Trump's Tax Bill Would Decimate the Affordable Care Act
Republicans plan to allow for the expiration of subsidies that help people afford individual health insurance plans, a move that would lead to a steep rise in prices for Americans who purchase coverage through the ACA marketplace.
The version of the reconciliation bill passed Thursday by the House of Representatives would also prohibit passive re-enrollment for ACA plan users who receive financial assistance; increase penalties for incorrect reporting of income; place further restrictions on enrollment periods; and create new bureaucratic hurdles to obtaining premium tax credits, in ways that experts say will cause many to forgo or lose coverage.
In addition to the bill's efforts to force millions off Medicaid and trim payments to health care providers for patients on the safety-net program, which provides health insurance to low-income and disabled Americans, the legislation would slash states' funding for Medicaid if they allow undocumented migrants or 'lawfully present' individuals (mostly children) to enroll in ACA plans.
The sum total of Republicans' health care policies — including their changes to Medicaid and the ACA, and the expiration of expanded premium subsidies — are expected to result in roughly 14 million Americans losing their health insurance coverage. In a letter to House leadership, 18 state-level ACA marketplaces warned of the potential devastation.
'The Americans who depend on the marketplaces include working parents, small business owners, farmers, gig workers, early retirees, and lower and middle-class individuals of all ages, political views, and backgrounds who drive our local economies and make both our rural and urban communities thrive,' they wrote. 'These proposals, in total, will drastically diminish the progress on health coverage that the United States has made in the last decade via marketplaces. Only the sickest patients may remain in the marketplaces, skyrocketing costs for everyone.'
'Millions of Americans will lose their health coverage, local hospital systems will face unprecedented financial strain, state operational costs will spike in order to implement burdensome new federal rules, and all of this is likely to result in insurance carriers pulling out of local insurance markets. Some states may even be forced to walk away from state-based marketplaces entirely,' they warned.
'This bill's intent is to drown Americans in paperwork in order to make it harder to get on and stay on coverage,' Anthony Wright, Executive Director at Families USA, told Rolling Stone.
'Right now, if you are apply, if you are in the exchange — whether it's DC Health Link, or Covered California, or New York State of Health, or healthcare.gov — and you are applying for coverage with a tax credit, right now most of those systems are based on electronic verification,' Wright says, explaining that state marketplaces have access to federal systems so they can — 'not automatically, but pretty seamlessly' — verify a person's eligibility.
The current Republican bill would eliminate provisional eligibility for advanced premium tax credits, and deny the tax credits to consumers while they await a determination. It would also prohibit 'passive re-enrollment' for individuals who've purchased ACA plans with advanced premium tax credits. The new system would require plan-holders to re-submit their verification during the enrollment period. If not, they would be re-enrolled in a plan without a tax credit, which would in effect put them on the hook for the full price of their premium, which they likely cannot afford given their income status qualified them for a tax credit. According to the Commonwealth Fund, 93 percent of ACA marketplace enrollees use an advanced premium tax credit to pay for their plans.
While some of the changes would result in direct coverage denials, the majority of lost coverage would likely be due to individuals opting out of the system due to the much higher premium costs they'd be expected to absorb, as well as the confusing, time-consuming, and nonsensical red tape Republicans are deliberately placing on them.
'They're actually taking us back to the Stone Age of what it means to sign up for coverage in terms of paperwork and bureaucracy,' says Wright, adding that there are electronic systems to make the process 'much easier, and we have been doing it for the last 15 years.'
Larry Levitt, executive vice president at the health research organization KFF, tells Rolling Stone that the tax bill is 'not [a] repeal of the Affordable Care Act, but it, in many ways, has the same effect of dramatically increasing the number of people without health insurance.'
After the House passed the reconciliation bill Thursday, Levitt wrote on X that 'it would represent the biggest rollback in federal support for health care ever.'
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