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Leaked report suggests millions could lose coverage under GOP health proposal

Virginia Gov. McAuliffe And Nevada Gov. Sandoval National Governors Association Leadership Event Photo by Drew Angerer/Getty Images

Republican replacement plans for Obamacare would lead to significant declines in the number of Americans with health insurance coverage, according to an analysis presented Saturday at the National Governors Association and obtained by Vox.

The analysis was conducted by the health research firm Avalere Health and the consulting firm McKinsey and Company.

The analysis includes graphs on what the Republican plan to overhaul Obamacare’s tax credits, generally making them less generous, would do. They are based on the recent 19-page proposal that Republican leadership released about their plan to repeal and replace Obamacare. In particular, they look at the effect of switching from income-based tax credits (which give poor people more help) to age-based tax credits, where everyone would get the same amount.

The report estimates what would happen in a hypothetical state with 300,000 people in the individual market that has also expanded Medicaid. In the individual market, enrollment would fall 30 percent and 90,000 people would become uninsured.

An additional 115,000 people in that hypothetical state may also lose coverage because they are enrolled in Medicaid and cannot find an affordable private plan.

The report estimates that coverage declines would be even higher in states that did not expand Medicaid — largely those run by Republican governors. There, the report presents an example of a state with 235,000 in the individual market. It estimates that coverage would decline by 120,000 people, about 50 percent.

States would also lose a significant amount of federal funding as fewer residents received financial support to help purchase individual coverage. The decline in federal funding through tax credits would be between 65 and 80 percent, according to this report.

The report does not make national projections for coverage declines, and we don’t know the exact size of the individual market. We do know it is somewhere in the tens of millions — so these numbers do indicate that this particular GOP proposal would leave millions of Americans without coverage.

Elsewhere in the report, Avalere estimated that the Republican proposals to turn Medicaid into a “block grant” program would cut the program’s funding significantly:

“I heard some very disturbing information,” Gov. Jay Inslee, a Democrat from Washington, said of the presentation. “We’re going to have to make sure that does not happen.”

But Gov. Matt Bevin, a Republican from Kentucky, argued that coverage numbers aren’t a good metric to measure health plans by.

“What do we want out of the health care system? We want healthier outcomes,” he told reporters. “That should be the ultimate goal. Simply enrolling people serves absolutely no value if all we’ve given them is a plastic card that says you’re now covered. They take that to a doctor who won’t see them.”

McKinsey, which estimated the coverage declines, told Vox the numbers could change significantly as Republicans' refine their plans. The consulting firm provided the following statement:

The illustration on the impact of changes in subsidy structure must be viewed in full context with the range of potential changes states may choose to take. As Congress develops details to balance cost and coverage priorities, the illustrative example shows the potential effects of a single subsidy proposal change based on 2015 methodology that was publicly available. We recognize that the proposal is dated and continues to evolve.

Further, results vary significantly state by state, so the illustrative examples cannot be extrapolated to national impact. And, it must be viewed in full context with the range of potential changes states may choose to take, which includes a number of potential reforms that could reduce the costs of care and dramatically improve coverage. McKinsey also discussed potential options — such as enhanced federal funding for state innovation grants — that could lower premiums and boost enrollment.

See the full presentation made to governors here.

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