rising premiums.”
Democrats have suggested that the House bill, by eviscerating the requirement for people to have insurance, would destabilize the market and accelerate the exodus of insurers. But the budget office said that insurers would probably continue to participate in most areas of the country because “a substantial number of relatively healthy (mostly young) people would continue to purchase insurance” with government aid.
Federal grants to the states, to stabilize insurance markets, would not only help reduce premiums, but also “encourage participation by insurers,” the budget office said.
THE CRITICISM Republicans have berated Mr. Obama as breaking his promise that “if you like your health care plan, you can keep it.” That is “one of many unfulfilled and unattainable promises of Obamacare,” said Senator Michael B. Enzi, Republican of Wyoming.
In the fall of 2013, many people were told that their health insurance plans were being canceled because they did not meet minimum standards set by the Affordable Care Act.
THE REPUBLICAN ANSWER Republicans have promised that no one who has coverage because of the Affordable Care Act will lose it. At least, they promise a smooth transition to new coverage. “We’re doing a transition period because we don’t want to pull the rug out from under anybody,” Speaker Ryan said.
But the Congressional Budget Office said the House bill would disrupt coverage for many people. Just next year, it said, the number of people without health insurance would increase by 14 million, to a total of 41 million.
The House bill would sharply reduce federal funds provided to states for the expansion of Medicaid under the Affordable Care Act. Faced with the loss of money, the budget office said, some states would voluntarily terminate coverage for some of the new beneficiaries. Other states have laws that require them to eliminate the expansion of Medicaid if the federal government reduces its financial contribution below the levels promised in the 2010 health law.
“It’s clear that the rug will be pulled out — in some states more quickly than in others,” said Joan C. Alker, director of the Center for Children and Families at Georgetown University.
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