Republican Proposals Would Reduce Health-Care Coverage, RAND Finds

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By Sara Hansard

Nov. 18 — Health-care proposals being considered by Republicans would likely result in lower coverage than the Affordable Care Act, a RAND Corp. researcher said Nov. 18 at a Capitol Hill symposium.

However, RAND senior economist Christine Eibner said, “There’s a lot of variability across the different proposals, which suggests to me that there is an opportunity by tweaking some of the parameters to get back to that level” achieved under the ACA.

Republicans are moving full steam ahead with plans to repeal and replace the Affordable Care Act, as President-elect Donald Trump and congressional Republicans have pledged to do. However, they face the challenge of keeping coverage for the 20 million people who have gained it under the law while not raising the federal deficit. Under the analysis Eibner presented, with provisions of the ACA in place, 252 million people have coverage, while repealing the law and replacing the Medicaid expansion with a block grant to states, as Trump and Republicans have called for, would leave 227 million with coverage.

Medicaid Block Grants Result in Lowest Coverage

According to RAND’s analysis, repealing the ACA’s Medicaid expansion provision and replacing it with a block grant to states would result in the lowest level of health-care coverage, while repealing the law and allowing health insurance sales across state lines would leave 234 million people with coverage and repealing the ACA and enacting the Patient Choice, Affordability, Responsibility, and Empowerment (CARE) Act offered by Sens. Richard Burr (R–N.C.) and Orrin Hatch (R–Utah) and Rep. Fred Upton (R–Mich.) would result in 243 million having health-care coverage. RAND is a nonprofit organization that conducts public policy research.

Although the Republican plans, which include the Better Way plan put forward by House Speaker Paul Ryan (R-Wis.), would reduce federal spending, in most cases they result in a higher federal deficit because they reduce revenue from taxes included in the ACA, Eibner said.

“Subsidies are important to expanding coverage through tax credits,” and they are more important to getting people covered than the ACA’s individual mandate, Eibner said.

Ryan’s Better Way plan would provide tax credits to help people without access to job-based or public coverage buy health insurance, while the Burr-Hatch-Upton proposal would allow subsidies for people with income as high as 300 percent of the federal poverty level.

Under the ACA, tax credit subsidies are available for people with income between 100 percent to 400 percent of the poverty level.

ACA Medicaid Expansion Accounts for Largest Share of Gains

The ACA’s Medicaid expansion accounts for a large share of the law’s coverage gains, Eibner said. Block grants of lump sum payments to states would cap federal expenditures for the health-care program for the poor, but they run the risk of reducing coverage or making coverage less generous, she said.

RAND also analyzed some “more out-of-the-box ideas as ways of trying expand coverage in the U.S.,” Eibner said.

Eliminating the exclusion from taxes for employer-provided insurance and using the revenue to provide subsidies to low-income people could increase coverage by 4 million people relative to current law as well as a reduction in the federal deficit, she said.

The Congressional Budget Office has estimated the tax exclusion carries an implicit loss of $260 billion in lost revenue, she said.

Providing all Americans with high-deductible insurance plans, funded with a per-capita tax, would result in 16 million more people covered and a reduction in the deficit, Eibner said.

To contact the reporter on this story: Sara Hansard in Washington at shansard@bna.com

To contact the editor responsible for this story: Kendra Casey Plank at KCasey@bna.com

For More Information

Information on the symposium is at http://www.powerslaw.com/news-events/.

RAND’s analysis of the CARE Act is at http://www.commonwealthfund.org/publications/fund-reports/2016/may/evaluating-care-act.

The Better Way health-care plan is at http://abetterway.speaker.gov/?page=health-care.

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