The Republican plan to replace major tenets of the Affordable Care Act would reduce the federal deficit by $337 billion over 10 years, according to new numbers from the nonpartisan Congressional Budget Office.
In that scenario, 24 million people would lose their health insurance, bringing the uninsured rate back up to nearly what it was before the Affordable Care Act. The White House has disputed these numbers.
“It’s going to be a hard political thing to move forward without addressing that loss of coverage,” said Joe Bottani, president of the St. Louis Association of Health Underwriters. “You’re alienating a lot of people that vote.”
The GOP plan is designed to pass through the budget reconciliation process, which allows Republicans to avoid a filibuster from Senate Democrats. As such, the bills are restricted to budget issues. Rules to protect people with pre-existing conditions and requirements for minimum levels of coverage will likely stay.
Following the release of the report Monday, President Donald Trump called the fight over the legislation a “big, fat, beautiful negotiation.”
Premiums up for older people, down for younger
The Affordable Care Act forbids insurance companies from charging older clients more than three times what the youngest enrollees pay. Under the GOP proposal, older people can be charged five times as much.
“Basically, you’re setting up winners and losers. Younger are going to benefit. Older are going to pay more,” Bottani said. “They’re not going to be able to afford those premiums.”
When older, sicker people leave the insurance pool, premiums go down for the people who remain, Bottani said. The effect could be felt more quickly in rural counties with a higher share of older residents.
“If they don’t have coverage they’re going to end up as those unpaid medical bills that get kicked back to everyone else,” Bottani said. “They’re going to get kicked off the insurance company’s rolls, but they’re still going to end up in a hospital.”
The Republican plan restructures the Affordable Care Act’s subsidies to help people buy health coverage. They would become tax credits instead of premium subsidies, and would be tied to age not income.
Medicaid expansion phase-out back in Illinois
According to the CBO report, the majority of cost savings under the Republican proposal would be from a swift phase-out of Medicaid expansion.
Missouri legislators voted against expanding the program to people who make less than 133 percent of the federal poverty level, and Illinois voted in favor. That means St. Louis-area health providers on the east side of the river could quickly see higher numbers of uninsured patients.
Although the GOP plan allows people currently enrolled in Medicaid to stay in the program, they would not be able to re-enroll.
“There’s some estimates that 50 percent of people go on and off of the program in a given year,” said health economist Tim McBride, who chairs an oversight committee for Missouri’s Medicaid program. “So then the question is, what’s the state going to do when they get less federal match (funding)?”
How much does it save?
The big number is $337 billion. That’s how much the law would reduce the federal deficit over 10 years. (For scale, the U.S. has spent about $805 billion on the Iraq war since 2001, according to a Brown University analysis.)
The bill reduces federal spending by $1.2 trillion, but cost savings are offset by a repeal of several taxes introduced by the Affordable Care Act. Those include the individual mandate, which penalized people for not having health coverage, a payroll tax for high-income earners, and industry-specific taxes on medical devices and tanning.
The CBO warned that the macroeconomic effects of the legislation could not be identified, “because of the very short time available to prepare this cost estimate.”
Macroeconomic effects include hospitals losing money, or job losses due to industry change, McBride said.
“Places that are going to lose insured people, they’re going to have less money flow into health care system. And then there will be fewer jobs and fewer revenues for health providers,” McBride said. “The flip side is you get a tax cut for people.”
Republican leaders spent Tuesday trying to rally support for their plan. The House Budget Committee has scheduled the bill for markup Thursday.
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