9 Ways the Republican Health Care Bill Makes Health Coverage in America Unaffordable and Out of Reach
The congressional Republican health plan is an attack on everyone’s health benefits. No health care coverage—workplace plans, Medicare, Medicaid or the individual insurance coverage now available as a result of the Affordable Care Act—is untouched. For more than a century, working people in their unions have fought to make health care a right for every American. The Republican plan contradicts this very idea by making care less affordable and less accessible. It’s bad for our health care, it’s bad for working families, and we fully oppose it.
Here are nine ways the Republican health care bill is bad for America’s working families and their health.
1. The Republican health plan will take health coverage away from 24 million people.
Congress’ budget experts say the Republican plan will take health benefits away from 24 million people once it goes into full effect. This haphazard “repeal and replace” effort will result in painful taxes on working families, cuts to Medicaid, tax giveaways for the super-rich and a weakening of Medicare. Of all the bad ideas in this flawed plan, forcing workers to pay a so-called “Cadillac tax” on employer-provided health care has to be among the worst. That’s a terrible plan for health care in America.
2. The Republican plan isn’t really a health care plan at all. It’s a massive transfer of wealth from working people to Wall Street.
The Republican plan gives the 400 highest-income households an average tax cut of about $7 million each. The average millionaire household will get more than $50,000 every year. Insurance corporations will score $145 billion over 10 years from the Republican plan, while pharmaceutical manufacturers will get $25 billion. Republicans pay for these tax breaks by cutting health benefits for everyday Americans who struggle the most to make ends meet and taxing people’s workplace health plans.
3. The Republican plan keeps a tax on middle-class people's health benefits while giving huge tax breaks to the wealthy few.
While the Republican plan provides tax cuts for the super-wealthy, insurance corporations, pharmaceutical companies and medical device manufacturers, it puts the costs of the legislation squarely on the backs of middle-class people by keeping the so-called “Cadillac tax.” This is a 40% excise tax on the cost of employment-based health insurance that exceeds certain amounts. Congress’ budget experts predict that many employers facing the health benefits tax will simply drop coverage and that millions of people will have to seek other forms of coverage while some go uninsured. Research has found that the health benefits tax will fall predominantly on middle-class families while sparing the wealthy few. As health insurance premiums continue to rise, the health benefits tax will force employers offering coverage to choose between paying the tax and increasing out-of-pocket costs, such as deductibles, for their employees.
4. The Republican plan will result in people paying thousands of dollars in new out-of-pocket costs to get the medical care they need.
The Republican plan will make working people pay higher out-of-pocket costs, such as deductibles and copays, for at least three reasons:
- The Republican plan completely eliminates the ACA’s help with out-of-pocket costs for people who buy individual health coverage, meaning some will see the share of costs they pay go up by nearly five times.
- The Republican plan eliminates protections requiring health plans to cover a minimum share of medical costs, meaning insurance companies and employers offering coverage can and will shift more of those costs to individuals through higher out-of-pocket requirements.
- Congress’ budget experts predict that the vast majority of employers will respond to Congress keeping the so-called “Cadillac tax” by shifting costs to working people through higher deductibles, copays, coinsurance and maximum out-of-pocket limits to avoid paying the tax. That’s despite the fact that workers’ deductibles for single coverage increased nearly six times faster than people’s earnings between 2011 and 2016.
All of this will mean worse health outcomes for working families. Research shows that people forgo essential medical care, such as treatment for chronic conditions, not just nonessential services, when cost-sharing requirements increase. When people forgo needed treatment, their use of emergency department and hospital services increases.
5. The Republican health plan will make health coverage unaffordable for millions of Americans.
The Affordable Care Act helps eligible people pay for individual health insurance by giving them flexible tax credits that limit what they have to pay for premiums out of their own pocket based on their income. This approach takes into account where families live and the rising cost of coverage. The Republican plan eliminates the ACA’s protections against high premiums. It substitutes flat tax credits that range from $2,000 to $4,000 per person, depending on age. The Republican tax credits provide no protection for people who live in high-cost areas and will not keep up with rising premiums in the future. As a result of the deep cuts made by the Republican plan, people who get help today will have to pay $1,700 more per year for premiums out of their own pocket, on average, and that extra out-of-pocket premium will go up over time, hitting $2,900 extra in 10 years. Further, some states would be hit especially hard. In the 11 states with the highest premium costs, people would see a 50% or greater cut in the tax credits they get in 2020, requiring them to pay $3,000 more each year out of their own pockets, on average. Alaskans would be hit with a whopping $10,000 increase in their out-of-pocket premiums, on average.
