By Phil Galewitz June
23, 2017
Having
long decried the failings of the Affordable Care Act, Senate Republicans are
purporting to fix one of its loopholes with their newly unveiled health plan. The
so-called coverage gap left
more than 2.5 million people living below the poverty line of $11,880 for an
individual ineligible for Medicaid or financial assistance to buy insurance —
even as higher earners got subsidy checks to buy theirs.
But
experts say the fix, which looks fine on paper, is a mirage.
In
fairness, the loophole was essentially created by Republicans and others when a
Supreme Court decision meant that states were no longer required to expand
Medicaid.
The
Affordable Care Act offered help paying premiums to people earning between 100
to 400 percent of the poverty line, under the assumption that those under the
poverty line would be covered by Medicaid.
So
when 19 states decided not to expand Medicaid, millions of Americans were left
in the coverage gap because they didn’t qualify for Medicaid and couldn’t
afford private insurance.
As
a remedy, the Senate bill would offer federal tax credits to help pay for
insurance premiums for anyone earning between 0 and 350 percent of the poverty
level (up to about $42,000 for an individual) starting in 2020. (Note that the
upper ceiling is somewhat lower than that stipulated by the ACA.)
But
health law experts caution that this coverage gap fix for these very low
earners would likely be largely undercut by two other changes in the bill.
First,
the Senate’s plan would shift the calculation for subsidies. The ACA required
that premium subsidies be linked to the price of a category of health insurance
that was a kind of minimum standard for Obamacare and covered 70 percent of
health costs on average — called a silver plan under Obamacare nomenclature.
The Senate would instead tie the subsidy to the more bare-bones bronze plans,
which cover on average only 60 percent of health costs.
Although
low earners might qualify for subsidies to buy insurance, making coverage an
option, they would likely have a hard time using the plans because bronze plans
generally have higher deductibles and copayments.
In
addition, the legislation in 2019 would discontinue a second ACA subsidy — the
cost-sharing reductions offered to anyone earning less than 250 percent of the
poverty level. These payments help cover out-of-pocket expenses. So even if
marketplace customers got subsidies to help cover their premiums, their
out-of-pocket costs could be too expensive and would likely keep them from
using or buying coverage.
Gary
Claxton, director of the Health Care Marketplace Project at the Kaiser Family
Foundation, said expanding subsidies doesn’t mean the poor will find affordable
coverage. “It will give people plans that are very difficult to use at their
income levels,” he said, noting the coverage will likely have deductibles of
over $6,000 a year. (Kaiser Health News is an editorially independent program
of the foundation.)
Another
factor that experts noted is the Senate plan would phase out the Medicaid
expansion.
Theoretically,
people affected by the end of that program could get federal subsidies to buy
coverage under the Senate plan.
But
experts say the benefits would likely not be as good. That’s because Medicaid
typically provides services such as transportation to medical appointments and
home health care, said Chiquita Brooks-LaSure, an insurance expert with the
consulting firm Manatt Health.
Andy
Slavitt, who oversaw the health law for the final years of the Obama
administration, said that despite the fix, options for very-low-income people
would be worse under the measure announced Thursday, eliminating Medicaid and
moving people to bare-bones plans, with skimpier benefits.
“That’s
the aim,” he said.
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