Insured Through Your Job? Medicaid? The ACA? Here's What Could Change For You

It’s even clearer now how much the GOP plan to replace the Affordable Care Act will change health insurance for just about everyone. 

The nonpartisan Congressional Budget Office Monday released its estimates of the cost and impact of the House Republican plan known as the American Health Care Act. Chief among its findings is that the number of people without health insurance would increase by 14 million in 2018. By 2026, that figure would hit 24 million.

And the total number of people without insurance would reach 52 million in a decade, compared with 28 million if the ACA remained in place, says the CBO.

The changes wrought by the proposed legislation will have a much bigger ffect on some groups—especially those who get insurance through their employers and those on Medicaid—than estimated by recent analysis from independent healthcare policy experts such as the Brookings Institution and credit rating agency S&P Global Ratings

House Speaker Paul Ryan, reacting to the report, said the loss in coverage is a concern but that additional steps by the Trump administration and Congress haven’t been taken into account. Ryan also noted that the CBO projects that House plan would reduce the federal deficit by $337 billion over the next decade. 

But those savings would be to the government, not individuals, says Caroline Pearson, senior vice president for policy and strategy at Avalere Health, a healthcare consulting firm that has analyzed the GOP legislation. In fact, the CBO estimates that premiums would rise sharply in the first few years.  

Many consumers tell us they are worried. In a recent nationally representative CR Consumer Voices Survey, 55 percent of consumers said they are not sure they or their loved ones will be able to afford insurance to secure quality healthcare.

“The Congressional Budget Office confirmed the grave doubts we’ve had about the American Health Care Act,” says Laura MacCleery, vice president of policy and mobilization for Consumer Reports. “Lawmakers promised ‘more for less’ but this bill delivers the opposite—fewer people with skimpier coverage and higher costs.”

Based on the legislation as it stands and the CBO’s projections, here’s how you could be affected:

If You Buy Your Own Insurance

Under the Affordable Care Act, if you don’t get insurance from your employer or a government program, you have to buy insurance on your own—or pay a penalty. For 2017, that comes to $695 for each uninsured adult and $347.50 for everyone younger than 18 without insurance (though the total penalty can’t come to more than 2.5 percent of your household income).

The House plan does away with that penalty. If you don’t want to buy insurance—say, because you are young and healthy and feel invincible—you don’t have to.

Supporters of the House plan say that gives individuals more choice. But they also recognize that if too many young, healthy people opt out of insurance, it will drive up rates for everyone else.

That’s what the CBO analysis projects will happen. In 2018 and 2019, the average premiums for individuals buying insurance on their own would be 15 percent to 20 percent higher than under the ACA.

And that, the CBO predicts, would drive millions of Americans to drop coverage: According to the CBO analysis, about 9 million people will drop out of the individual market in 2020. “Some people will leave because they don’t face a penalty and others because insurance will be unaffordable,” Pearson says.

The House plan tries to encourage people to maintain coverage by allowing insurers to charge 30 percent higher premiums for one year if people let their policies lapse. But that could get pricey, and could  dissuade some people who opt out of insurance from joining again later.

If you opt to continue buying insurance, the GOP plan also changes how you will get help paying for your premiums.

Under the ACA, you can get tax credits to subsidize premiums based on your income and where you live. The less you make, the bigger your credit: Last year, subsidies averaged $290 per month, which covered a big chunk of the $396 average monthly premium for ACA marketplace plans. About 85 percent of people on ACA plans qualified for subsidies, according to the Department of Health and Human Services. 

And because healthcare costs vary dramatically across the country, the ACA also gives more financial help to people who live in states where insurance tends to be more expensive.

The GOP formula, on the other hand, is based mainly on age, though in contradictory ways. On the one hand, it gives larger credits ($4,000) to people 60 and older, and smaller ones ($2,000) to those 30 and younger. But it also allows insurers to charge older people up to five times more than younger ones (vs. just three times more under the ACA).

