Somebody has finally put some numbers on what the Republican effort to undermine Obamacare will mean for everyday Americans.
Come 2019, the number of people without health insurance will rise by nearly 5 million, while millions more will enroll in “short-term” plans, according to Urban Institute research released Monday. The study is the first serious effort to assess the combined effects of several major health policy changes that President Donald Trump and his allies have made over the past year.
Those short-term plans will be popular because they are dirt cheap, relative to the usual price of health insurance. But that’s only because they aren’t available to people with pre-existing conditions and leave out key benefits like mental health, maternity care and prescriptions ― which at least some of those beneficiaries will need when they get sick.
Meanwhile, some people who need or want more comprehensive coverage will have to pay more for it, as the study predicts premiums for such plans will rise 18 percent. And the federal government, which subsidizes plans for lower-income consumers through tax credits, will have to spend more money.
This is still a far cry from full repeal of the Affordable Care Act, which is what Trump and the Republicans tried to pass last year. But it represents a significant reversal of the changes that the 2010 health care law unleashed.
What Trump And The Republicans Have Done
One of the most significant recent policy shifts is the decision to end the individual mandate, which imposes a fine on people who could afford to pay for insurance but decline to do so. Trump signed tax legislation in December that ends the mandate starting next year.
But that is not the only big change Trump and congressional Republicans are making. Trump is using his executive authority to undermine Obamacare’s insurance rules, including those that prohibit insurers from declining coverage to people with pre-existing conditions, as well as some that require insurers to cover 10 “essential benefits” such as mental health, maternity and prescription drugs.
The most vivid example of this is a regulation the Trump administration formally proposed last week. It would allow insurers to sell “short-term” or “limited duration” plans that would last for up to one year. Such plans can deny coverage for pre-existing conditions and don’t have to cover all of the essential benefits, engaging in the sorts of practices that the 2010 health care law sought to prohibit altogether.
These plans have existed for a long time. But they could not last for more than three months under regulations the Obama administration put in place ― and they would not count toward the individual mandate.
The rule didn’t go into effect until in 2016, and some insurers already flout it by packaging together multiple plans so they last for a year. Still, with the mandate in place, the plans have mostly served a relatively small niche market: those with brief lapses in coverage.
What These Changes Would Mean ― And For Whom
With the dissolution of the individual mandate, these changes have potential to shake up the markets for people buying coverage on their own.
People in relatively good health will increasingly sign up for short-term plans, which will be cheaper because they are less widely available and cover fewer services than more regulated Affordable Care Act plans. People with more serious medical needs won’t make the shift, leaving existing plans with a less healthy pool ― forcing insurers to raise premiums for those plans by 18 percent, according to Urban Institute researchers.
To be clear, that is 18 percent above and beyond any other premium increases.
It’s also an average figure, with considerable variation from state to state, and even within individual states. Under the Affordable Care Act, anybody with household income of less than four times the poverty line ― about $100,000 a year for a family of four ― is eligible for tax credits that discount premiums. As the premiums go up, so do the tax credits, insulating these people from the effects of the increases.
But that also means the tax credits will end up putting a greater strain on the federal treasury. The cost of tax credits will go up by about 9 percent, according to the study.
Meanwhile, the number of people without health insurance will go up by several million, according to the Urban study. The actual number depends on how you define insurance.
Overall, Urban’s researchers predict, the number of uninsured people in 2019 should be 4.7 million higher than it would have been if Republicans had not touched the Affordable Care Act at all. That reflects a number of smaller shifts in coverage ― including a decline in Medicaid enrollment because the mandate encourages people to investigate their insurance options and some inevitably discover they fall within Medicaid’s eligibility guidelines.
But even that figure doesn’t fully capture the coverage impact of GOP changes. In particular, it doesn’t include more than 4 million additional people who would be “insured” but have these short-term plans without the pre-existing condition and essential benefit guarantees, the researchers say.
Putting those two numbers together would mean the number of people without comprehensive coverage ― in other words, the type that meets the Affordable Care Act’s standards ― will rise by nearly 9 million, according to the Urban study.
Some Will Win, Some Will Lose, Some Will Lose Big
That is not to say 9 million people will be unhappy.
Some people prefer not to buy insurance, and by next year they won’t have to choose between going without coverage and paying a penalty.
Many who buy short-term plans will appreciate the chance to get insurance for much lower monthly premiums. If not for the availability of short-term plans, some of them would not have gotten any insurance at all. But those plans also don’t provide the same kind of protection against medical bills, which means that some people who buy the plans will discover ― upon getting sick ― they don’t have coverage they need.
Meanwhile, those who already have pre-existing conditions generally won’t have access to these policies. Higher premiums will “disproportionately” hit middle-income Americans who already have health problems, according to the Urban researchers.
Like all projections on the effects of health care policy changes, this latest one is subject to plenty of uncertainty ― in other words, the precise figures aren’t actually that precise. But Urban’s model is widely cited and respected, and few experts would dispute that it is “directionally” correct.
In other words, most experts would say, the types of changes the researchers expect ― higher premiums for comprehensive coverage, more uninsured, higher federal spending ― are almost certain to happen. It’s just a question of how big the effects are.