By Trudy Lieberman, Rural Health News Service
How Changes in the Affordable Care Act Could Affect You
Republican efforts to repeal and replace Obamacare are getting lots of media attention. But like most reporting on major issues, the coverage is about who’s up, who’s down, who wins, and who loses. Explanations of how proposals will affect people will get short shrift. I’ve heard from readers complaining about Obamacare and from some who praised it. This column will tackle some of those concerns and explain the potential effects of the legislation that has so far been okayed by two Congressional committees.
The bill that may reach the president could be very different in specifics, but the primary goal – to reduce government healthcare spending and encourage more personal responsibility in choosing healthcare arrangements – is not likely to change. Will I continue to receive subsidies? Like Obamacare, Republican proposals call for tax credits to help people buy coverage, but there are significant differences. Obamacare policies are pegged to income with those at the bottom of the income scale getting larger credits. Those credits get smaller as income rises and phase out when families and individuals have incomes greater than 400 percent of the federal poverty level. (This year that’s $97,000 for a family of four and $47,000 for individuals.)
The GOP proposal ties credits to age: individuals under 30 would receive a $2,000 credit with the amount gradually rising until someone age 60 and older can receive a $4,000 credit. The credit phases out for individuals with incomes of $75,000 and for families filing joint returns with income of $150,000. Each family member can receive a credit, but a maximum of five people in one family can get a credit of up to $14,000. Credits don’t take into account regional differences in medical costs. A credit for a family living in a low-cost area in the Midwest would be the same for a family living in high-cost city like Los Angeles.
Credits also may not be worth as much to older people even though their dollar amount may be greater. Why? Currently insurers can charge an older person three times more than a younger person for the same policy. Under Trumpcare, they can charge five times more. An analysis just released by the consulting firm Oliver Wyman found that Republican tax credits would have a major impact in rural areas where insurance premiums now are often higher and people are older and poorer. A larger proportion of people may do worse. Jeanne Lambrew, a senior fellow at The Century Foundation, says large premium increases could also cause a disproportionate number of healthy rural Americans to drop coverage potentially causing insurance markets in rural areas to unravel.
Will coverage for pre-existing conditions continue? Proposals still require insurers to cover people no matter how sick they are. But if people let their insurance lapse for 63 days, they will have to pay a 30 percent penalty when they buy a new policy. Will I have more choice of more insurers? Today consumers in one-third of all U.S. counties have a choice of only one Obamacare insurer, and if they want to use their tax credits, they must buy from the sole insurer. Under GOP plans people may have more choice because they can use their tax credits to buy any policy an insurer wants to sell, but they can’t use them to buy abortion coverage. Under Obamacare the value of the plans is standardized; for example, all silver plans must cover 70 percent of someone’s costs. But such standardization would disappear under the new law making it difficult to shop.
Will I have to pay for benefits I don’t need? The ACA calls for an essential benefit package so insurers could not exclude services like mental health treatment and maternity care. For now the GOP plan continues the essential benefits, but that could change. What about rising premiums and higher cost sharing? Premiums, deductibles, and other cost sharing will continue to rise because medical inflation continues to rise. Neither Obamacare nor Republican proposals include serious provisions for containing costs. Although limits on out-of- pocket spending would continue, those limits increase each year, causing families to pay higher and higher amounts out of pocket.
Will anyone lose coverage? Those who gained coverage under Medicaid expansion in their states may lose benefits. Young adults can remain on their parents’ plans until they turn 26, but Obamacare’s individual mandate would be gone. Its purpose: to prevent people from gaming the system by buying insurance only when they needed it and dropping it when they didn’t. It didn’t always work well. It’s not clear the GOP’s idea of making people pay a 30 percent penalty when they return to the market will work any better.
Health and Human Services Secretary Tom Price has promised, “Nobody will be worse off financially.” Not everyone agrees. Washington and Lee law professor emeritus Timothy Jost says younger and wealthier people in low-cost areas will be better off than they were under Obamacare. Older and poorer people living in high-cost areas will be worse off.
Will you be better or worse off under the Republican plan? Write to Trudy at firstname.lastname@example.org.