In Stanislaus County, lower-income residents and older working adults who rely on Obamacare for insurance against crushing medical bills are worried about their prospects under the Republicans’ replacement plan.
They should be. A preliminary analysis last week showed the GOP plan will reduce government subsidies for lower income and older residents, causing dramatic increases in their health insurance premiums.
Under the GOP plan, individuals and families with higher incomes would be eligible for tax credits giving them much lower premiums.
The analysis was done by Covered California, the insurance exchange created by the Affordable Care Act in this state. Starting in 2014, the ACA, or Obamacare, provided tax credits for people earning between $16,000 and $47,000 a year to help them buy health insurance. The amount of the subsidy was pegged to household income, age, family size and the region where they live.
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The Republicans’ American Health Care Act would replace Obamacare and provide refundable tax credits for consumers based on age, with the maximums set at $2,000 to $4,000 for people earning up to $75,000 (or $150,000 for a married couple).
In general, the government support for buying insurance in the GOP plan is 40 percent less than the premium assistance in the ACA.
In the Covered California analysis, the biggest savings would be in Southern California where health care is less costly when compared with higher-cost regions such as Northern California.
The estimates are not good for older working people and other adults in lower income categories in Northern California, where health care costs are higher. With the GOP plan, the rates would triple, from $209 to $668 per month, for a 62-year-old person in San Francisco earning $30,000 a year. Covered California used examples from San Francisco and Los Angeles for its cost comparisons.
Under the GOP legislation, older individuals are eligible for larger tax credits, but insurers can charge them five times more than consumers in the younger age group, instead of three times more under the ACA.
A family of four in San Francisco earning about $40,000 a year would see a $345 increase in monthly premiums, while the rates would jump $113 a month for a 40-year-old man or woman earning $20,000 a year and $116 a month for a 27-year-old resident. Premiums could drop about $10 a month for individuals in their 20s earning $30,000 a year.
A similar pattern could be reflected in Stanislaus County, which also has elevated health care costs.
Under the GOP plan, the estimates predicted significant savings in Northern and Southern California for a family of four earning $102,500 a year. Such a family, which is not eligible for the income-based tax credits of Obamacare, could see their premium drop from $1,350 to $517 a month, an $833 monthly savings, according to Covered California.
Individuals between the ages of 27 and 62, earning $50,000 a year, could save between $167 and $333 a month under the GOP plan.
Covered California said it will continue to run calculations on the effects of the Republican bill. “The likely effect of basing subsidies on age alone … is that it will make coverage unaffordable and in many cases, put coverage out of reach,” said Peter Lee, executive director of Covered California.
The Congressional Budget Office, tasked with analyzing the GOP plan, predicted last week that lower subsidies and higher premiums would more than reverse the gains of the ACA nationwide, which reduced the number of uninsured by 13 million. With the Republican plan, 14 million fewer Americans would be insured in 2018, with the number growing to 24 million by 2026.
After 10 years, about 1 in 5 Americans will be uninsured.
The CBO predicted that many healthy people, who were required to get insurance, will stop buying it with the demise of ACA’s individual mandate. Many others will drop their coverage due to higher premiums.
While reductions in Medicaid spending would help reduce federal deficits by $337 billion over 10 years, some states would no longer participate in the Affordable Care Act’s Medicaid expansion, pushing millions of people out of those state programs, the CBO predicted.
The report also estimated that average insurance rates in 10 years will be 10 percent lower than today.
Janet Cataline, 62, of Modesto fears that health insurance will once again be out of reach.
Starting in 2014, Cataline paid $20 a month for an Anthem Blue Cross plan through Covered California, the state insurance exchange created by the ACA. One problem with Obamacare, she said, is that it was difficult to find doctors who accepted the Anthem coverage.
Cataline earns more today and currently has a Kaiser Permanente plan for herself and husband through Covered California, with subsidies lowering the premium to $250 a month, she said. She’s afraid her premiums could quadruple if the American Health Care Act becomes law.
“Rather than blow up (Obamacare), they should have tweaked it,” Cataline said. “I think the rich are going to get richer and the low to middle class are going to get screwed. Mr. Trump said it all would be covered at lower cost and with better care. I heard him say that.”
With the release of the CBO report, a grassroots campaign opposing the GOP bill was stepped up in Modesto and surrounding areas such as Turlock and Patterson on Saturday, with volunteers distributing door hangers to homes.
Organizers said the plan provides tax cuts for health care corporations and the wealthiest Americans, while millions of people would lose their coverage.
“It will make it much harder to buy insurance,” said Tim Robertson, executive director of the North Valley Labor Federation. “It will make it much more expensive and the result will be 24 million Americans won’t have coverage in 10 years because of this plan.”
Nick Bavaro, owner of Bavaro Employee Benefits & Insurance Services in Modesto, said he does not see solutions for the working poor in the Republican plan. There should be more employer incentives to offer coverage for employees, said Bavaro, who has been critical of the ACA in the past. Congress should reconsider the ACA rule that makes 30-hour-per-week employees eligible for full-time employee benefits, he said.
“Manufacturers and fast-food companies are cutting people to part time (to avoid the requirement),” Bavaro said. The Republican legislation “is all about politics and keeping promises, and not health care. We are not really getting to the major problems.”
Joseph Antos, a scholar for the conservative American Enterprise Institute, suggested in a blog in the journal Health Affairs that Republicans add a more generous tax credit to assist lower-income families or give block grants to states for boosting support for those households.
To discourage consumers from leaving the market, Antos favored a stiffer premium penalty charged by insurers – above the 30 percent surcharge in the current Republican bill – for people who let their policies lapse and seek insurance again later.
Ken Carlson: 209-578-2321, @KenCarlson16