A report released Tuesday by Standard & Poor’s analyzes the potential effects that the GOP’s potential Obamacare replacement could have on Americans. According to the report, as many as 10 million people who are currently insured under the Affordable Care Act could end up uninsured if the newly proposed American Health Care Act becomes law. The AHCA was proposed by the House of Representatives on Monday.
The main focus of the S&P analysis was how the AHCA would “fundamentally change federal financing of healthcare, especially for the Medicaid and individual insurance segments.” The report focused on the impact that AHCA would have on two segments of the population: individuals under the age of 65 who are eligible for coverage under Obamacare, and those who qualify for Medicaid.
Because the AHCA would allow insurance companies to charge older customers at a higher rate compared to younger people than Obamacare does, S&P expects that premiums will increase for people between the ages of 45 and 64, leading people in that age group to drop their insurance coverage. At the same time, they predict that people between the ages of 21 and 35 will enjoy lower premiums (people will still be able to stay on their parents’ plans until age 26 under the AHCA). As a result, they expect the number of younger people with insurance to increase, but that even taking this into account, there will be a net decrease of between 2 and 4 million people insured under the age of 65 in the year 2019. Despite the reduction in people with coverage, insurance companies are expected to have greater profits, because it would be older (and less healthy) customers who go without insurance, so a greater percentage of those with insurance will be younger and healthier.
As far as Medicaid goes, the S&P report expects even more drastic reductions in coverage. Due to a proposed change in Medicaid funding, they expect a significant drop-off. Obamacare provides for a Medicaid expansion for which the AHCA would continue to provide federal funding until 2019. After that, however, many states “may be unable to continue funding new expansion enrollees,” the report says. As a result, they expect a reduction of between 4 and 6 million Medicaid enrollees.
Overall, fewer people are expected to have health insurance under the proposed replacement bill, with insurance companies potentially making more money. The AHCA has yet to pass, however, and there could still be changes made that would alter these projections, as the report points out.
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