“Everyone” with a pre-existing condition will keep coverage.
After the AHCA was yanked from the floor in March, a prominent GOP moderate got together with a hardline conservative to hash out a compromise proposal that would allow states to waive certain mandates in a way the would effectively allow insurers to price sick people out the market entirely. The change spooked rank-and-file members, who had promised not to weaken protections for pre-existing conditions.
Days later — after $8 billion dollars was added to the bill to subsidize coverage for people with pre-existing conditions in states that gutted their protections in the individual market—GOP leaders claimed they had solved the problem, and made blanket statements that every single person covered under Obamacare today will be able to maintain affordable insurance.
— Kyle Griffin (@kylegriffin1) May 5, 2017
The bill, however, will allow states to apply for waivers to Obamacare’s community rating rule, which limits how much insurers can charge people with pre-existing conditions. If they get a waiver—which the text of the bill indicates will be very easy—people with anything in their medical file from a C-section to congenital heart disease could be priced out of the market altogether.
Some lawmakers were more honest about this possibility, telling reporters states should have the right to gut these protections, and people should just move to another state if they have to.
Yet many lawmakers claimed the high-risk pools set up by the legislation for people with pre-existing conditions will provide adequate coverage for everyone in every state—despite the fact that the bill provides far less funding than experts say is necessary to cover this population.
“Nobody” on Medicaid will lose coverage.
On the day of the vote, House Majority Leader Kevin McCarthy (R-CA) told CNN: “Nobody on Medicaid is going to be taken away.”
But the math speaks for itself: the bill will slash $880 billion in funding to Medicaid over the next 10 years, the Congressional Budget Office found.
How those cuts will affect enrollees is multifaceted. The CBO predicted that 14 million fewer Americans would be receiving Medicaid under the law, a decrease of enrollment of 17 percent. This finding was partly because the American Health Care Act will phase out the match rate for the expansion program—which raised the eligibility cut-off to those making as much as 138 percent of the federal poverty line—by imposing a “freeze” on enrollment in 2020.
The cuts grow more devastating in the long-term, with the transformation of the Medicaid program from an unlimited match rate to a per capita cap system, meaning that states would get a fixed amount of funding per enrollee. In theory, this means that federal funding would rise with every additional enrollee participating in the program. But because the metric that the bill uses to increase the capped amounts rises more slowly than average Medicaid spending, over time states will be taking on a bigger share of the burden and are anticipated to turn to premium sharing, copays or other obstacles that shrink costs while impeding access to the program.
Furthermore, the bill would allow states to no longer be required to consider schools as Medicaid-eligible providers, a New York Times report found. That means the $4 billion in Medicaid reimbursements schools are said to receive — much of it going to caring for children with special education needs — would be vulnerable to cuts.
McCarthy’s statement can only be considered accurate if it is assessed on the most technical of levels. Anyone who is on the program by 2020 won’t be kicked off automatically while the cuts are implemented. But there’s more churn in Medicaid enrollment than this characterization recognizes. If a person leaves Medicaid because he or she got a job or other access to health care, he or she will face taller obstacles to get back on if needed due to the changes the Republican bill will make to the program.
People will have “much lower” deductibles.
President Donald Trump tweeted days before the vote: “The healthcare plan is on its way. Will have much lower premiums & deductibles while at the same time taking care of pre-existing conditions!”
Trump, who has repeatedly bashed the Affordable Care Act for increases in deductibles, is wrong. The American Health Care Act will raise average deductibles even higher.
According to an analysis by the Kaiser Family Foundation done for Axios, deductibles for a typical health insurance plan under the GOP legislation would raise by $1,550 — from $2,550 under Obamacare to $4,100 — in 2017.
That is because the Republican bill incentivizes a shift to stingier — albeit cheaper, premium-wise — plans. The CBO said that insurance plans under the Republican legislation would cover an average of 65 percent of person’s medical costs, versus an Obamacare plan’s average actuarial value of 72 percent.
The bill will only impact a “very narrow band” of people.
Republicans have repeatedly played down the number of people their bill would affect, by stressing that many of the changes would apply only to the a relatively small number of people.
“Remember this is only the individual market,” Rep. Greg Walden (R-OR) told reporters last week when asked about the impacts of the bill. “It’s a very narrow band here.”
But Americans who receive their insurance through their employer — nearly 156 million people, or about half of the country — are also vulnerable to seeing the Affordable Care Act’s consumer protections rolled back for them.
Though the waivers available to states under the GOP bill would apply to the individual and small group market, many of the Affordable Care Act’s market reforms cover both large employer and individual plans, and cracks in the floor of protections in the individual market have a ripple effect.
For instance, it is possible the annual and lifetime caps in employer plans could be brought back under the GOP bill because the ACA’s ban on them is based on a state’s essential health benefits standards. If a state received a waiver to eliminate, say maternity coverage, from the essential health benefits, then employer plans could reintroduce caps on that coverage.
Due to some quirks in the regulatory language, if just one state seeks a waiver, consumers in employer plans everywhere, would be at risk.
Additionally, the GOP bill drops the employer mandate, meaning some workplaces might just drop their health benefits entirely. While it is expected many employers will continue to offer benefits— particularly those in high-income industries that will want to stay competitive for recruiting — it is feared some employers, such as those in the retail or small businesses, will be inclined drop their coverage offerings. The CBO, citing also the structure of AHCA’s tax credits, predicted that “over time, fewer employers would offer health insurance because the legislation would change their incentives to do so.”
Obamacare is in “crisis.”
Moments before the vote, as House Speaker Paul Ryan (R-WI) rallied his troops, he repeated one of the biggest and most common falsehoods Republicans have trotted out in their effort to kill Obamacare: that the law is collapsing on its own and the GOP needs to put it out of its misery for the good of the country.
“This is not a choice. This is a crisis,” Ryan practically shouted, pointing to news last week that the majority of Iowa’s counties would be left without any insurer on the individual market.
Yet the non-partisan Congressional Budget Office found in its March report that “the nongroup market would probably be stable in most areas” if Obamacare remains in place. Another report by S&P Global late last year predicted that: “For 2017, we expect continued improvement, with more insurers reporting close to break-even or better results for this segment.”
Yes, insurers are dropping out of Obamacare exchanges in some states, but to blame that solely on the law is an oversimplification. Rural areas where exchanges have struggled have long had issues that continue to impact the marketplaces, and some states like Iowa and Tennessee have had very specific problems that have undermined the Affordable Care Act’s effectiveness.
Then there is the damaging uncertainty caused by the Trump administration’s refusal to commit to keep paying key subsidies to insurance companies and their inability to say whether or not they will continue to enforce Obamacare’s individual mandate. The White House’s decision to pull all advertising during the final crucial week of open enrollment in March also depressed sign ups by nearly half a million people compared to the same period last year.
In short, the administration is saying “Obamacare will explode” while taking steps to make that happen.