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Let’s imagine the health insurance market in 2025

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Let's fast-forward, for a moment, to 2025.

A few years have passed; Rumi and Sir Carter Knowles-Carter are celebrating their eighth birthday. The Senate's health bill passed on a tight vote in 2017 (Nevada Sen. Dean Heller lost his seat after casting the deciding vote) and has become the law of the land. I am probably still covering the never-ending fight over health care in America.

What does the health insurance market look like in that world? What kinds of plans are offered, and who buys them? I put that question to a few health policy experts today, to get their read on this not-too-distant future.

"The health insurance market is a mess," says Larry Levitt, senior vice president at the Kaiser Family Foundation. "There would be a market outside the health insurance exchanges that would look very similar to the way it was before the Affordable Care Act, with a lot of skinny plans that only healthy people could buy."

Eight years from now, Levitt expects you'd have a health insurance market that looks a lot like the market we had eight years ago, before the Affordable Care Act passed. Health plans would compete to find the cheapest members and deny coverage to the people they expected to rack up big bills. These plans would have low premiums and few benefits. They would likely have lifetime limits on overall benefits and not cover expensive services such as maternity care.

There would still be the Obamacare marketplaces, but in 2025 they'd look a whole lot different. The marketplaces would become a subsidized high-risk pool, where those denied or charged high prices elsewhere could be guaranteed coverage.

These health insurance plans would be subsidized so that enrollees wouldn't have to spend more than a certain percentage of their income on premiums. Someone who earns $10,000, for example, would only pay $17 per month on premiums (2 percent of her income). But what it buys isn't an especially generous plan. It would have a deductible around $6,000 — and keep in mind, this plan is envisioned for someone who isn't earning much more than that.

These plans would exist, but, as the Congressional Budget Office projected, many low-income people would decide they weren't worth the premium. Why spend $17 each month for a plan that could leave you with $6,000 in bills before its benefits kick in? And remember the subsidies do cap out at 350 percent of the poverty line ($42,000 for an individual or $86,000 for a family of four). Anyone who earns more than that would be on their own paying the full cost for a comprehensive health plan.

These people might get some help, but the details are fuzzy. The Senate health care bill does include about $180 billion in "stabilization funds," which states could use to offset the costs of low-income and high-cost patients. The problem is we don't really know how that money would be used. Few parameters are spelled out in the bill.

"There are several pots of money to stabilize the markets," Levitt said. "But they have to fulfill a lot of needs, and there is probably not enough money to fulfill all of them."

Remember that wave of insurance cancellations that happened in 2013, when lots of health plans terminated policies because they had to comply with the new insurance mandates? You may see a similar wave of cancellations to have happened by 2025 too. One insurance industry source I spoke with projected that plans currently in the industry may decide to cancel many of their current plans and start fresh, with a new business strategy focused on trying to sign up the healthiest members and avoid sick people.

"The plans that cover individuals could have to pull out of the markets and start over," says Justine Handelman, senior vice president for policy at the Blue Cross Blue Shield Association. "You could see widespread terminations for people enrolled today."

Generally, the expectation is that a world where the Better Care Reconciliation Act passes is a world where, in 2025, fewer people have health insurance, and those who are covered tend to be healthier and wealthier. Those who are sick have less coverage — and a lot more to worry about.

Cartoon of the Day

Alvin Chang/Vox

How the Republican health bill turns Obamacare into a very expensive trap for sick people. My colleague Alvin Chang looks at what happens under the Senate bill when sick and healthy people choose different plans. Spoiler alert: It doesn't work out so great. Read more here.

Kliff’s Notes

With research help from Caitlin Davis

Top news

  • "Trump, administration press Republicans to back health bill": “From both sides of the Atlantic, President Donald Trump and other administration officials lobbied Republicans Friday to support the Senate GOP’s reworked health care bill, with the president saying wavering senators “must come through” to keep the measure from collapsing.” —Erica Werner and Alan Fram, Associated Press
  • "Centrist Republicans push back on GOP healthcare bill": “Senate Republicans from states that expanded Medicaid enrollment under ObamaCare are pushing back on pressure from Senate Majority Leader Mitch McConnell (R-Ky.) to support the conference’s new healthcare bill.” —Alexander Bolton, the Hill
  • "Nevada governor undecided on health bill, will meet with Pence": “Nevada Gov. Brian Sandoval on Friday expressed deep reservations about Senate Republicans’ latest Obamacare repeal bill, but he wouldn’t go as far as to say he opposes the revised legislation.” —Rachana Pradhan, Politico

Analysis and longer reads

  • "Here Are 5 Backroom Deals Inside The Latest Senate Health-Care Bill": “Buried within the pages of the revised Senate health-care bill are numerous formula tweaks meant to advantage certain states. Call them backroom deals, call them earmarks, call them whatever you like: several provisions were inserted into the bill over the past two weeks with the intent of appealing to certain constituents.” —Christopher Jacobs, the Federalist
  • "Beyond ‘Repeal And Replace’: Physicians Renew The Call For Delivery System Improvement": “Policymakers who are focused predominantly on how to improve the health care system by providing health insurance coverage will fail unless they simultaneously focus on transforming and modifying the delivery system; otherwise, the cost of providing that care will erode any program they create, whether coverage is provided through private insurance, Medicare, Medicaid, or another method.” —Robert Pearl and Norman Chenven, Health Affairs
  • "Millions More Uninsured Could Impact Health Of Those With Insurance, Too": “Much has been written lately about how individuals’ health could suffer if they lose insurance under the health proposals circulating in the U.S. House and Senate. But there is another consequence: creating millions more people without insurance could also adversely affect the health of people who remain insured.” —Julie Rovner, Kaiser Health News
  • "States to Health Insurers: Please Come Back": “As some insurers announce plans to pull back or exit insurance exchanges, and others seek major rate increases for next year, states are trying to hold together fraying individual insurance markets.” —Anna Wilde Mathews, Wall Street Journal

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