A Few Implications of the GOP Healthcare Plan

 

 

Cutting Through the Mess

Yes, healthcare is complicated, and it can take a while to sift through all of the government speak, legalese, and healthcare jargon—to say nothing of the sheer volume of the legislation itself. Here I’m going to summarize some of the recent findings from the Congressional Budget Office (CBO), which can be found here.

 

#1: Budget Deficit Impact

The CBO estimates that the GOP healthcare plan would decrease the federal budget by $337 billion over the next 10 years. This is due in large part to reductions in Medicaid benefits and subsidies to nongroup health insurance through the ACA

#2: Insurance Coverage Impact

The CBO estimates that 14 million fewer people will have insurance in 2018 due to the GOP healthcare plan. This is largely due to the elimination of the personal mandate that requires individuals to purchase their own health insurance if it’s not provided through their employer or any other means. Many of the people who have purchased insurance in the past few years in order to avoid a penalty, the CBO asserts, will instead forgo health coverage.

 

#3: Stability of the Insurance Market

The stability of the insurance market—that is, the ability of the insurance companies to offer adequate insurance at premiums that are financially viable to both the insurer and the patient—will remain largely intact under the proposed legislation. While the GOP plan removes subsidies for non-group health insurance, it also adds tax credits and other measures that, according to the CBO, will be sufficient to attract enough low-risk, low-cost consumers to the insurance market, which has a stabilizing effect.

 

#4: Coverage for Pre-Existing Conditions

Under the proposed GOP legislation, people with pre-existing conditions cannot be denied insurance coverage. Other provisions under the ACA for out-of-pocket expenses and lifetime & annual payout caps will also remain intact. Some have pointed out, however, that the new legislation requires insurers to charge a 30% surcharge for up to 12 months if a patient has been uninsured for more than 63 days in the previous year. While this surcharge would apply to anyone buying non-group insurance, some people view it as a weakening of protections for people with pre-existing conditions.

Soon I will post a follow-up with more implications, especially as they relate to businesses supporting the healthcare industry. To be continued…

[UPDATE]: As you already know, the healthcare bill failed! Instead, I will follow up at a later date with some thoughts on the next proposal

About the Author

Tom Carmona is an early-stage health tech investor and adviser, healthcare marketer, and CEO here at Makefront Health. He has been a founder, core team member, adviser, or investor at several healthcare technology and healthcare consulting services companies. His experience spans various tech-enabled healthcare fields including population health management and medication management. He lives in Makefront’s home of Chicago with his wife and two dogs.