The Implications of Health Reform

On March 9, 2017, House Republicans announced the American Health Care Act (AHCA), their bill to replace the Patient Protection and Affordable Care Act (ACA). A week later, the nonpartisan Congressional Budget Office (CBO) released its analysis of the impact of the legislation. A recent study examines the various coverage provisions of the ACA and how changes might impact the rate of uninsured.

As a result of the ACA, the uninsured rate decreased from 16% to below 9%, the lowest recorded rate since data collection began in 1972. Overall, uninsured rates fell across all income levels, especially with the expansion of Medicaid to include Americans below 138% of the FPL. This impacted all races, with a dramatic rise in coverage among black Americans, although greater numbers of non-Hispanic white Americans benefitted from the ACA.

Two provisions, each respectively increasing coverage by 12.7 and 14.5 million, which the AHCA planned to repeal included stipulations on coverage sold in nongroup markets – which can no longer be underwritten based on pre-existing conditions, gender, and can only vary in price based on age by a factor of 3:1 – and Medicaid expansion. Though the insurance reform provisions are largely popular among the American public regardless of political party, it was the ACA subsidies that ultimately contributed to the increases in coverage at the cost of increasing the budget deficit. In contrast, the ACA provisions that the AHCA planned to keep have only had a modest impact on the insured: the coverage of young adults up to 26 years old by parents’ plans (an increase of 1-3 million) and expansion of the temporary program of high risk pools of patients with complex medical needs (a small upturn of approximately 200,000).

Under the AHCA, there would not have been any effective insurance mandates, foregoing the current penalty for lack of coverage, and leading to loss of some of the ACA’s revenue stream, nearly $0.9 trillion over a decade. Instead, those who purchase health insurance would have received flat tax credits, which would be insufficient to incentivize low-income populations to buy coverage once the Republican plan kills the ACA’s aggressive subsidies. Additionally, insurers can increase premiums if there is any lapse in coverage. These factors underscore the CBO’s prediction that 52 million Americans would go uninsured by 2026 under the Republican’s ill-fated plan.

This Policy Prescriptions® review is written by Archana Shah, MD, MBA. Dr. Shah is an emergency medicine resident at the University of Chicago. She received her medical degree and masters of business administration with a concentration in health organization management at Texas Tech University.

Abstract

We describe the patterns of coverage gains associated with the Affordable Care Act (ACA) expansions and use these patterns to assess the potential impact of alternative repeal or repeal and replace strategies because Congress and the president are weighing options to repeal or replace the ACA. We find that specific provisions of the ACA, including the Medicaid expansion and the structure of premium subsidies, have been associated with large and robust gains in insurance coverage. We evaluate the impact of retaining dependent coverage and high-risk pool provisions and show, on the basis of the ACA experience, that these provisions would have little effect on coverage. We find that many replacement proposal components, including flat tax credits and maintaining cost savings provisions, could jeopardize the ability of many of the ACA’s primary beneficiaries, as well as other Americans, to access coverage and care. By leading to a deterioration of the safety net, these strategies could also imperil population health activities.

Glied, S. and Jackson, A. AJPH. 2017; 107 (4): 538-540. PMID: 28207344