The net result: Under the House plan, if you’re younger and healthy and live in places where healthcare is relatively inexpensive, insurance could be less expensive for you than under the ACA. In fact, the tax credits might fully cover your premiums and even leave extra to put away in a health savings account, says Timothy Jost, a health policy expert and emeritus professor at Washington and Law School of Law.

But if you’re older, poorer, or live in an area where healthcare is more expensive, the cost of insurance may be less affordable, according to an analysis comparing tax credits under the GOP plan and the ACA by the Kaiser Family Foundation, a nonpartisan, nonprofit research firm focused on health policy issues.   

If You Get Insurance Through Your Job

The CBO report projects a larger impact on people with employer-based insurance than anticipated, where more than half of Americans get health coverage. About 7 million workers are expected to lose health insurance in the next decade under the House plan. 

The impact is two-fold. Under the ACA, individuals who can have insurance through their employer but don’t take it face a penalty. Without that motivation, some people will choose not to get coverarge. In addition, the House bill would remove the penalty imposed by the ACA on companies with 50 or more employees if they did not offer insurance to their workers. 

Although some employers complained about that penalty, saying that it was a job killer or costly, it did help many previously uninsured Americans get health insurance.  

Jost says that companies with more than 200 employees—most of which offered insurance to workers even before the ACA—would probably continue to offer insurance, even without the penalty, because it helps them retain and attract workers.

But in an effort to save money, some companies with 50 to 200 employees might stop offering health insurance, Jost predicts. If you work at a company in that size range, you could find yourself having to decide whether to buy insurance on your own or go without.

Eventually, the House plan might also have another effect people who continue to get insurance through their employers. Though the GOP plan does away with almost all the taxes that fund the ACA, it does keep one: the so-called Cadillac tax on employers that offer generous healthcare coverage. Although that tax wouldn’t kick in till 2025, it could prompt your employer to offer less comprehensive coverage or plans where you shoulder more of the cost. 

If You’re on Medicaid

The biggest group of people expected to see changes are those on Medicaid, the government health insurance program for low-income Americans. The CBO estimates that under the House plan, 14 million people will drop out of Medicaid coverage in the next decade because of changes to how the program is funded.

But those changes will come more gradually, with most occuring in 2020. If you’re getting health insurance through the Medicaid expansion program now, you’ll be grandfathered in and still receive it. But starting in 2020, if you have a break in coverage for more than one month you won’t be able to re-enroll.

In addition, the federal government now gives states money, allowing them to expand Medicaid to a broader group of low-income earners. As a result, more than 11 million people in 31 states newly qualified for coverage. The House bill proposes to freeze that expansion on Jan. 1, 2020, so you wouldn’t be be able to enroll after that date.

Another change is that the federal government currently matches what state’s put toward Medicaid, even if those costs continue to rise. But the GOP bill caps the amount of federal funding that states can receive. That would mean that when costs go up, states would either have to reduce coverage or come up with funds to offset the extra expense, according to a report by the Center on Budget Policies and Priorities, a nonpartisan research and policy institute.

Under the GOP plan, even if you remain in Medicaid there will be changes in your coverage. Now all insurance plans, including Medicaid, must cover 10 “essential” health services, including maternity coverage, prescription drugs, and mental healthcare. But under the GOP proposal, that requirement would go away starting in 2020.

“There are always trade-offs. The ACA had them, too,” Jost says. “This bill will help some people, but for millions of Americans who are dependent on Medicaid, this is very bad news.”  

If You’re on Medicare

Medicare is separate and apart from the ACA insurance marketplaces, so the current House plan to repeal the ACA won’t cause Medicare premiums or co-pays to change.

But the GOP proposal still has some implications for people on Medicare, or at least those who hope to be in the future. That’s because the House bill eliminates virtually all taxes used to fund the ACA starting in 2018, including a 0.9 percent payroll tax on higher-income workers that funnels money into Medicare.

Without those funds, Medicare could be insolvent in 2024 and have to start reducing the amount of benefits it pays out—four years sooner than previously predicted, according to the AARP, a nonprofit organization that advocates on behalf of people 50 and older and analysis by the Center on Budget Policy and Priorities, a progressive think tank.

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