6. The Republican health plan hits older people hard with big cuts in help to pay premiums, while letting insurance companies charge them much more.
AARP estimates the Republican plan would spike premiums for a 64-year-old making $25,000 per year by $7,000 in 2020 and for one making $45,000 by over $4,300. Congress’ budget experts show it actually gets much worse than that over time. They estimate that a 64-year-old earning $26,500 in 2026 (175% of the federal poverty level) would be hit with a $12,900 increase in her out-of-pocket premiums compared with the ACA—and that would be for much worse coverage, with much higher deductibles, copays and coinsurance. The ACA helps eligible people pay for individual health insurance by giving them flexible tax credits that limit what they have to pay for premiums out of their own pocket, something that’s especially valuable the older you get. The ACA also limits how much more insurance companies can charge older individuals compared with younger people, capping it at a 3:1 price ratio. The Republican health plan would undo these protections for older people by limiting tax credits to $4,000 a year for people 60 and older (maximum for people with incomes under $75,000 and phased out for those with higher incomes) and letting insurance companies charge their oldest purchasers five times what they charge young adults.
7. The Republican plan requires people to pay insurance companies 30% extra if they don’t have “continuous” health coverage.
The Republican plan replaces the ACA’s so-called “individual mandate” with a 30% penalty paid directly to insurance companies. Anyone who has more than a 63-day gap in health insurance coverage will owe the penalty to an insurance company. Not even losing a job or being unable to afford insurance will be considered excuses. The 30% penalty is effectively a tax assessed against the monthly premiums paid to an insurance company for the first 12 months when a person becomes insured again.
8. The Republican plan cuts federal funding for Medicaid.
The Republican health care bill jeopardizes health benefits and access to needed care for over 70 million Americans covered by Medicaid. Congress’ budget experts say the Republican bill will slash federal funding for Medicaid by an estimated $880 billion and take Medicaid away from 14 million people over 10 years. The Republican plan quickly phases out the ACA’s Medicaid expansion for 11 million adults and imposes a hard per capita cap on federal funding, which will not keep up with the actual cost of care.
Medicaid plays an important role in providing Americans access to needed care. Medicaid is our nation’s health benefits program for those struggling the most to make ends meet, such as children and adults with disabilities, children in low-income families, seniors who cannot afford nursing homes or the assistance needed to remain in their homes and communities, and the working poor. Medicaid plays a huge role in ensuring people get the care they need:
- Medicaid, together with the Children’s Health Insurance Program, covers 1 in 3 children (33 million).
- Medicaid covers 2 in 5 children with disabilities or other special health care needs.
- Almost half of all childbirths in the U.S. are paid for by Medicaid.
- More than 3 in 5 nursing home residents have their stays paid for by Medicaid.
The Republican Medicaid cuts will wreck state budgets. Medicaid accounts for one-fourth of total state budgets, with the federal government covering almost 60% of that spending, on average. There is no doubt that state budgets would be dramatically strained if congressional Republicans succeed in cutting Medicaid.
The Republican Medicaid cuts will cost working people their jobs. When states respond to the funding loss by cutting Medicaid eligibility, benefits and provider reimbursements, nurses, nursing home workers and home health aides will lose their jobs. When states respond by cutting back on other public services, people who provide those services will lose their jobs.
9. The Republican plan weakens Medicare to allow the wealthy and prescription drug manufacturers to dodge their tax responsibilities.
The Republican plan robs Medicare of $140 billion to give huge tax cuts to the wealthy and to prescription drug corporations. The Republican plan takes three years off of the life of Medicare’s hospital fund to give the wealthy a $117 billion tax cut.
***
This has been reposted from the AFL-CIO.
