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The real losers of Republicans’ latest repeal plan

Kathy Oller renewing Debbie Mills' Obamacare coverage. Byrd Pinkerton/Vox

Senate Republicans have struggled for months now to find a plan to repeal and replace Obamacare that their 52-member caucus can get behind. Their latest plan, which began taking shape early Tuesday, is to simply repeal the individual mandate and a few other regulations — a strategy since dubbed “skinny repeal.

It would hurt some American health care consumers in a very different way than previous GOP bills would have.

The losers of a skinny repeal bill, should it pass, are the middle-income Americans who purchase coverage on the individual market. Many of the Obamacare enrollees I’ve interviewed in Southeastern Kentucky, an area that predominantly voted for Trump, fall into this category.

Repealing the requirement that all Americans purchase insurance would cause premiums to rise 20 percent, the Congressional Budget Office estimates. The nonpartisan office projected that 15 million fewer Americans would have coverage when it analyzed a bill very similar to skinny repeal in 2015.

“Eliminating the mandate would likely result in lower coverage rates in the individual market and a deterioration of the risk pool,” the American Academy of Actuaries projects. “Premiums would increase as a result.”

This has the potential to wreak havoc on the individual market. Insurance plans would be reticent to sell on a marketplace where they have to offer coverage to all applicants, but healthy people have no requirement or incentive to purchase.

Premiums would likely rise as only the sickest patients continue to purchase coverage. This could put health insurance out of reach for many who would like to buy, but feel the ever-increasing premiums are a bad deal.

Skinny repeal would, somewhat surprisingly, keep the Medicaid program safe. This is a sharp departure from the other Republican health care plans, such as the House-passed American Health Care Act, which cut hundreds of billions of dollars from the program.

The losers of skinny repeal are middle- to even high-income Obamacare enrollees. Some supported Trump. Some didn’t. All would face a less-functional health insurance market should skinny repeal become law.

Skinny repeal hits those who rely on the Obamacare marketplaces

When I think of who skinny repeal disadvantages, I think of someone like Debbie Mills. She’s an Obamacare enrollee who owns a furniture store in Kentucky, and who supported Trump in the 2016 election.

Mills likes her health coverage. This year, she pays a $280 monthly premium for a plan that covers herself, her husband (who was on a waiting list for a liver transplant when we spoke), and her 19-year-old son. She heard the president talk about Affordable Care Act repeal but didn’t think he would actually follow through on taking away health insurance.

Mills has a high enough income that she does not qualify for Medicaid expansion. She is somewhat shielded from premium increases because of her tax credit, which only requires her to spend a certain percentage of her income to purchase a mid-level health plan. Once she kicks in that amount, the federal government pays the rest.

But Mills relies on a functional health insurance market, one where plans want to sell coverage — and skinny repeal makes it a lot harder for a market like that to exist. Health insurance plans are not enthusiastic about selling coverage in a market where only sick people buy coverage.

The result of skinny repeal, then, could be health plans quitting the marketplaces — or premiums rising dramatically. If Mills ever wanted to upgrade to a more robust plan, for example, she would have to pay a good chunk of that premium increase. The subsidies only limit her premium for a mid-level plan (known as a silver plan on the marketplace, which covers 70 percent of an average enrollee’s costs).

Skinny repeal would hit some of Mills’s neighbors in Southeastern Kentucky. This includes Clifford Hoskins, a 62-year-old retired coal miner who buys coverage on the marketplace, or Bobbi Smith, also 62, who owns an antique store and has used her plan for breast cancer treatment. All rely on the marketplace, not Medicaid expansion. So if insurers leave the marketplaces, scared off by the expected exodus of healthy enrollees, they’re going to be left with no options to purchase coverage.

The people who stand to lose a lot in skinny repeal are also people like Juliana Pieknik, a PhD student in Maryland who I interviewed last fall. When we spoke, Pieknik was earning $42,000, which is just slightly too much to qualify for tax credits where she lives.

Pieknik is by no means getting wealthy on a graduate student salary. But her income makes her just slightly too high-earning to qualify for a tax credit to purchase insurance. This means she’s responsible for her entire premium regardless of how much it goes up.

Under skinny repeal, Pieknik could decide to skip coverage and there would be no penalty. But there would be plenty of risk should some kind of medical emergency arise when she didn’t have coverage.

The surprise winners of skinny repeal would be Medicaid enrollees

Medicaid has never been thought to be a program with much political clout. It has a less-connected, lower-income enrollee population than Medicare, which covers the old.

But Medicaid has proved to be a shockingly resilient program throughout the Obamacare repeal and replace process. Notably, moderate Republican senators have vociferously protested cuts to Medicaid — refusing to support the Senate health bill over it, in some cases — while barely speaking about the cuts to subsidies in the individual market.

This has led to the somewhat surprising outcome where the Senate Republican’s latest attempt at repeal is one that doesn’t touch Medicaid at all, but instead focuses its sights on the individual market. It makes changes that will disadvantage higher-income Obamacare enrollees the most, especially those who earn too much to qualify for subsidies, and hurts the lowest-income patients the least.

Skinny repeal would let Medicaid expansion continue untouched in the 30 states that currently participate in program. For a party that has often pushed big cuts to large welfare programs, the “compromise” position in the Senate is one that leaves Medicaid off the table — but one that has clear losers among Obamacare’s higher-income enrollees.