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The actual policies contained in the American Health Care Act — the Obamacare repeal-and-replace bill that the House is voting on Thursday — would help some Americans a lot. The biggest winners are households making $250,000 a year or more, who would see two different taxes targeting them repealed; households with millions in investment income would come out particularly far ahead.
But vastly more Americans would come out behind. The Congressional Budget Office estimated in March that 24 million people would lose health insurance if the AHCA were to pass, and the changes made to the bill in the ensuing two months have only made it less generous and more likely to jeopardize coverage. And because the bill substantially weakens regulations for both individual and employer plans, millions of people who still get insurance will see the extent of their coverage shrink, and see themselves forced to pay out of pocket for expensive procedures that would otherwise be covered.
The list of people losing out from the bill doesn’t end there, though. Here are a few of the main groups that will be negatively affected if this legislation becomes law.
1) Working poor people who gained Medicaid under Obamacare
Of the 24 million people the CBO projected would lose coverage, 14 million are currently covered by Medicaid, which the AHCA would slash by about $880 billion over 10 years. These are the poorest and most vulnerable people who’ll lose insurance under the bill.
In the 32 states (including Washington, DC) that expanded Medicaid following the Affordable Care Act, all adults earning up to 138 percent of the poverty line are eligible for Medicaid. Non-expansion states often feature much lower income thresholds to qualify for Medicaid, particularly for non-parents — but they will also see people lose coverage.
The AHCA would effectively end the Affordable Care Act’s Medicaid expansion by freezing federal support for it starting in 2020. Under current law, the federal government initially paid 100 percent of costs of Medicaid expansion beneficiaries, a percentage set to wind down to 90 percent in 2020 and stay at that level permanently. Under the AHCA, the federal government would keep paying for people who signed up for Medicaid expansion coverage before January 1, 2020, but not anyone who signs up after that.
Over time, this would also lead people currently enrolled to lose their benefits, and they wouldn’t be able to go back on the program thereafter. The AHCA drops funding for enrollees whose eligibility lapses for two or more months, and many working poor people cycle in and out of Medicaid as their income changes: They get a raise and no longer qualify for Medicaid; then they lose that job or take a pay cut and enroll again. A study by Harvard's Benjamin Sommers and George Washington University's Sara Rosenbaum found that fewer than half of people eligible for the Medicaid expansion stay continuously eligible over the course of a year, and only 20 percent are continuously eligible over four years.
So over a few years, most Medicaid expansion beneficiaries would fall off as their incomes rise and not be able to get back on once they fall again. “I think expansion is going to wither on the vine because of the churn that happens,” Georgetown professor and Medicaid expert Joan Alker told me in March.
2) Seniors, disabled people, and others who qualified for Medicaid even before Obamacare
But it’s not just people who gained coverage under Obamacare’s Medicaid expansion who would lose out. The law would also adopt a policy known as a “per capita cap” for Medicaid that would hurt all beneficiaries.
Currently, the federal government matches state spending on Medicaid, offering about $1 to $2.79 for every dollar states spend on it. Poorer states get a bigger match. But the AHCA would change all that.
Starting in 2020, rather than matching state Medicaid spending, the AHCA would give each state a set amount of money per person. The amount would grow from year to year according to the medical component of the Consumer Price Index, to account for inflation.
The medical component of CPI is growing more slowly than Medicaid costs are expected to grow right now, according to the Center on Budget and Policy Priorities. So switching to a per capita cap is essentially a federal cut to Medicaid amounting to billions over 10 years. In its initial form, the cap would’ve cut $116 billion; it’s been tweaked so that the per capita amount grows by slightly more than the medical CPI starting in 2020, but the cuts, while slightly more modest, are still very significant.
A per capita cap is at least somewhat responsive to changes in Medicaid enrollment — unlike a block grant, which gives states a set amount of money, it gives them a set amount of money for every person who’s eligible. But it could lead to cuts in some other ways as well. Take a state like Florida that’s aging fast. The AHCA includes separate caps for different groups of beneficiaries — the elderly, disabled, non-elderly adults, etc. — so states can’t get more money by dumping lots of seniors in favor of 24-year-olds.
