March 9, 2017 Leave a comment
A friend asked me “boil it down–how is the Republican repeal and replace different from the new status quo after the ACA?”
- Most fundamentally, it would change the financing formula for Medicaid, and limit the federal government’s financial responsibility for same. The flexibility given to states will have to be used to decide how to cover the same number of people with less money, or increase state funding. I am not talking about expansion but the part of the Medicaid program that was untouched by the ACA–children, pregnant women, disabled, elderly.
- It ends the Medicaid expansion that is a part of the ACA (so will increase uninsured rate).
- It provides more people with smaller tax credits for purchasing private health insurance while making the mandate/penalty/steering mechanism to purchase health insurance weaker. Hurt are low income people who will get less, while higher income people get more. The ban on pre-existing conditions is kept, as are mandated essential health benefits. The bottom line will almost certainly be
fewermore uninsured (update post), and a much more likely death spiral in the individual insurance market. There are some complicated geographical forces at work that mean the impact on uninsured rates will differ by state, but fewer will be covered as compared to the ACA. It is unclear what the changes will do to employer sponsored coverage–some say there will be lots of drops. We need to know what the CBO thinks to see by how much private insurance coverage is likely to drop.
- The Medicare cuts that were used to partially pay for increased coverage in the ACA-and which the Republicans have viciously criticized–remain. About $700 Billion worth over the next 10 years.
- The taxes on people making over $290,000/year in the ACA have been repealed. The exact size of the tax cut is unclear (again, we need to hear from CBO, but estimates are between $700 Billion and $1 Trillion.
In summary, this bill is a tax cut for high income folks that is funded by cuts to the Medicare program as compared to the ACA new baseline. In addition, it provides a fundamental change of the federal governments financial commitment for Medicaid which weakens the safety net we have, while wiping out coverage gains from Medicaid expansion. States get less money, but the same number of people who now qualify for coverage, leaving aside any expansion effects. And the changes to the tax credit, insurance rules, penalty structure seem likely to destabilize the individual, private insurance market, with unclear impacts on the employer sponsored health insurance system. And the bill will likely increase the deficit (update post: CBO says it reduces the deficit, because of how many more uninsured there will be), but unclear by how much.
The simplest I can do.