Those who rely on financial support under ACA are likely to find themselves entering new terrain.
As the Administration and Congress move forward with new health care proposals (Trump/RyanCare), they are grappling with the true meaning of “repeal and replace.” This blog post will describe one way of looking at how different groups are likely to be impacted by repeal and replace under “Trump/RyanCare.”
Market Access vs Financial Access
The Affordable Care Act (ACA) sought to provide increased access to health insurance – and did so by addressing two different sorts of access: “market” access (“If I apply for a policy, can I get one?”) and “financial” access (“Can I afford a policy?”). This blog post will describe how Trump/RyanCare is likely to treat the market access provisions of ACA – and how that treatment is likely to differ from the approach to the financial access provisions.
What might change less?
The market access provisions of the ACA are more popular and more likely to remain in a Trump/RyanCare bill. These include provisions providing coverage to those with pre-existing conditions, keeping children on parent’s policies until age 26 and restrictions on lifetime caps. It is anticipated that these rules will be modified to adress insurance company complaints about ACA – but, by and large, the outlines of the Obamacare market access provisions should be recognizable in the comparable market access provisions of Trump/RyanCare. Call it “market access lite.”
What might change more?
This financial access component of ACA was tackled using a number of income redistribution provisions. Some of these redistribution provisions were explicit –new taxes on wealthier individuals, subsidies to purchase coverage for those under 400 percent of the Federal poverty level, and Medicaid expansion. Other redistribution provisions were more subtle – transferring money from younger Americans to older Americans (by operation of the 3:1 cap on the age grading of premiums) and from healthier Americans to sicker Americans (by operation of limitations on underwriting for preexisting conditions).
Given a deep philosophical opposition to income redistribution programs among Republicans, one theme emerging from Washington is that any repeal and replace legislation is likely to eliminate the majority of financial access provisions in the ACA. Instead, any financial supports provided under a replacement bill are likely to rely on traditional tax incentives for those who purchase coverage (such as deductions and tax credits). These tax incentives will be supported by increased focus on individual health savings vehicles (primarily HSAs). Financial access may be rounded out by some federal funds to states to replace the Medicaid provisions of the ACA.
But, at the end of the day, the financial access provisions of a Trump/RyanCare bill are likely to bear little resemblance to the financial access provisions of the ACA.
What might this mean?
This means that those promoting Trump/RyanCare will focus their message on accessibility rather than affordability. To the extent they discuss affordability, they will focus on the aspirational goal of making health care more affordable in the long term (i.e., after the next election cycle) as insurance companies modify plan design and pricing, as consumers spend more of their own money through broader use of HSAs, and as the market achieves greater transparency in the cost of medical services and prescription drugs.
At the end of the day, those focused on the market access provisions of ACA will find familiar provisions under Trump/RyanCare. By contrast, those focused on the financial access provisions of ACA are more likely to find themselves entering new terrain
