By: Jonah Brown
After years of campaigning against the Affordable Care Act, known either affectionately or condescendingly to most as ObamaCare, the Republicans are finally prepared to deliver on their promise to “repeal and replace” President Obama’s hallmark policy agenda item. This week, Republicans are expected to finally reveal details about their new healthcare bill. The bill will be presented by House Republicans this week, with committee votes soon to follow. While much is unknown about the final version of this bill, several leaks and draft outlines of the bill reveal a clear effort to dismantle the key elements of Obamacare while reducing the number of individuals receiving coverage.
Here’s what we can expect to hear when the bill is finally unveiled:
The Republican Plan will cover far less individuals than Obamacare.
In fact, early reports from the Congressional Budget Office estimate that 10-20 million people could lose “employer” coverage under the Republican plan. The plan is expected to eliminate the federal reimbursement for states’ Medicaid expansion. This Medicaid expansion provided for government subsidies to states who elected to receive the subsidy, to expand the Medicaid program. States like Kentucky built largely successful programs around the Medicaid expansion, with the help of these federal dollars.
The Republican Plan will eliminate the individual mandate.
One of the hallmarks of the Affordable Care Act was its individual mandate, the provision that required each individual to obtain health insurance through their employer, through private insurance, or through a state-sponsored plan. Those who failed to obtain coverage would pay a tax of $675 or 2.5% of their annual income, whichever is higher. The mandate was created to address the free-rider problem that has made health care reform so problematic in this country. Without the individual mandate, Individuals could opt out of insurance coverage, but would still burden taxpayers in the event of emergency situations which require medical treatment.
Under the Republican plan, the mandate will be eliminated, meaning that millions of Americans will no longer be required to purchase their own health plans. Republicans laud this change in the name of liberty, but have yet to address the free rider problem in any of their proposals.
The Republican Plan will favor healthy and wealthy, over the sick and poor.
The subsidies under Obamacare took into account the enrollee’s income as well as the cost of coverage in their areas. The Republican plan will likely provide less financial assistance to individuals, particularly low-income individuals and families. The Affordable Care Act provided tax credits to individuals based on income, with low-income individuals and families receiving larger tax credits to pay for insurance. Under the new plan, Republicans want to reduce the amount of tax credits that low-income individuals receive, opting instead to provide tax credits based on age, with older people receiving more money. It will also repeal the Medicaid expansion that has been used to cover nearly 11 million people.
The result of this is simple – young people, low-income individuals, and people who are less healthy will receive less tax credits than they do now – likely not enough to afford the coverage they need. This result is not lost on Republicans, however, with many arguing that such tax credits for people with low incomes creates a disincentive to work. In fact, some Republicans have celebrated the idea of less citizens having health insurance. Rep. Michael Burgess (R-Texas), chairman of the Energy and Commerce Health Subcommittee recently commented that “if the numbers drop, I would say that’s a good thing, because we’ve restored personal liberty in this country.”
The Republican Plan will still cover pre-existing conditions…sort of.
The GOP proposal expected to be laid out this week is expected to maintain the protection of coverage for individuals with pre-existing conditions. However, the plan will allow insurance companies to charge up to 130% of an insurance plan’s annual premium for individuals who experience a lapse in coverage. This penalty is expected to be in effect for one year, and instead of being enforced by the government, would be enforced by the insurers.
The Republican Plan will eliminate the mandate of coverage for essential health benefits.
Under the Affordable Care Act, the federal government required that insurance plans cover a minimum set of ten healthcare services like emergency and ambulatory services, prescription drugs, maternity care, pediatric services, and preventive services such as physicals, immunizations and screenings for cancer and other chronic illnesses. The Republican plan is expected to try and drive down the costs of the plans by repealing these requirements, and instead allowing each state to decide which benefits their plans should offer.
This proposal is problematic for various reasons: 1) Insurers are likely to design plans that cost exactly the same amount as the tax credit, but without the same coverage enrollees currently have, 2) Without the government mandate, the free rider problem means that taxpayers will still pay for those who aren’t covered for the essential benefits that don’t make the list, and most importantly 3) Enrollees will potentially be denied vital benefits that they currently receive.
There are still plenty of questions about the GOP plan, and it’s unclear how many of the provisions above will be present in the House and Senate versions of the bill. There is even more uncertainty about the role the White House has taken in the creation of the forthcoming proposal and whether the President supports the provisions above. But its crystal clear that the repeal of Obamacare will be one of the lasting consequences of the 2016 election, and that Americans will soon feel the full effect of the Republicans efforts to roll back the progress made by the previous administration.