The new Republican plan to replace the 2010 Affordable Care Act was unveiled this week to the cheers of some and consternation of others. The American Health Care Act would retain the popular provisions to keep children on their parents’ health insurance plans until they are 26 and ban insurance companies from denying coverage to those with pre-existing conditions unless they have a lapse in insurance coverage.
The proposal drops the requirement that everyone buy health insurance, thereby eliminating the tax penalty for those who don’t buy coverage. It converts Medicaid to a program in which states have a set amount to spend on each enrollee per year. It eliminates several taxes that previously offset the cost of the Affordable Care Act.
Trump recently pledged that the GOP plan would cover all Americans and that premiums would be less costly. Is this possible under the GOP proposal?
Mello: No, this pledge comes from the Department of Wishful Thinking. The bill reduces the amount of financial assistance the government gives low-income Americans to offset the cost of buying insurance. It also wrecks the delicate balance in the Affordable Care Act that prevents insurance premiums from spiraling upward — the so-called “death spiral”— because the new bill allows people to wait until they get sick to enter the risk pool. The other thing to recognize when people start talking about lower premiums is that increasingly, what consumers pay for their healthcare comes in forms other than premiums. High-deductible health plans and higher copayments (your out-of-pocket share when you see a physician or fill a prescription) are more and more common. The new bill eliminates provisions in the Affordable Care Act that protect consumers below 250% of the federal poverty line from these types of costs. This paves the way for huge increases in what poor and lower middle-class families will pay before they get their first dollar of insurance coverage, and what they will pay every time they need a health-care service.Read More