A House Republican plan to replace health insurance subsidies available through the Affordable Care Act with tax credits based solely on age could make coverage unaffordable to older and lower- to middle-income Californians, according to Covered California, the state’s health insurance exchange.
An analysis by Covered California said the proposed American Health Care Act would cut support to buy health insurance by 40 percent in 2020.
“Providing 40 percent less funding means there will be less coverage,” said Peter V. Lee, executive director of Covered California. “It means fewer Americans will be able to afford to purchase health insurance.”
Republicans have disputed claims that fewer people will purchase insurance.
In Fresno, the new law would increase the premium amounts some consumers would pay, according to the Covered California analysis.
A single 27-year-old earning $17,000 a year in Fresno County would see premiums more than double – to $114 per month – compared to $53 per month under the current law. And a 62-year-old earning $30,000 a year would see the premium double from $209 a month to $436 per month.
It means fewer Americans will be able to afford to purchase health insurance.
Peter V. Lee, executive director Covered California
The Covered California study compared the financial subsidies in the current Affordable Care Act to that in the proposed health law. The study released Tuesday came a day after the Congressional Budget Office estimated the new legislation would reduce the federal deficit by $337 billion from 2017 through 2026. The CBO savings would come mainly from reductions for Medicaid (known as Medi-Cal in California) and from the elimination of subsidies.
Lee said Tuesday that instead of receiving subsidies – now based on age, income, family size and where a consumer lives – the proposed legislation would base a tax credit that would range from $2,000 to $4,000 on age alone.
Covered California is still doing an analysis of the full effects on consumers of the proposed law, but Lee said: “It’s very clear to us that the most critical element of the ACA that has expanded coverage is the subsidies that make coverage possible.”
Nearly 90 percent of consumers who are participating in Covered California receive subsidies, Lee said. Statewide, subsidies for 1.4 million Californians totaled $4.2 billion in 2016; the average subsidy was $5,300 per household. But 12 percent of the people received more than $10,000 per year to help pay for coverage.
In Fresno County, 27,876 people received subsidies that totaled $79.5 million in 2016, according to Covered California. The average monthly premium was $84.80 and the average monthly subsidy was $310.56.