John McDonough, professor of the practice of public health at Harvard T.H. Chan School of Public Health, discussed the potential impact of the American Health Care Act (AHCA), the Republican alternative to the Affordable Care Act (ACA), during a reddit “Ask Me Anyting” (AMA) on March 15, 2017. See highlights below.
What are the groups of people who benefit from the Republican plan as opposed to the Affordable Care Act?
- Households with incomes greater than $250,000 get a big tax cut on earned and unearned income.
- Higher income individuals—not now eligible for insurance subsidies— with incomes over 400% of the federal poverty line, will be eligible for the new proposed tax credit of $2,000-4,000 depending on their age.
- The Health Insurance Tax repeal will have some impact on lowering premiums though it’s hard to guess.
What sorts of changes can “regular people,” who have insurance through employers, expect?
Not nearly as much as folks who have individual coverage (subsidized through ACA or not) and people on Medicaid. People with employer coverage and Medicare are affected the least by AHCA. House Speaker Paul Ryan wanted to impact them by capping the tax deductibility of employer-sponsored coverage and he was forced to back off before the bill came out.
What were some of the key points from the Congressional Budget Office (CBO) scoring of the AHCA?
- By 2018, 14 million people will lose coverage and 24 million by 2026.
- AHCA will cut the deficit by $323 billion over 10 years.
- AHCA will take about $880 billion from Medicaid over 10 years.
- AHCA will cut taxes for the wealthy by about $350 billion over 10 years.
- Higher income individuals in the individual market for health insurance will get some help.
- Lower middle income and lower income individuals in the individual market will lose a lot of support, as will most older consumers between 50-64 years old.
I’ve often heard that medical expenses here are a lot higher here when compared to other countries with similar treatments, technology, etc. but we don’t necessarily have a healthier population or better medical care. My question is: what can hospitals, doctors and the medical field do to lower these costs for the consumer? Wouldn’t lowering the costs of treatments help us (the consumer) and affect our insurance rates?
What distinguishes the U.S. health system over all others is that we pay more for everything—hospital stays, doctors, nurses, drugs, devices, home health, everything. And much of this is salary/payroll. That’s one reason it’s impossible to really lower costs, and what we try to do is to lower the rate of growth rather than the real costs.
The big agenda/drive now is to change how we pay for health care. Away from fee-for-service which rewards volume (how many procedures you do) and rewards quality and efficiency (rewarding how well you do). That’s the drive behind accountable care organizations, bundled payment, readmission penalties, and so much else in the ACA, and that’s what we’re betting the house on now.
I’m John McDonough, professor at the Harvard T.H. Chan School of Public Health. I’m taking questions about the Republican alternative to the Affordable Care Act, the American Health Care Act. And we can talk about the new estimate on the AHCA from the Congressional Budget Office. Ask Me Anything! from IAmA