President-elect Trump’s choice for Health and Human Services Secretary, Rep. Tom Price, authored a bill that would repeal the Affordable Care Act (ACA) and replace it with a system likely leaving up to 20 million uninsured, according to a new report.
The Center on Budget and Policy Priorities analyzed the Empowering Patients First Act (H.R. 2300) (https://goo.gl/RvpMiP) Price offered while House Budget Committee Chairman. The bill offers a blueprint for any ACA replacement plan, CBPP said.
The Price plan would repeal the ACA and replace it with highly inadequate financial help to enable families and individuals to buy health coverage. Like other Republican congressional health plans, it would repeal insurance for the millions who have gained coverage under the ACA, the report said.
The plan would eliminate the ACA market reforms guaranteeing that a broad array of people — including those with pre-existing health conditions — can buy insurance that meets minimum coverage standards in the individual and small-group private health insurance markets, the report said. Those markets would effectively revert to pre-ACA rules, meaning, among other things, that insurers could once again:
- Charge higher premiums to people who have health conditions, are women, or for another reason such as their industry or profession;
- Drop or severely limit benefits such as maternity care and prescription drugs, which they now must cover as “essential health benefits”;
- Reinstate annual and lifetime limits on their reimbursements for an enrollee’s health care costs; and
- Charge deductibles, co-insurance, and co-payments without limits.
Undo Tax Credits
Under the ACA, people with low or modest incomes can receive premium tax credits to help defray the cost of private coverage they buy through the marketplaces. The Price plan would replace the ACA credit, which is based on family income, with a modest tax subsidy that varies by age — not by income. As a result, lower-income people would have to pay a much greater share of their income on premiums than they do now — and a greater share than people with modestly higher incomes would pay. The poor and near-poor who now qualify for coverage under the ACA’s Medicaid expansion (which the Price plan would repeal) and generally pay little if any premiums now would be hit especially hard, and many of them would likely end up uninsured, the report said.
Moreover, unlike under the ACA, the credit wouldn’t be based on what decent-quality coverage costs where the recipient lives; it would be uniform nationally. It wouldn’t adjust for the higher premiums that people in poorer health would now have to pay under the Price plan. Nor would it fully account for differences in people’s premiums based on their age, as insurers in the individual market could charge older people much more, relative to younger people, than under the ACA, the report said.
The ACA prohibits insurers from denying coverage to people with pre-existing health conditions, charging them higher premiums, or refusing to cover benefits related to a pre-existing condition. The Price plan would again allow insurers to exclude coverage of a pre-existing condition for lengthy periods of time or charge much higher premiums unless individuals had maintained continuous coverage for at least 18 months. This would protect people far less than under the ACA and only modestly more than the rules in place before the ACA, the report said.
Insurers to Sell Across State Lines
The Price plan would permit insurers to offer health plans to people or small businesses in other states, even if the plans don’t comply with the other states’ requirements. The out-of-state plans would need to comply only with consumer protections in the state where they are licensed. That would encourage insurers to seek licensure in states with very weak regulations and consumer protections and where they exert substantial political influence, the report said.
The few states that tried to open their markets to out-of-state insurers before the ACA had little to show for it, as insurers had problems establishing networks of providers outside their own states. But, if out-of-state insurers did enter other state markets to a significant degree, less healthy individuals and small businesses whose workers are older or in poorer health would likely face much higher premiums as state consumer protections and market reforms would be effectively undermined, the report said.
Out-of-state plans would mainly attract healthy people with low health care costs, since they have less need for consumer protections such as requirements to cover certain benefits or limits on insurers’ ability to charge higher premiums based on age or gender. Meanwhile, sicker-than-average people would generally remain in plans offered by in-state insurers, which would push up premiums for the in-state plans by saddling them with sicker beneficiary pools, the report said.
Info: https://goo.gl/PweK5B (report).