The headline findings in the Congressional Budget Office’s analysis of the
But in its fine print, the CBO report identified at least seven other ways the GOP proposal would damage the U.S. healthcare system. Some would have effects reaching far beyond the middle- and low-income buyers of insurance on the individual market who are the Affordable Care Act's chief beneficiaries.
1. Shopping for health insurance will become tremendously more complicated. The Affordable Care Act standardized individual policies into four tiers based on "actuarial value" — the percentage of medical care costs covered by the insurer, ranging from bronze (60% actuarial value), silver (70%), gold (80%) and platinum (90%). This simplification allows buyers to compare plans on price alone, since within each tier every plan must offer roughly the same coverage. Insurers are required to offer at least one silver and one gold plan to participate in the individual marketplaces.
The rules didn’t entirely eliminate the complexity of shopping, since insurers can meet their actuarial value requirements by adjusting premiums or deductibles, or both. But they helped. The Republicans’
2. Individual insurance plans will tend to offer skimpier benefits. By repealing the actuarial value rules, the GOP proposal removes the lower boundary of plan quality, at least to an extent.
Because the measure leaves in place the ACA's mandate that all plans offer a roster of minimum essential benefits, including maternity, hospital coverage and mental health services, the CBO feels that insurers will be hard-pressed to offer plans with actuarial values below 60%. But it expects health plans to drift down toward the lowest possible value. Such plans would attract younger, healthier buyers because of their lower costs. But insurers would tend to avoid offering high actuarial value plans "out of a fear of attracting a greater proportion of less healthy enrollees."
David Anderson of Duke believes that insurers could probably fashion plans with actuarial values as low as 55%; lower-value plans will effectively become the standard. "It will be very hard for people to buy a non-bronze plan because insurers won't offer them except at exorbitant prices," he writes. The bottom line: a drift toward lower-quality health insurance.
3. Out-of-pocket costs will be much higher. With low premiums becoming the key lure for buyers, insurers will tend to raise deductibles and co-pays. These consequently will "tend to be higher than those anticipated under current law" (that is, Obamacare), the CBO forecasts.
Another blow will be the GOP plan's repeal of Obamacare's cost-sharing subsidies, starting in 2020, which go to especially low-income households. About 57% of all buyers on the individual market receive those subsidies, so the repeal of this provision will hit about 5 million Americans hard.
4. Employer-sponsored insurance might start to disappear. Before the passage of the Affordable Care Act, the CBO projected that it would trigger a decline in employer-sponsored insurance, which covers about half of all Americans. That didn't happen to the extent the CBO expected, but it calculates now that the GOP proposal might do the job. That's because the GOP bill repeals the penalties for individuals and companies above a certain size that don't carry coverage.
The analysis projects that because of these reduced incentives, 2 million Americans would lose or drop out of employer-sponsored coverage by 2020, and 7 million by 2026. The CBO notes further that, since the GOP proposal provides premium subsidies to Americans with higher incomes than are eligible under Obamacare, some better-paid employees might forgo their employer plans and buy coverage on the individual market. Two countervailing factors exist, however: Although subsidies would be available to higher-income workers, on the whole they'd be skimpier than the ACA's; and the quality of insurance outside the employer-based market might be lower than what's available on the job.
5. A key program promoting public health will be axed. The GOP plan kills the Prevention and Public Health Fund as of 2019, saving $9 billion. The loss to public health will be incalculable.
The fund is a linchpin of the budget of the
For some reason, Republicans have had the knives out for the Prevention and Public Health Fund for years. In 2010, a
In fact, as health economist Harold Pollack observed at the time, the fund "serves critical, but often politically marginal constituencies."
6. Patients of Planned Parenthood clinics would be cast adrift. The GOP proposal would cut all federal funding for Planned Parenthood for a year following its enactment, though it seems likely that the cutoff would be renewed year by year as long as the Republicans hold the House, Senate and White House.
The victims of this provision would be almost entirely low-income residents of areas already starved of clinics and doctors, especially rural areas. The CBO expects that about 15% of those residents would lose access to healthcare.
Since the services most affected would be those that "help women avert pregnancies," the CBO paints this provision as the essence of cutting off one's nose to spite one's face. Births among the target population would rise by "several thousand." That would increase costs for Medicaid, which pays for about 45% of all births. Moreover, some of the newborn children would themselves be eligible for Medicaid. The program would face $77 million in increased costs over 10 years, the CBO estimates. Since the GOP is also aiming to cut Medicaid funding, many of those mothers and children would lose access to healthcare entirely.
7. The continuous coverage rule would drive 2 million people out of the market and make the overall insurance pool sicker. One of the GOP plan's most perverse provisions is the "continuous coverage" rule, which penalizes those who allow their insurance to lapse for more than 63 days during a year. They're hit with a 30% surcharge for up to a year, once they do sign up.
The rule is ostensibly designed to encourage everyone to carry coverage, but would have the opposite effect, encouraging healthy Americans to put off buying insurance until they fall ill. The CBO estimates that 2 million fewer people would buy insurance each year; judging that the 30% penalty is manageable, they'd choose to roll the dice.
In sum, then, the GOP's American Health Care Act would not only roll back all the gains in insurance coverage notched by the ACA over the last four years, but would make millions of Americans poorer and sicker. It's not a return to the health insurance landscape that existed before the ACA's enactment in 2010, but a voyage into an immeasurably more dismal, and unhealthier, world.