Lynn Bailey is not optimistic about what the proposed changes to America’s health-care law will mean for low-income South Carolinians who depend on government help to pay for insurance.
U.S. House Republicans unveiled their proposed rewrite of the Affordable Care Act, also known as Obamacare, Monday will a plan that would give consumers tax credits — not federal subsidies — to buy insurance.
Bailey, a Columbia health economist, offered a quick summation of what those changes could mean for almost 200,000 low-income South Carolinians. “Low income folks are screwed.”
Another S.C. expert predicted fewer Americans will have insurance under the GOP proposal.
S.C. Democrats ripped the proposal. A S.C. GOP congressman panned the proposal — as “Obamacare Lite” — but added it is just the starting point for negotiation.
In 2020, up to 190,000 South Carolinians could lose the support that they currently get from the federal government to buy health insurance. Instead of federal subsidies to buy insurance, House Republicans would offer tax credits to those South Carolinians.
At the end of January, the latest enrollment period for the Affordable Care Act, 194,440 South Carolinians had signed up to buy insurance on federal health exchanges. Of those, 98 percent qualified for assistance making their insurance payments because of their low income.
Up to 1 million South Carolinians could be affected if the cost and size of the federal-state Medicaid program is capped and, then, cut, as the House Republicans propose.
The GOP proposal also removes the requirement that larger employers offer insurance and individuals buy insurance, a provision — initially proposed by the conservative Heritage Foundation — that is despised by conservatives.
But the GOP proposal, called the American Health Care Act, leaves in some of Obamacare’s protections. For example, insurers could not refuse to sell insurance to Americans with pre-existing conditions and adult children — up to age 26 — could remain on their parents’ insurance.
“Our bill specifically protects those with pre-existing conditions, allows young adults to remain on their parent’s insurance until they are 26, and provides a stable transition to our system of lower costs and increased options,” said U.S. Rep. Joe Wilson, R-Springdale.
Prices also could come down but for less comprehensive coverage, said Robert Hartwig, professor of risk management and insurance at the University of South Carolina.
Loosening the rules on insurers will allow them to offer a wider variety of plans at a range of prices, something current requirements make difficult, Hartwig said. “Over time, the mandate for what’s called ‘essential benefits’ will be done away with.”
Instead, insurers will tailor their offerings to the needs of different clients, Hartwig said, predicting insurers will offer more bare-bones, “catastrophic” coverage.
But Bailey says consumers may end up buying bare-bones plans only to discover later that they don’t cover what they need.
“That’s how they control costs,” Bailey said. “The consumer has to pick up more, which discourages preventative care or maintenance care.”
Even as cheaper insurance plans proliferate, Hartwig says the number of insured Americans will go down. “Millions will make the decision not to get coverage” because it no longer would be required, he said.
Democratic supporters of ACA — the crowning accomplishment of Democrat Barack Obama’s presidency — quickly blasted the GOP proposal.
“The bill released by House Republicans last night is no more a replacement for the Affordable Care Act than a newspaper is a replacement for an umbrella,” said Jaime Harrison, chairman of the S.C. Democratic Party. “If it becomes law, millions of people will lose their health insurance, and millions of others will be forced to pay more for less.”
U.S. Rep. Jim Clyburn, D-Columbia, said the bill is “a big loser for millions of seniors, low-income citizens and sick people, and is a big winner for insurance companies and very wealthy people.
“In short, under the Republicans’ plan, the rich gets richer and the poor gets sicker.”
The GOP bill also is getting push back from some conservative Republicans, including U.S. Rep. Mark Sanford, R-Charleston, who say the proposal amounts to “Obamacare Lite.”
“I’m concerned from a conservative standpoint with the idea of refundable tax credits,” Sanford said. “It seems like a new entitlement, and entitlements are easy to start and difficult to stop.”
Sanford wants any proposed legislation to lean on market mechanisms to replace federal subsidies, driving down prices by increasing competition in insurance. Currently, the only health-insurance provider offering individual plans under the Affordable Care Act in South Carolina is BlueCross BlueShield of South Carolina, he noted.
“Nothing against BlueCross BlueShield,” Sanford said. “But if I go down I-95 and there’s only one gas station, it’s not going to be the most competitive on prices.”
Asked if the bill could pass the Republican-controlled House without support from the GOP’s most conservative bloc, Sanford borrowed a phrase from President Donald Trump.
“In Trump’s words,” Sanford said, “this is the opening bid in a negotiation.”
ACA and SC
194,440 South Carolinians received health care through Obamacare’s federal marketplace in 2016-17
98 Percent received premium assistance because their income was only 400 percent of poverty or less
81 Percent received additional cost assistance because their income was only 250 percent of poverty of less