- Jim Bourg/Reuters
Up to 10 million Americans could lose their health insurance under the American Health Care Act (AHCA), the House GOP leadership’s plan to repeal and replace the Affordable Care Act (aka Obamacare), according to a report published on Tuesday.
In the report, S&P Global Ratings, a research arm of the credit-rating agency S&P, broke down the bill and its effect on the number of uninsured Americans, providing some clarity on one of the big questions about the legislation.
“We expect a decline in enrollment in the individual (2 million to 4 million) and Medicaid (4 million to 6 million) segments, resulting in a decline in premiums,” the S&P report read.
Together, based on the S&P estimates, the number of people without insurance could rise by 6 million to 10 million people.
The S&P broke down the AHCA’s effects on the two major markets, first focusing on the individual market for people who do not get their insurance through their employer or a government program like Medicaid or Medicare. These are the people who most likely access care through Obamacare exchanges, which have been repeatedly lampooned by Republicans.
According to the S&P, the shift from tax credits based on income and residence under the ACA to the AHCA’s block tax credit based on age would cause a number of older and poorer beneficiaries to remove themselves, since their assistance compared to their higher premiums would likely drop.
This is also partly because, as the S&P found, the “age band” from the ACA is loosened in the AHCA.
“Under the current ACA rules, an insurer is allowed to charge three times as much for a 64-year-old as for a 21-year-old. The replacement plan widens this rate band,” the report said. “The wider rate bands (5:1) will reduce premiums for the eligible younger population, while likely increasing premiums for the older population.”
Using the average premium costs for a 21-year-old and adjusting for the new band – and doing the same for a 64-year-old – the S&P estimated just how much the AHCA would affect older patients.
“The proposed tax credits of $2,000 in the replacement plan, although not covering the entire premium cost for a 21-year-old, would reduce it by almost 75%,” the report said. “The proposed $4,000 tax credit for a 64-year-old falls well short of the potential premium cost, reducing premiums by only 30%.”
The analysts expect the number of people with insurance through the individual market to drop by up to 4 million.
The AHCA would also change the way the government funds the ACA’s expansion of Medicaid. The program provides low-income earners with insurance through the government. Under Obamacare, this was extended to anyone making 138% above the federal poverty line.
The funding for the expansion came through the federal government.
Here’s the breakdown on how this would change under the AHCA, from the S&P report (emphasis added):
“The proposal also changes the financing of the expansion population. It allows new enrollees to join the expansion ranks until Dec. 31, 2019. But, after 2019 it doesn’t provide federal funding for any new eligible enrollees that aren’t already on the roles or for any current enrollee that has more than a month’s break in eligibility. This effectively puts Medicaid expansion in “run-off” after 2019. The Medicaid program enrollees generally have a lot of churn due to change in income levels. Starting 2020, even a low level of churn among the “run-off” expansion enrollees will result in a gradual decline in enrollment.”
After 2019, the number of people on the Medicaid rolls would dwindle, the report concluded, as states face a funding gap and people move off of Medicaid for various reasons.
Some Republicans have said the new plan would cover fewer people. Most GOP lawmakers have focused on “access” to coverage – rather than a guarantee that the same number of people would be covered.
This may run into some issues in the Oval Office, though, since President Trump, a supporter of the new law, has said that he wants a healthcare plan that covers “everybody.”