Implications of Senate Tax Plan’s Repeal of Individual Mandate on Florida: Almost 900,00 Fewer Insured Floridians, Higher Costs
If the proposed tax plan becomes law, approximately 900,000 Floridians will lose their health insurance and many will face higher premiums.
Background: The Senate’s Republican leadership is negotiating with members of the party’s rank-and-file to bring its version of the Tax Cuts and Jobs Act to a floor vote. The plan includes a provision to repeal the individual mandate in the Affordable Care Act (ACA). Earlier this month, the House passed a similar tax cut bill without repealing the individual mandate. President Trump has indicated that he would sign the plan regardless of whether it repeals the ACA’s individual mandate or not.
Millions of Americans Nationwide and Hundreds of Thousands Of Floridians Will Lose Health Insurance: The CBO projects that 4 million Americans will lose health insurance in 2019 nationwide and that number rises to 13 million by 2025. Of the 13 million, five million with low incomes will lose Medicaid coverage, five million will not sign up for coverage in the individual markets, and 3 million will lose employer-based insurance. In Florida, the Center for American Progress (CAP) estimates that by 2025, 873,000 people will lose health care coverage across the board.
More Expensive Marketplace Plans: Without a mandate to purchase insurance, some people will only purchase coverage when they deem that it is necessary (what economists call “adverse selection”) and the CBO estimates that this behavior will cause individual marketplace premiums to rise about ten percent. For example, according to the Center for American Progress, an unsubsidized family of four in Florida with middle-aged parents and children under 14 will see their marketplace premiums increase by $1860 in 2019.
Finally, the CBO has estimated that bipartisan Alexander-Murray legislation will not reduce the magnitude of the consequences described above.
By Matt Childers
By Miriam Harmatz
Op-Ed published in the Miami Herald
The incoming Congress plans to repeal the Affordable Care Act (ACA) while delaying replacement (think of making a U-turn into oncoming traffic). The nonpartisan Urban Institute found that 2.2 million Floridians, including thousands of children, would lose coverage under the anticipated repeal.
More than 50 years ago, I developed an autoimmune disease. One of my earliest childhood memories is of sitting in the hospital admission office with my mother and being told how much the charge was per day. I felt a total body panic because the bill for one day was more than my family spent on almost anything. When my mother reached over to comfort me, she used a word I’d never heard: “Don’t worry, we have insurance.”
There is no dispute that the ACA needs fixing. But with all of its problems, millions of Americans have gained affordable coverage, and our country is now close to universal coverage for children. Repealing the ACA without a viable and simultaneous replacement would be devastating. In Miami-Dade County, more than 350,000 residents are at risk of losing coverage. And not only will these people lose their insurance, Florida will lose more than $8 billion a year, including over $6 billion annually in the federal subsidies that made insurance affordable for low- and middle-income Floridians. For local healthcare providers, this translates into a loss of about $1 billion a year in federal dollars — and that does not begin to include the ripple effect of those dollars in the economy.
The reported plan is to fast track repeal of the ACA’s funding-related provisions through the “filibuster proof” budget reconciliation process. The replacement plan, which would be subject to filibuster and thus require 60 votes, would be delayed. Two of the key anticipated provisions include eliminating the federal subsidies (tax credits and cost-sharing reductions) that make insurance affordable for low- and moderate-income consumers and the mandate to have insurance.
Healthcare economists predict that eliminating federal subsidies and the insurance mandate, while maintaining the insurance regulations that ban lifetime and annual caps and preexisting-condition exclusions (which are politically popular and not subject to budget reconciliation) will destabilize the insurance market. This would occur even if the subsidies continue until 2019. Insurance only works if most people, including those who are young and healthy, are covered. Insurers need to pool risk between healthy enrollees (who cost little or nothing) and those who are sick (who cost a lot). Under the anticipated repeal, healthy consumers will leave the market, the sick will stay and the insurance markets likely will unravel.
In 1974, I wrote my college thesis on why national health insurance legislation failed to pass the 93rd Congress. The common wisdom was that our country was moving incrementally toward universal coverage. Thus, having passed Medicaid and Medicare in 1965, a national health insurance bill could be expected to pass by the end of the 1970s.
Instead, the healthcare debate grew incomprehensibly contentious. The ACA, which actually is the most conservative approach to healthcare coverage possible, finally passed in 2010 at tremendous political cost. And now, the hard-fought progress toward ensuring access to healthcare for all Americans, including those with preexisting conditions like mine, is very much at risk. Repealing the ACA could happen as early as January; but replacing it could take another 50 years.
My family was spared financial ruin because we were lucky enough to have insurance. This should not be a matter of luck. Anyone who has ever been in a hospital, or had surgery, or needed ongoing treatment with an expensive drug, or cared about someone who has been sick or injured should tell Congress ASAP: “No repeal without a simultaneous replacement."
The Florida Health Justice Project, a new nonprofit advocacy organization, seeks to improve access to affordable healthcare for Floridians, with a focus on vulnerable low-income populations.
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