However, there is still a lot of variation in cost within those categories. “Within your elderly group, you have the young and old, 67-year-olds and 85-year-olds, and the latter are much more expensive,” Alker told me. A state like Florida, which has a large senior population, could see costs rise fast as its population ages with time. But a per capita cap wouldn’t keep up with that. To get around that, the state might be motivated to kick off older seniors and focus enrollment on younger ones.
There are some federal requirements as to whom states must cover, but they only go so far, and most states now provide additional coverage that they can roll back. “You do have to cover people on Supplemental Security Income” — a program for disabled, elderly, and blind people with low incomes — ”but a lot of folks in nursing homes [are] optional coverage,” Alker continues.
This helps explain why disability rights activists are appalled by the per capita cap plan. “People with disabilities who rely on home- and community-based services through Medicaid — such as personal-attendant care, skilled nursing, and specialized therapies—could lose access to the services they need in order to live independently and remain in their homes,” the Center for American Progress’s Rebecca Vallas, Katherine Gallagher Robbins, and Jackie Odum note.
As if that weren’t enough, the bill has also been changed to allow states to impose work requirements on Medicaid, a policy that would not effectively spur people to work or reduce poverty but that could meaningfully reduce access to care for poor families, and which even many conservative health care experts oppose.
3) States hard hit by the opiate crisis
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A per capita cap would also cause problems if a new, expensive, but necessary drug comes on the market, or an epidemic hits. Those are both changes that would raise the per capita amount Medicaid has to pay year to year, but which a per capita cap wouldn’t budget for.
For instance, the opioid epidemic has taxed state Medicaid programs as more patients need treatment for substance use disorder. Today, an increase in need leads to an automatic increase in federal funds flowing to states. But the Republican plan would halt that and put the whole burden on states.
4) People in states that take a Medicaid “block grant,” who could see dramatic cuts in coverage
In late March, the per capita cap part of the bill was changed to allow states to adopt an even more drastic reform if they want to: a full block grant. States would get a fixed pot of money for Medicaid over a 10-year period, increasing every year only with the normal inflation rate (which grows more slowly than medical costs). There would be absolutely no allowance for increased population, or for increased need during recessions. States would be forced to raise taxes or restrict eligibility when federal funds inevitably prove inadequate. Seniors and people with disabilities would be exempted, but would inevitably be hurt as the program itself undergoes cuts.
Why would states choose to take this much less money from the feds? Because, as Edwin Park, Judith Solomon, and Hannah Katch at the Center on Budget and Policy Priorities explain, the block grant also provides states with "virtually unfettered flexibility to decide how to spend the federal funds they receive. … Under the block grant, states would no longer have to comply with most federal Medicaid requirements for children and adults. States could immediately cut eligibility and benefits to avoid any shortfalls and they would be allowed to carry over unused funds to the next year."
States would no longer be required to cover poor parents. They could charge unlimited premiums, deductibles, and copayments. They could impose enrollment caps and waiting lists, and they could cut the range of services provided to poor children.
"Over time, states electing the block grant would be forced to use this flexibility to make increasingly draconian cuts to their Medicaid programs, as the block grant funding cuts became increasingly severe," Park, Solomon, and Katch write.
5) Pregnant women and new mothers
Originally, the bill was supposed to preserve essential health benefits, a key reform from the Affordable Care Act that required all insurers to cover 10 types of procedures and medical services:
- Outpatient care without a hospital admission, known as ambulatory patient services
- Emergency services
- Hospitalization
- Pregnancy, maternity, and newborn care
- Mental health and substance use disorder services, including counseling and psychotherapy
- Prescription drugs
- Rehabilitative and habilitative services and devices, which help people with injuries and disabilities to recover
- Laboratory services
- Preventive care, wellness services, and chronic disease management
- Pediatric services, including oral and vision care for children
The AHCA now has a provision letting states waive these requirements for individual market plans, enabling much narrower coverage for everyone, but especially for pregnant women and new parents. "This means that plans in the individual market could once again decide not to cover maternity care — like 88 percent of plans did before the Affordable Care Act passed," as Vox's Sarah Kliff explains.
