http://jaredbernsteinblog.com/the-house-aca-replacement-plan-will-unwind-the-coverage-gains-of-the-aca-part-1/
Much as I worried about in an extended piece from yesterday on the problems with Republicans' replacement ideas, their new bill to replace the Affordable Care Act will lead to less coverage and more cost shifting from government to moderate and low-income families.
I'm crunched for time this AM, so I'll be adding to this post throughout the day, but here are a few initial impressions:
–The bill will lead to millions losing coverage, due to the repeal of the Medicaid expansion and to lowering the subsidies available to moderate and low-income households.
–The key disconnect here is that their tax credits are no longer tied to the cost of coverage, so paying for health coverage will mean more out-of-pocket than under Obamacare. Once the CBO scores this aspect of the plan, along with Medicaid part I note next, I suspect we'll see large coverage losses, likely fully unwinding the 20 million coverage gains under the ACA.
–As I wrote yesterday, Republicans turn Medicaid financing into a "per-capita cap," a type of block grant. Instead of receiving the federal financing they need to pay for anyone eligible for Medicaid, the per-person cap is a fixed allotment that grows at the rate of inflation plus 1 percent. To their credit, House Republicans index the per-capita cap to medical inflation (plus 1) which grows faster than overall inflation. But the key question is how much less will states get relative to their current allotments. Since Republicans are clearly counting on savings from this switch, the answer can't be zero (otherwise, why make the switch?). My guess is states will need to make up north of $300bn, and that they're be very unlikely to do so, meaning diminished coverage for low-income families.
–The bill ends employer and individual mandates and, in their place–because health insurance doesn't work if people can just seek coverage when they're sick–allows insurers to impose a 30 percent surcharge on those with gaps in coverage. As I noted in piece yesterday, low-income persons and those with pre-existing conditions are the most likely to face coverage gaps.
–The plan targets Planned Parenthood by disallowing Medicaid reimbursements. To state the obvious, the has nothing to do with health care reform and is a pure sap to the anti-choice right.
Like I said, I'll be getting deeper into the weeds on this later in the day–running out now to talk about it on CNBC ~ 11am EST–but this looks very much like what I wrote about yesterday. By significant ramping up cost sharing, the incentives in the House R's plan will lead healthy people to leave the risk pool, setting off the adverse selection problem that the ACA was built to avoid. Combine that with the whacking of the Medicaid expansion (turning the problem into a block-grant variant) and you get the predicted result: health care that's a lot less affordable, thus triggering the loss of the ACA coverage gains.
-- via my feedly newsfeed
