How Repealing Portions of ObamaCare Would Affect Coverage and Premiums

The Congressional Budget Office Showed the Effects of Repeal and Replace; and it isn’t Good

UPDATE 2019: This is based on data from 2017 when the Republicans were trying to pass a repeal and replace plan, the specifics regarding the impact of repealing the ACA differ by what exactly is being repealed (and thus is constantly changing). This page should none-the-less offer an idea of the impact though.

According to the CBO, repealing the ACA and replacing it with a past Republican replacement would double premiums and lead to 32 million uninsured by 2026.

Here we have to note:

• The CBO looked at H.R. 3762, the Restoring Americans’ Healthcare Freedom Reconciliation Act of 2015.
• The CBO did not look at the new plan Trump and the GOP say they are hashing out.
• H.R. 3762 lacks some coverage provisions that Trump has said he would keep.
• The group who is most effected by losing coverage are those on expanded Medicaid and those who rely on tax credits.
• All groups would be effected by cost increases.

This is to say, if the replacement plan looks like the stock Republican repeal and replace plan we find in H.R. 3762 (which was more repeal than replace, but isn’t atypical of past GOP plans), it benefits the rich and hurts many who were uninsured before the law. It offers tax breaks, expands HSAs, and gets rid of the mandates, but it does little to solve the core healthcare crisis

Similar problems have been found with other past repeal and or replace plans (including ones that keep a version of Medicaid and tax credits, such as TrumpCare as presented during Trump’s campaigning), but every plan is different and thus the exact effects are always different. Republicans don’t have a replacement plan on the table yet, so there are still unknowns… and that means working with we have got (which is why an advisor might have wisely cautioned the GOP against stating the repeal process before a replace plan was on the table).

NOTES AND OPINIONS: The GOP rebuttal to the bipartisan CBO report can be summed up as, “this is unfair, it doesn’t include any temporary fixes or our plans to replace coverage provisions“. To that we say, “yes, that is what we didn’t like about the 50 repeal attempts and H.R. 3762 in the first place.” You ran the last 8 on “repeal, repeal, repeal”… what is it that you expected? If you have a better plan, “show us” so we can react in a fair way… and show the CBO so they can do their job.

From the CBO report:

In brief, CBO and JCT estimate that enacting that legislation would affect insurance coverage and premiums primarily in these ways:

• The number of people who are uninsured would increase by 18 million in the first new plan year following enactment of the bill. Later, after the elimination of the ACA’s expansion of Medicaid eligibility and of subsidies for insurance purchased through the ACA marketplaces, that number would increase to 27 million, and then to 32 million in 2026.
• Premiums in the nongroup market (for individual policies purchased through the marketplaces or directly from insurers) would increase by 20 percent to 25 percent—relative to projections under current law—in the first new plan year following enactment. The increase would reach about 50 percent in the year following the elimination of the Medicaid expansion and the marketplace subsidies, and premiums would about double by 2026.

TIP: As you’ll note, everyone’s premium is subject to inflation under a plan like this.

Importantly, H.R. 3762 would leave in place a number of market reforms—rules established by the ACA that govern certain health insurance markets. Insurers who sell plans either through the marketplaces or directly to consumers are required to:

• Provide specific benefits and amounts of coverage;
• Not deny coverage or vary premiums because of an enrollee’s health status or limit coverage because of preexisting medical conditions; and
• Vary premiums only on the basis of age, tobacco use, and geographic location.

TIP: Past GOP plans have expanded and altered these provisions. Since there is no official plan on the table, we’ll avoid too much speculation. If the Congress considers legislation similar to H.R. 3762 in the coming weeks, the estimated effects could differ from those described here. In particular, the response of individuals, insurers, and states would depend critically on the particular specifications contained in such legislation. Learn more about the ongoing repeal and replace plan.