June 23, 2017 – On June 22, 2017, Senate Republicans unveiled their version of a health care plan that would roll back major provisions of the Affordable Care Act (ACA). Harvard Chan School’s John McDonough breaks down what the plan could mean for Americans’ health care in the future.
What are the main ways that the Senate GOP’s proposed health care plan differs from the plan passed by the House of Representatives in May?
Up close, comparing the House’s bill (the American Health Care Act, or AHCA) and the Senate’s (the Better Care Reconciliation Act, or BCRA), hundreds of differences appear. Standing back, they are quite similar—both seek to cut or eliminate taxes for wealthy Americans and large corporations in exchange for cutting hundreds of billions of dollars from the federal Medicaid program and limiting the access and affordability of private health insurance for working Americans. Some key differences include:
• The BCRA would repeal the ACA Medicaid expansion more slowly than the AHCA—the phaseout would run through 2023 instead of 2020—but it would cut more deeply into Medicaid spending in the future through federal per capita caps or block grants.
• The BCRA would preserve the ACA structure of providing subsidies to help lower- and moderate-income people buy private insurance, basing them on income, age, and geography, versus the House bill, which would base subsidies only on different age categories. The BCRA is more realistic in this respect in recognizing that lower incomes are the major reason why people go uninsured.
• While both bills repeal the individual mandate (the requirement that individuals have a basic level of health insurance coverage) by reducing the penalty to $0, the BCRA provides no alternative mechanism to encourage people who are uninsured to buy health insurance, while the AHCA proposes penalizing individuals who have lapses in insurance coverage of more than 63 days. Each is problematic in its own way. By providing no disincentive for being uninsured, the BCRA will cause an immediate and explosive spike in premiums in the individual health insurance market.
The Senate GOP proposal would substantially lower federal spending on Medicaid over time. What are the potential long-term consequences of this proposal?
We will know much more on Monday or Tuesday when the Congressional Budget Office (CBO) releases its score, which will estimate how many people could lose health care coverage under the Senate bill and how it would affect the federal deficit. The CBO estimated that the AHCA would reduce Medicaid spending by $839 billion from 2017-2026, a 20-25% funding loss—much more than states would be able to absorb without serious and adverse ramifications. Though elderly and disabled Americans represent only about one third of Medicaid enrollees, they account for about two thirds of Medicaid spending. It is not realistic to think that proposed Medicaid reductions wouldn’t harm those most vulnerable populations. In addition, Medicaid coverage has been of critical importance for the health and well-being of non-disabled and non-elderly adults and children, as summarized in a new review in the New England Journal of Medicine by Harvard Chan School’s Benjamin Sommers, Atul Gawande, and Katherine Baicker. That study found strong evidence that insurance coverage increases access to care and improves a wide range of health outcomes.
The Affordable Care Act (ACA) aimed to make health insurance accessible for more Americans and to broaden coverage. What are the most significant ways that the Senate GOP health care plan, if approved, would depart from these goals?
The CBO estimated that the AHCA, the House’s plan, would result in 23 million currently insured Americans losing their insurance by 2026, and 14 million losing it as soon as 2018. I believe that the results for the BCRA will not differ substantially from the estimates for the House bill. The ACA was created to expand access to affordable coverage, and to achieve that goal, taxes were increased on wealthy Americans and large corporations. The AHCA and BCRA were written to achieve large tax cuts for wealthy Americans and large corporations, and would do so, to a great extent, by decimating affordable and quality health insurance for low- and working-class Americans.