Tuesday, July 11, 2017

The GOP health bill would cut benefits for very poor households by an average of $2,500 a year, economists say


By Max Ehrenfreund July 11, 2017

The Republican bill to undo the Affordable Care Act, also known as Obamacare, would bring down taxes for the very rich while eliminating thousands of dollars in benefits for the typical poor or middle-class household, a new analysis shows.

The typical household with more than $200,000 a year in income would pay $5,500 less annually in taxes under the recent plan put forward by GOP senators. By contrast, households earning less than $10,000 a year would lose out on an average of about $2,600 in federal benefits annually, according to the analysis published Tuesday by the nonpartisan Urban Institute and Brookings Institution.


At the same time, the bill would sharply limit spending on Medicaid, the federal program that provides insurance to poor Americans along with roughly half of pregnant women and nearly two-thirds of all nursing-home residents.


The analysis also only describes how much federal health-care benefits cost, not how much they are worth to the people who receive them. For instance, the GOP bill could result in steeper out-of-pocket deductibles and co-payments for many households. As a result, some consumers might feel like the plans on offer -- and the federal benefits they are using to buy them -- are essentially worthless.


As an example, the GOP bill would give insurers more freedom to charge older customers more. Because the upper middle class receives little in the way of federal subsidies for private insurance, older consumers in this group could wind up paying much more out of pocket.

The Congressional Budget Office issued projections for a typical 64-year-old buying insurance individually with $57,000 a year in income. That consumer could expect to pay $6,800 annually for a "silver" plan under Obamacare, after accounting for the subsidies, but would have to pay $20,500 a year for the same plan under the GOP bill.


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