6) People with preexisting conditions
Under the MacArthur Amendment added to the bill in late April, states would also be allowed to waive "community rating," a provision in Obamacare that bans insurers from charging higher premiums to sicker people. This would effectively return us to the days when people with “preexisting conditions” would be charged vastly more for insurance.
How much more? It’s hard to say for sure, but the Center for American Progress's Sam Berger and Emily Gee attempted to estimate using insurer data from the Centers for Medicare and Medicaid Services. They find that people with metastatic cancer would see an annual surcharge of more than $140,000, people who've had a heart attack would see a $58,000 bump, people with depression or bipolar disorder would see premium hike by $8,500, and pregnant women would see costs rise by $17,320:
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7) Families with chronic conditions
One of the less heralded benefits of the Affordable Care Act was its elimination of "lifetime limits," which let insurers cap how much they're willing to spend on a patient over the course of a lifetime. Caps were normally in the range of $1 million to $2 million. For kids like 6-year-old Timmy Morrison, whom Sarah Kliff profiled for Vox and who blew through $1 million in medical costs before he turned 6 months old, that provision of Obamacare literally kept their parents from going bankrupt.
Because of states’ ability to waive out of essential health benefits, however, they could choose to eliminate this protection. Republicans claim this would only apply to the individual market, but Matt Fiedler at Brookings argues that it applies to employer-based plans too. The law, he alleges, would bring back lifetime limits for the entire country.
8) Low-income Americans not on Medicaid
The AHCA offers tax credits to buy health insurance that, unlike those in Obamacare, don’t increase for low-income people. That will reduce benefits for low-income households that don’t make little enough to qualify for Medicaid expansion but that get the maximum premium tax credit, or near the maximum. They would see their subsidies decline, so that subsidies for higher-income people can rise. This would be especially true for young low-income people, as the AHCA does increase tax credits by age to help older people.
9) Older people on the exchanges
But older people not yet old enough to qualify for Medicare who get their coverage individually by buying on Obamacare’s exchanges would also be out of luck. While tax credits would double for people over 60 relative to people under 30, insurers would be allowed to charge older people up to five times as much as younger people. So, on net, the greater tax credit won’t make up for the higher premiums they’ll be stuck with.
10) Children in special education programs
This is a less noticed element of the bill, but many school districts rely on Medicaid to provide services to disabled students. Because of the cuts implied by the per capita cap and block grant provisions, AASA, a group representing school superintendents, is warning that school services for disabled children could be cut back or rationed as a result of the federal Medicaid cuts.
“"A per-capita cap, even one that is based on different groups of beneficiaries, will disproportionally harm children’s access to care, including services received at school," AASA’s Sasha Pudelski, along with the National Alliance for Medicaid in Education's John Hill and the National Association of School Psychologists' Kelly Vaillancourt Strobach, said in a statement. "Schools are often the hub of the community, and converting Medicaid’s financing structure to per-capita caps threatens to significantly reduce access to comprehensive health care for children with disabilities and those living in poverty."
11) Planned Parenthood patients
If you rely on a Planned Parenthood clinic for non-abortion services, such as birth control, pregnancy and STD tests, and cancer screenings like breast exams and Pap smears, the American Health Care Act affects you as well. The law includes provisions banning federal dollars from going to groups that focus on family planning and reproductive health, which provide abortions, and which got more than $350 million from Medicaid in fiscal year 2014.
That basically only means Planned Parenthood. So people relying on Medicaid would not be able to get regular health services at Planned Parenthood, even though they're already barred from using Medicaid to get abortion services.
In more than 100 counties across the country, Planned Parenthood is the only full-service birth control clinic, so denying the organization Medicaid funds would drastically reduce access to contraception and related services for people in those regions.
