Six Ideas in GOP Plans to Replace the ACA That Will Erode Health Coverage

In recent weeks, Republicans have released several proposals for replacing the Affordable Care Act. Ranging from op-eds to white papers to full-fledged bills, these plans share many ideas in common for how to replace the historic health reform law. The takeaway? Republican proposals would reverse the ACA’s extraordinary progress in helping millions of consumers gain access to affordable, comprehensive, high-quality health coverage. Here are six damaging ideas from the proposals we’ve seen to date.

• Elimination of Premium Tax Credit Subsidies, Loss of Affordable Health Coverage

  Several of these proposals—most notably the CARE Act authored by Senators Richard Burr (R-North Carolina), Orrin Hatch (R-Utah) and Representative Fred Upton (R-Michigan)—seek to eliminate all of the existing health insurance marketplaces (both state and federally facilitated). They would also decrease, or eventually eliminate entirely, the health insurance premium subsidies that have been so important for low- and middle-income consumers.

  For example, Senator Ben Sasse’s (R-Nebraska) bill proposes a gradual decrease in premium subsidies (until the subsidy amount hits zero) over an 18-month period. Without financial help, a large share of the 11 million people currently enrolled in a marketplace plan could lose coverage. Several proposals would also increase the costof health insurance by raising premiums, deductibles, and co-payments, thus making coverage unaffordable for millions of people.

• Erosion of Consumer Protections in the Private Health Insurance Market

  The ACA significantly improved protections for consumers in the health insurance market. Thanks to the ACA, insurance companies can no longer discriminate against consumers that have pre-existing health conditions such as cancer or high blood pressure. Some of the Republican ACA replacement plans seek to significantly erode protections for people with pre-existing health conditions and make coverage more expensive for older people and women.

  For example, in the Health Care Choice Act, introduced by Senators John Barrasso (R-Wyoming), Ted Cruz (R-Texas), and Mike Enzi (R-Wyoming), plans would no longer have to sell policies to people in less-than-perfect health. As a result, only expensive “high-risk pool” coverage would be available to many people.

  In the CARE Act, any gap in health coverage would put people with pre-existing conditions at risk of facing health insurance premiums they may not be able to afford. The CARE Act would also allow insurers to charge women higher premiums than men and would charge older people (ages 50-64) five times as much as what they charge younger consumers (under the ACA, this is limited to three times the amount). This erosion of consumer protections would take our country back to the dark days when health insurers could deny coverage to, and discriminate against, people who most need health care.

• Undermining Medicaid and Eliminating CHIP

  Republican ideas to replace the ACA undermine or severely limit coverage through Medicaid and CHIP, the Children’s Health Insurance Program. Some plans eliminate the ACA’s expansion of Medicaid to low-income adults. The expansion of Medicaid coverage in 28 states and the District of Columbia has in part contributed to 10 million additional Americans gaining health coverage through the program.

  In the CARE Act, Republicans seek to end Medicaid’s current financing structure by instituting a “per capita cap” in Medicaid. Instituting such a cap for the parents, children, and pregnant women enrolled in the program is simply another way to cut Medicaid. By limiting the amount of federal Medicaid funding a state receives, a per capita cap would lead to the rationing of health care for low-income people, increase costs to states, and hamper Medicaid’s ability to respond to epidemics or advances in health care treatment. For more on the drawbacks of Medicaid per capita caps see our issue brief, How Per Capita Caps in Medicaid Would Hurt States.

  The CARE Act would also end CHIP in its current form, which now provides health coverage to 8 million children from families with low or modest incomes.

• No Guarantee of Comprehensive Health Benefits

  Republican proposals take aim at the ACA’s requirement that health plans include comprehensive benefits. The law mandates that health plans sold in the health insurance marketplaces offer 10 essential health benefits. These include preventive services, hospital care, prescription drugs, maternity care, and many other important health care services. Many of the Republican ideas for replacement would limit these benefits and give insurance companies more power to reduce benefits by allowing states to decide which benefits should be included in insurance plans.

• Loss of Employer-Sponsored Insurance

  Under the ACA, employers with 50 or more full-time employees must provide an offer of health coverage to their workers. Employers have a stake in providing insurance to their full-time employees—a healthy workforce is a productive workforce. However, some Republicans replacement plans include a repeal of the employer mandate. This would likely lead to a loss of coverage for people who receive health insurance through work. Our recent blog describes the ACA’s employer responsibility provision in more depth.

• Weakened Health Insurance Standards

  Some of these proposals allow insurers to sell “across state lines.” This may sound harmless enough. However, it will result in some insurers locating their operations in a state with the weakest regulations for and oversight of health insurance companies and then selling their products to other states. For example, the Health Care Choice Act, would allow insurance to be sold across state lines. Consumers could lose benefit protections and premium rate protections, among others. Our issue brief, Perils of Health Insurance Sold across State Lines, offers a fuller explanation of the problems with this proposal.

Republican proposals would reverse the ACA’s progress in eliminating significant gaps in health coverage

It is important to note that all of these plans and ideas lack critical details, and this list is by no means exhaustive. But we do know that repealing the ACA and replacing it with any or a combination of the above-mentioned ideas would jeopardize the access consumers now have to affordable, comprehensive, high-quality health coverage through the ACA.

Republican plans would provide coverage to only a fraction of the millions of consumers currently enrolled in health insurance through the Affordable Care Act. These proposals would take us back to days when more Americans were uninsured or underinsured, coverage was unaffordable for millions of families, and health insurers could discriminate against consumers who most needed health insurance. One way Republicans could try to enact some of these ideas is through the congressional budget process. Fortunately, any attempt to replace the ACA with any of these harmful proposals would likely be vetoed by President Obama.