Sen. Dean Heller, R-Nev., ended his news conference announcing his opposition to the Senate draft health bill by attacking its effect on premiums.
Heller noted it would be a lie to say that the bill would lower premiums because there “isn’t anything in the bill that would lower premiums.”
Heller’s attack follows a statement from four conservative senators opposing the bill in its current form (Sens. Mike Lee, Rand Paul, Ted Cruz, and Ron Johnson) in part on the grounds that it didn’t do enough to bring down costs. Whereas conservatives have been focusing on how the bill preserves too many of Obamacare’s regulations to be able to drive down premiums, liberals have argued that the revised subsidies helping individuals purchase insurance are too paltry.
The comments come as Democrats and some healthcare analysts say that the new tax credits in the Senate’s health bill will raise out-of-pocket costs for low-income individuals. The attacks from Democrats attempt to undercut a key argument from Republicans that the bill is needed to provide relief from major premium hikes in Obamacare.
“We should be working on measures that give people better coverage at a lower cost, not forcing them to pay more for less,” said Rep. Suzan DelBene, D-Wash., in a statement Thursday.
Republican supporters counter that the bill would be beneficial to low-income people who live in states that didn’t expand Medicaid. To be eligible for tax credits under Obamacare, you have to earn between 100 and 400 percent of the federal poverty level.
Under the Senate bill the eligibility is zero percent to 350 percent. Republicans say that this means that people who are not eligible for the Medicaid expansion in states that didn’t expand can get tax credits.
“Even if you live in a state like Texas that did not expand Medicaid, that people … will now have access to tax credits they can use to buy private insurance,” said Sen. John Cornyn, R-Texas, the second-ranking GOP senator, on Fox News Friday.
But experts question if they will be able to get affordable healthcare with those tax credits.
Currently about 2.6 million poor adults fall into the Medicaid gap, where their states didn’t expand the law and they aren’t eligible for tax credits, tweeted Larry Levitt, senior vice president of the Kaiser Family Foundation.
That number could grow as the Medicaid expansion is eventually phased out, he added.
However, low-income people will face higher out-of-pocket costs on the basis of how the tax credits are structured, several experts say.
Obamacare’s tax credits are tied to a benchmark silver plan, which is the middle tier of Obamacare plans.
The draft bill keeps Obamacare’s tax credit structure around till 2020. But after that year it would tie the tax credits to a bronze plan starting in 2020, which is a cheaper plan but has higher out-of-pocket costs than a silver plan.
“The tax credits are going to be lower because they are based on something that is cheaper,” said Katherine Hempstead, senior adviser for the healthcare nonprofit Robert Wood Johnson Foundation.
Currently a bronze plan has an average deductible around $6,000, Levitt said.
“For someone with poverty level income of $12,060, insurance with a $6,000 deductible as under the Senate bill isn’t really insurance at all,” he tweeted.
For someone with poverty level income of $12,060, insurance with a $6,000 deductible as under the Senate bill isn’t really insurance at all.
— Larry Levitt (@larry_levitt) June 23, 2017
In addition, the Senate bill keeps intact the law’s cost-sharing reduction payments to insurers that lower the cost of copays and deductibles for low-income people from 2018 to 2019.
There is another potential reason that the draft bill doesn’t abruptly end the payments.
“What I think going on there is this is buying time to find a longer-term resolution to the problem,” said Joseph Antos, a scholar with the right-leaning American Enterprise Institute. “Part of the resolution will show itself if the Senate bill would actually make a law.”
Antos argued that state waivers could enable insurers to offer cheaper plans that cover fewer benefits, blunting the impact of the higher costs and lowering costs as compared with Obamacare.
“Potentially states that do a waiver or could see some aggressive changes that probably would open the door to lower cost plans that may not cover absolutely everything,” he said.
Republicans have argued that insurers need more flexibility to offer plans that are cheaper and more tailored to consumers wants. But Democrats contend that the plans offer skimpy coverage.
“This is one of the fundamental tensions,” Hempstead said. “Some people feel like you should be allowed to buy less-comprehensive coverage, and others say that creates too much of a risk for people that need comprehensive coverage.”
Insurers would be less inclined to offer plans with comprehensive coverage if they didn’t have to because the only people that sign up for those plans would be sicker individuals, Hempstead said.
“That was the way it was before the Affordable Care Act,” she said. “You couldn’t really buy comprehensive coverage in the individual market; you could only buy skimpy coverage.”
Antos doubted that a lot of states would take up the waivers.
“You are not gonna see elected officials in states want to take on well-organized patient groups,” he said.
