A half million Texans could be without insurance under GOP health care plan

Originally Published in the Houston Chronicle March 18, 2017

As many as a half-million Texans could become uninsured under the Republican plan to replace the Affordable Care Act, wiping out at least half the gains the state has made in reducing the number of uninsured residents in recent years, according to health care analysts.

Texas still has the nation’s highest percentage of people without health insurance, but that uninsured rate has dropped significantly, falling to about 19 percent from 26 percent over the past four years. About 1 million more Texans gained coverage under the health care overhaul known as Obamacare, which became law in 2010.

Under the Republican plan to repeal and replace the health care law, 500,000 could lose coverage by 2020, either through changes in federal assistance to purchase coverage and Medicaid, the government health care program for the poor, or the end of individual mandates that require people to have insurance, said Ken Janda, president and CEO of Community Health Choice whose company offers insurance plans on the federal exchanges.

Analysts such as Vivian Ho, health economist at Rice University’s Baker Institute for Public Policy, advocates like Elena Marks, CEO of Houston’s Episcopal Health Foundation, and insurers, such as Molina Healthcare, confirmed Janda’s estimates.

“Certainly, Texas is going to have more uninsured people again,” Janda said. “I don’t see much positive coming out of Congress.”

House Republicans unveiled their long anticipated replacement plan, The American Health Care Act, on March 6 satisfying seven years of promises to do away with Obamacare. But the replacement plan met with swift and sharp criticism. Some, including insurers and health care advocates, worry it would leave too many Americans without coverage. Others, mostly conservatives, say it doesn’t go far enough in removing government from insurance markets and individual decisions.

Early last week, the nonpartisan Congressional Budget Office released its analysis of the Republican proposal, estimating that it would slice $337 billion from the federal deficit by 2026, but increase the number of uninsured Americans by 24 million during the period. An estimated 14 million would lose coverage by next year alone.

The Trump administration slammed the CBO findings as unreliable, but some Republicans found things to like about the estimates. Rep. Kevin Brady, The Woodlands Republican and one of the chief architects of the plan, said in a statement shortly after the CBO released its report that it “confirmed our legislation protects taxpayers, decreasing ballooning deficits by more than $300 billion and curbing growing health care costs.”

But when asked Friday if he also agreed with the CBO’s prediction of a spike in the uninsured rate, Brady said there were too many unknown factors to make such conclusions. “These are incredibly difficult estimates,” he said in a meeting with the Houston Chronicle’s editorial board.

‘Fall off the edge’

In addition to having the nation’s highest uninsured rate, Texas also has the least accessible and affordable health care system, according to a study released last week by the Commonwealth Fund, a foundation that researches health care issues.

The Obamacare replacement proposed by House Republicans would benefit some Texans, but hit others hard, especially the poor and those nearing retirement – typically a time when people need health care more often.

One of the major provisions is swapping the current income-based subsidies for a tax credit based on age in the individual market, excluding those making more than $75,000 and couples earning more than $150,000.

People under 30 get a tax credit of $2,000, while those in their 30s would receive $2,500. The tax credit would rise to $3,000 at 40, $3,500 at 50 and $4,000 at 60.

Some people would clearly benefit. For example, a 27-year-old in Harris County making $40,000 a year gets no subsidies under the Affordable Care Act, but would get a $2,000 credit under the Republican plan, according to calculations by the Kaiser Family Foundation.

But many others don’t come out as well.

For instance, a 60-year-old in Harris County making $30,000 per year would get roughly $6,180 in assistance in 2020 under the Affordable Care Act, according to the Kaiser Family Foundation. Under the Republican plan that same person would get a flat tax credit of $4,000, the analysis showed.

In addition, the Republican health bill allows insurers to charge five times more for older people that it does for younger ones. Under the Affordable Care Act, insurers can charge no more than three times the premiums of younger people. “It’s a double hit for the lower income, older folks,” said Janda.

Other age groups are worried, too.

Meredith Ryan is 46. She makes about $21,000 a year as a paralegal. She also has Type I Diabetes.

For many years the Kingwood woman was uninsured, scraping together money to treat her disease out of pocket. She became insured under the ACA in 2013.

Currently she has a silver plan offered by Community Health Choice and pays $103.42 per month. She gets a $281 per month subsidy to lower the cost. The total price of her plan is $3,372 per year.

Under the Republican plan she would receive a $3,000 tax credit, nearly enough to cover her insurance costs, but she worries about increased deductibles or other out-of-pocket costs in a future plan. She is especially wary that the Republican proposal might allow insurers to impose steep rate increases on people, like her, with pre-existing or chronic conditions.

“I can barely afford rent,” she said, “If it is too expensive I fall off the edge and who knows where I’ll land.”

Food … or medicine?

Another key provision in the Republican plan – one that critics of the ACA have clamored for – is the elimination of the individual and employer mandates that make insurance for most Americans mandatory or face a fine.

Proponents of the plan said that by eliminating the mandate they are giving people more freedom, including the freedom to not have insurance. The law replaces the mandate with a 30 percent surcharge to restart coverage if a policy lapses.

One of the problems is that young, healthy people are the most likely to forgo insurance, leaving a pool of older, sicker people who use health services more frequently and leading to higher costs for those who buy insurance and higher risks for companies that issue it.

Dr. Mario Molina, CEO of the California-based Molina Healthcare, a Fortune 500 company, said in an interview he cannot yet commit that his company will be in the Texas market next year on the exchange because of the uncertainty that currently exists surrounding the promise to repeal and replace the ACA. Currently his company is one of only three insurers who offer ACA coverage in Houston.

“I am very nervous,” he said. “There is little that Congress has done so far that indicates the insurance market will be stable.”

Blue Cross and Blue Shield of Texas, which offers plans on the exchange in every Texas county, including Harris, also expressed concerns about the uncertainty of federal health care policy.

“It’s imperative that we have market stability and regulatory certainty,” the company said in an emailed statement. “We will make decisions about our product offerings for 2018 once we have more information about any legislative or regulatory changes that will be made impacting the individual health insurance markets.

Health care providers, meanwhile, worry what will happen if hundreds of thousands of Texas residents lose insurance. Katy Caldwell, executive director of Houston’s Legacy Community Health, which serves many low-income patients, said fewer insured patients will mean longer wait times as clinic staff become overwhelmed. But a jump in the uninsured rate would create more than inconvenience, she said.

“The thing that really concerns me is people foregoing their medication. I hear it all the time now: ‘I have to choose between food and my medicine’ or ‘I cut my pill in half because I can make a 30-day supply last 60 days,'” Caldwell said. “This has every potential to get worse.”