Clear winners, losers in health plan

House Republicans’ plans to dismantle core parts of the Affordable Care Act would provide more government help to buy health insurance than some conservatives want, but the assistance would take a sharply different form, with clear winners and losers.

The architecture of the tax credits in the legislation, which House committees are debating, would offer less help to lower-income Americans than the subsidies provided now. It would steer more money to young adults at the expense of older ones. And it would most benefit consumers living in states where insurance prices already are relatively

low.

The House GOP is moving so fast that lawmakers have not yet received any estimates from congressional budget analysts of how much the plans would cost orhow many Americans might gain or lose insurance coverage.

Still, the plans’ tax credits and other elements that would change the insurance landscape have enabled analysts and policy specialists from different ideologies to start forecasting.

An analysis by S&P Global predicts the legislation would lead to a loss of coverage for 2 million to 4 million of the roughly 16 million Americans who bought their own health plans through the ACA’s marketplaces or separately. More adults 35 and younger would gain coverage, while fewer adults 45 and older would be insured, according to the analysis.

Such patterns would arise from subtle but significant differences between the ACA’s subsidies and the way the GOP legislation’s features would work, said Deep Banerjee, an S&P Global director.

The current subsidies take into account the cost of insurance in a given area, and they are linked to premiums for the next-to-lowest “silver” health plan — the second rung among four ACA tiers. Under House Republicans’ plans, those tiers would disappear and the tax credits would no longer vary by location.

As a result, the largest credits, $4,000 for people 60 and older, would cover more than half the typical insurance premiums in New Mexico, for example, but less than a third of the cost in Wyoming, Banerjee said.

The GOP plans also would undo an ACA rule that allows insurers to charge their oldest customers no more than three times what they charge their youngest and healthiest ones. Instead, insurers could charge five times as much.

“Obamacare was specifically calibrated to crosssubsidize the older and sicker patients,” said Dan Mendelson, president of Avalere, a Washingtonbased health consulting group. The GOP approach “basically moves back in the direction of a less regulated market.”

AARP, the influential lobby for older Americans, has already begun pushing back. David Certner, AARP’s legislative counsel, said the group is particularly concerned about the effect on Americans ages 50 to 64 if that age-charge differential is to increase. Low-income Americans in that older group would “get hammered,” he said. For a 64-year-old earning $15,000 a year, Certner said, the combined change of the subsidy and premium would be roughly $8,500. For a 55-year-old earning $25,000, it would be $3,600. “We think those numbers are pretty dramatic,” Certner said.

Larry Levitt, senior vice president for special initiatives at the Kaiser Family Foundation, said more lowincome people would have a hard time affording benefits under the Republicans’ American Health Care Act. “There will be more losers than winners,” he said.

Grace-Marie Turner, president of the Galen Institute, a health and tax policy research organization favoring free-market approaches, agreed that for lower-income people, “there is no question [financial assistance is] going to be lower.” But the GOP’s version of tax credits would be more transparent, she said, enabling people to know based on their age and income exactly how much help they would get. And that, she said, would lead consumers to be more cost-minded and thus help hold down health plans’ prices.

Overall, Republicans’ tax credits would reach people at higher incomes than the ACA subsidies, available to people with incomes of up to 400 percent of the federal poverty level — about $47,000 for an individual or $97,000 for a family of four. The proposed credits would be available to individuals with incomes of up to $75,000 and families up to $150,000.

The credits also would be available to people who have been caught in a coverage gap: Incomes too high to qualify for Medicaid in their state but too low to buy health plans on the ACA’s marketplaces.

Certain health care is specifically targeted by the legislation. In the House Energy and Commerce Committee bill, a provision would prohibit federal funds from being spent for one year on any family-planning clinic that “provides abortions,” except in cases where the pregnancy stems from rape or incest or threatens the life of the mother. The restriction would carry out conservatives’ longtime goal of cutting federal support of Planned Parenthood.