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Estimates on AHCA Impact Issued as Hospital Community Awaits CBO Scoring

March 10, 2017

As legislators, policymakers, and the hospital community await the scoring on the American Health Care Act (AHCA) by the Congressional Budget Office (CBO)—likely to be issued next week—a number of national policy organizations have issued estimates regarding the impact of the proposal, which would partially repeal and replace the Affordable Care Act.

The Kaiser Family Foundation has released an interactive map that provides county-level estimates of the premium tax credits consumers receive under the AHCA as compared to those that would have been received under the Affordable Care Act (ACA). The foundation concludes that in general:

  • Older, lower-income people or people who live in high premium areas (such as Alaska or Arizona) receive higher tax credits under the ACA than they will under the AHCA
  • The AHCA benefits younger, higher-income people and those who live in lower premium areas (such as Massachusetts, New Hampshire, and Washington)

The Brookings Institute, in partnership with the USC Schaeffer Center for Health Policy & Economics, estimates that the replacement provisions of the AHCA will reduce the number of insured Americans by 15 million people as a result of:

  • Repeal of the individual mandate penalties, and enacting a late enrollment “continuous coverage” surcharge penalty
  • Phasing out the enhanced federal financial participation for Medicaid expansion and implementing a per capita cap
  • Replacing the current subsidy structure for individuals in the federally-facilitated health insurance marketplace with tax credits

The Center on Budget and Policy Priorities also released a report that studies the impact of the tax credit proposals in the AHCA as compared to the subsidies available under the ACA, finding:

  • The impact of the tax credits varies widely across state and will significantly impact the affordability of health insurance coverage in a number of states
  • The increase in health insurance premiums after tax credits is more significant for lower-income and older consumers (those not yet eligible for Medicare)
  • The impact on Pennsylvania as a whole ranks 20th out of the 39 states who participate in the federally-facilitate health insurance marketplace

The Commonwealth Fund issued an analysis on the potential impact the premium surcharge under the AHCA would have on those who go without health coverage for any period of time. The surcharge is established under the AHCA, replacing the ACA requirement that individuals have health insurance or face a tax penalty. Highlights from the Commonwealth Fund’s analysis include:

  • More than 30 million adults reported a gap in health insurance in 2016 that last longer than three months (the time period after which the surcharge penalty in the AHCA could be imposed)
  • Premium surcharges will be higher for older people than for younger people under the AHCA
  • Adults with moderate incomes would face higher penalties for having a coverage gap under the AHCA than they would have faced under the ACA

As HAP awaits the CBO scoring to fully assess the potential impact of the ACHA provisions, HAP remains concerned about the potential impact on Pennsylvanians’ access to affordable health insurance coverage from phasing-out enhanced federal financial participation for Medicaid expansion, establishing a per capita approach to Medicaid funding, and replacing the federal health insurance marketplace subsidies with tax credits.

HAP continues to express these concerns to the Pennsylvania Congressional delegation, along with concerns regarding the potential financial impact on Pennsylvania hospitals and health systems that the ACHA will likely have.

In addition, HAP President and CEO Andy Carter issued a statement in response to the ACHA, noting that an initial review of the act raises concerns that it does not fulfill HAP’s core principle that any replacement plan must ensure continuity of coverage and care. Carter also expressed concern about the act in an Op-Ed appearing in The Inquirer. “This unraveling of health coverage will threaten the health and financial sustainability of those on the losing end, and our nation as a whole,” said Carter.

Additional information and resources about how a repeal of the ACA would impact Pennsylvanians is available on the HAP website.

For additional information, contact Jeffrey Bechtel, HAP’s senior vice president, health economics and policy, or Laura Stevens Kent, HAP’s vice president, federal legislative advocacy.

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