Opinion: About Americans ‘losing’ insurance under GOP plan
The Congressional Budget Office has released its initial estimate of the effects of the House GOP’s health-care plan, and one big takeaway is that the bill would reduce federal deficits by about $337 billion over 10 years compared with leaving Obamacare on the books. That’s worth noting, given that Democrats have spent years peddling the fiction that Obamacare somehow saves Uncle Sam money.
But you can also expect a lot of headlines about how many people would “lose” coverage if it is passed. I put “lose” in quotation marks, because it’s clear from the report that a great many of these people would actually be making a choice, not having an outcome forced on them by the government.
The report doesn’t give us an easy-to-read tally of how many people would no longer elect to buy coverage vs. those who would lose something they’d prefer to keep. But there are a couple of key references to this difference in the report’s section on “Net Effects on Health Insurance Coverage” (pgs. 19-21):
- “… in 2017, the elimination of the individual mandate penalties would result in about 4 million additional people becoming uninsured”;
- “Most of the reductions in coverage in 2018 and 2019 would stem from repealing the penalties associated with the individual mandate. Some of those people would choose not to have insurance because they choose to be covered by insurance under current law only to avoid paying the penalties. And some people would forgo insurance in response to higher premiums.” (emphasis added).
Let’s put those figures in context. In 2017, the CBO says the elimination of mandate penalties — i.e., the fines for not buying insurance — would account for 4 million people no longer being uninsured. In total that year, the CBO says 4 million people would become uninsured. The implication, then, is that most if not all of these people would be choosing to become uninsured because they no longer faced a penalty for doing so. (Some of them are listed as having employer-sponsored coverage now, but the CBO report makes clear they, like people in the non-group/individual market, would be choosing not to buy the insurance their employers offer.)
In the two years following that, the number of newly uninsured would rise to 14 million and then 16 million. But again, the CBO says “most of the(se) reductions … would stem from repealing the penalties associated with the individual mandate.” In other words, “most of” the 10 million to 12 million people dropping coverage in 2018 and 2019 would be choosing to do so because they no longer face a penalty for being uninsured.
Put those figures together, and the number of people who choose to drop coverage rather than “losing” it are:
- 4 million out of 4 million in 2017 (100 percent);
- about 9 million out of 14 million in 2018 (64 percent);
- about 10 million out of 16 million in 2019 (63 percent).
That’s a rather different way to look at things.
For all the talk on both sides about replacing subsidies with tax credits, the CBO predicts that over time they will pretty much even out: In 2026, there will be only about 2 million fewer people buying insurance on the non-group market compared to the number who use the Obamacare exchanges today. That’s the same number as estimated for this year — meaning we are still mostly talking about people not buying insurance because they aren’t being forced to buy insurance.
The bad news, if you’re a Republican being asked to support this bill, is that in the meantime the CBO expects a lot of volatility in the non-group market. The number of people in that market today who become uninsured will peak between 2020 and 2022, at 8 million to 9 million. It’s unclear to me why the CBO would expect the switch from a subsidy to a tax credit to take that many people that long to adjust to, given that the tax credit has been designed to act virtually the same as a subsidy. There’s not a good answer in the report.
The biggest change in insured will come in Medicaid. But here, too, there’s some context that’s useful. More than two-thirds of the projected eventual “drop” in enrollment — 5 million out of 14 million, roughly speaking — comes from expansions in states that haven’t expanded Medicaid. Confused? You should be. Essentially, the CBO is projecting these states, such as Georgia, would have expanded Medicaid eventually, but won’t now. How does the agency know that? It isn’t telling. But it is saying 5 million people will “lose” insurance — which they do not have, because those expansions have not taken place — as a result. This is deeply disingenuous.
Not all of these trends are projected to take place at the same speed, so you can’t simply add the Medicaid numbers to the private-market numbers. Still, it’s clear that, at any given moment, more than half of the people “losing” insurance under the GOP plan are either choosing to stop buying it or not receiving Medicaid which they have not been offered in the first place.
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Keep in mind, the question of whether this is a good plan is, to some degree, an entirely different question. I tend to be underwhelmed by it.
But if you see people railing against it based on the “fact” that millions of Americans will “lose” coverage because of it, just know the real, full story is rather different.
Sent from my iPhone
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