The Better Care Reconciliation Act, the Senate’s version of a replacement for the Affordable Care Act, will help you if you are (1) downright rich or (2) young, healthy, and reasonably affluent. But older, poorer, or sicker people can look forward to higher costs and skimpier or nonexistent coverage.
That’s the unavoidable conclusion of the new analysis of the legislation from the nonpartisan experts at the Congressional Budget Office. Here are four major changes it would make from the current law.
1. Rich people will get a big tax cut
The nonpartisan Tax Policy Center puts it bluntly: “The BCRA is an enormous tax cut that would largely benefit the nation’s highest income households.”
This mainly comes from eliminating the ACA’s individual taxes on high earners and investment income as well as its tax on health insurance companies. Low- and middle-income people would get an average tax cut of a few hundred dollars, whereas people in the top 1 percent, earning $875,000 or more, would enjoy an average cut of $45,000. And the uber-rich top 0.1 percent, with incomes of $5 million and up, would be able to buy an extra boat or Maserati with their $250,000 average tax savings.
2. Poor people will get kicked off Medicaid
The CBO says that by 2026, 15 million people will lose their Medicaid benefits. That’s the lion’s share of the 22 million projected to lose health coverage because of the Senate bill, which slashes $772 billion out of the Medicaid budget.
It does this in two ways. One, it ends the ACA’s expansion of Medicaid so that low-income, childless, non-disabled adults will no longer be covered. And two, it caps the growth of most other types of Medicaid payments so they will, by design, increase more slowly than actual medical costs. “No amount of administrative or regulatory flexibility can compensate for the federal spending reductions that would occur as a result of this bill,” says a statement from the National Association of State Medicaid Directors.
3. Millions will no longer be able to afford to buy insurance on their own
The Senate bill cuts $408 billion from subsidies the ACA has given low- and middle-income consumers to help them buy insurance on their own. As a consequence, consumers won’t get as much financial help to buy private insurance. Moreover, older consumers will be expected to contribute a bigger percentage of their income to premiums than younger ones; under the ACA there’s no difference.
Overall, the Kaiser Family Foundation calculates the average premium for a midlevel Silver plan would increase by 74 percent, but for consumers between the ages of 55 and 64 the cost would more than double. (To see how the BCRA would affect someone with your specific age, income level, and location, use Kaiser’s interactive calculator.)
In addition the BCRA does away with the special subsidies that the ACA provides to reduce the out-of-pocket costs of lower-income consumers.
The CBO expects that many lower-income consumers whose deductibles today are less than $300 would end up with out-of-reach deductibles of $6,000 or more. It projects that by 2026, the number of low-income adults without health insurance will more than double, simply because they can’t afford it.
4. States can roll back protections for pre-existing conditions
The ACA requires all health insurance to cover a set of essential health benefits with no annual or lifetime spending limits. The BCRA would allow states to opt out of these requirements and the CBO expects that about half of them will.
For instance, a state could allow insurers to sell health plans that don’t cover maternity care, substance abuse care, expensive specialty drugs for cancer and auto-immune diseases—or, basically, any type of medical treatment except preventive care.
And once these treatments are no longer considered “essential,” even if insurers do cover them, they can cap how much they spend on them.
While insurers will still have to sell coverage to anyone who wants it, regardless of pre-existing condition, “they could stop covering benefits that they know attract sick people,” says Karen Pollitz, an expert on the individual market with the Kaiser Family Foundation.
This would lower premiums for healthy people, but people with pre-existing conditions might be forced to buy costly riders or pay out-of-pocket for their medical needs.
Nancy Metcalf is an award-winning independent journalist specializing in health topics. A senior writer and editor for Consumer Reports for more than 25 years, she is a nationally recognized expert on health insurance and health reform.