The U.S. House Republican plan (backed by the Trump administration ) to revise and replace Obamacare has some momentum as I write this.
Last week the powerful House Ways and Means Committee and the Energy and Commerce Committee cleared the measure and Speaker Paul Ryan anticipates passage through the House by the end of the month.
Many conservative Republicans are skeptical of the plan. The American Medical Association and many other medical interests are hostile. Ultimate passage is uncertain. This week the nonpartisan Congressional Budget Office will release an important estimate of the dual impacts of the plan on the deficit and on the number of Americans insured under its provisions.
What would be the impact of passage of the bill on Idaho residents? I haven’t seen a good analysis yet, but I believe we can discern some broad effects.
First, the bill preserves popular provisions of Obamacare, including coverage for preexisting conditions, no link between insurance premiums and health status, coverage of adult children until 26 and no limit on lifetime benefits paid.
Second, the plan proposes to replace the current insurance premium subsidies for those without employer insurance or a form of government insurance with refundable tax credits that start at $2,000 per year for those under 30 and capping at $4,000 per year for those over 60. The current tax penalty for not buying coverage would disappear, but those who don’t have continuous insurance coverage would pay higher rates to reenroll. The tax credits phase out based on income but at much higher levels than the current phase-out. My supposition is that subsidies will be reduced for lower income Idahoans while upper income Idahoans would receive a pretty significant benefit. The real question is the impact on middle income Idahoans. More data is necessary on that issue.
Third, older Idahoans (not yet covered by Medicare) will pay more while younger Idahoans could pay less. Currently, the difference in premiums between the young and the old can be no greater than three to one. Under the GOP plan, premiums for older folks can be up to five times greater than those for younger people, outweighing the 2-1 ratio for the refundable tax credits.
Last week, Idaho U.S. Rep. Raul Labrador announced his opposition to the measure. Rep. Mike Simpson indicated he was undecided and Sen. Mike Crapo and Sen. Jim Risch both were reported to be studying its effects.
If the measure passes as-is (and I think substantial modification is likely) Idaho policymakers will face a host of interesting questions.
First, the measure will create pressure for Idaho to strongly reconsider Medicaid expansion. The GOP bill sets a drop-dead window of 2020 for a state like Idaho to expand its Medicaid or the door will permanently close (unless Congress extends the window). There has been considerable debate in the Idaho Legislature about covering the roughly 80,000 Idahoans in the so-called “gap population” -- those who don’t currently qualify for Medicaid but could if the state expanded the program. Expect the pressure to do so to ratchet up sharply.
Second, Idaho will probably eventually need to determine which provisions it will require in health insurance policies. That is currently dictated at the federal level but expect that provision to eventually be dropped. Will every Idaho health care policy provide maternity coverage, provide for diabetes supplies, and back mental health treatment or alternative forms of health care?
Third, the Idaho Legislature will not be able to dodge tackling Medicaid regularly even if they don’t extend Medicaid coverage. After 2020, the measure caps Medicaid payments to states on a per enrollee basis. That will mean the Idaho Legislature will need to constantly revisit how Idaho delivers services to Idaho Medicaid recipients in order to deal with capped federal funds, despite the likely continued increase in health care costs.
A final point . . . the focus of the GOP plan is on insurance coverage, as was Obamacare. What is not emphasized is the cost of healthcare itself. Despite rising premiums for many (including me), overall U.S. health care costs have been increasing at a lower rate the past few years. But, that is unlikely to continue as the baby boomers continue to age. I actually believe that the cost of health care itself is the bigger issue and neither party really has a strategy to tackle the simple fact that health care in the U.S. simply costs far more than the rest of the world – and that cost will likely increase sharply in the future.