If you carve a huge chunk of revenue out of Obamacare and shift more subsidies to the middle class it should not be a surprise that the lower income will pay the price
The Congressional Budget Office (CBO) has estimated that 14 million of people would lose coverage in 2018, 21 million in 2020, and 24 million in 2026 if the House Republican plan is allowed to significantly amend the Affordable Health Care Act (Obamacare).
- The House Republican plan would generally increase premium subsidies for the working and middle class (see chart below). Where Obamacare tended to dramatically increase people’s premiums and give working and middle class consumers comparatively little or no subsidy support to pay for them, the House Republican plan would provide subsidies for many more people—for individuals up to $75,000 a year and families up to $150,000, and slowly phasing down after these levels.
- Republicans would spend $15 billion over five years creating a stabilization fund for consumers and insurers in the individual health insurance market and another $5 billion to support the uninsured in states that did not expand their Medicaid programs.
- Republicans would eliminate the Obamacare cuts to hospitals for Disproportionate Share Hospital (DSH) payments.
- Republicans would eliminate all of the many tax increases in the Obamacare law that went toward paying for it. Two of those taxes impacted higher income families––a Medicare tax surcharge and higher capital gains taxes. According to the non-partisan Congressional Joint Committee on Taxation, for individuals making annual incomes of more than $200,000 the elimination of Obamacare’s extra Medicare tax and the higher capital gains tax would provide $274 billion over ten years in relief.
- They cap Medicaid enrollment beginning in 2020 and then begin to phase-out the Obamacare Medicaid expansion after that by not allowing any new enrollments.
- They move the funding of the Medicaid program to a per capita allotment formula using 2016 as the base year for calculating a particular state’s payments and then increasing that in future years by the medical care component of the consumer price index. Currently, the states receive federal payments based upon their actual cost increases—a level almost always higher than the increase in the medical CPI—meaning there will almost certainly be less money for the states in future years.
- They replace the Obamacare individual market premium subsidies, which favored lower income people, with flat age-based credits. At the lower income levels, these premium credits would generally be much less than the support Obamacare now provides:
Republicans argue that their less regulated individual health insurance market will provide cheaper plans than Obamacare currently provides meaning consumers won’t need the higher Obamacare subsidies.
- Republicans are proposing the repeal of the individual mandate fines/taxes for those who don’t have coverage.
- They are replacing the individual mandate with a paltry 30% surcharge for 12 months on anyone signing up for insurance after they become sick.
The House Republican plan does a much better job than Obamacare in providing health insurance to the working and middle class. But it does a much worse job in affording access to affordable health insurance to those with low incomes.
Obamacare was a massive transfer of wealth from the better off to those with low incomes––and was very unpopular amongst the middle class because of that. The House Republican plan is just shifting much of that from the Democratic base back to the Republican base. If it becomes law, we’ll just have a different group of people upset.
It would be nice if we could have a health insurance reform plan a consensus of the people could appreciate.