New analysis by MECEP shows that the Washington Republicans’ plan to replace the Affordable Care Act will hit Mainers especially hard, due to the restructuring of federal subsidies for health insurance purchased through the individual market. The House GOP plan, officially known as the “American Health Care Act” (AHCA), was unveiled Monday. Among a number of provisions, it seeks to shift federal subsidies for health insurance from being based on income, to being based on age. They would be worth significantly less to most Americans. Additionally, the new tax credits would also be applied uniformly across the country, taking no account of the higher cost of health care in states like Maine. That means that even older Mainers, who qualify for the maximum credit under the GOP plan, would face extraordinary increases in the monthly cost of health insurance.
The federal health insurance marketplace is currently used by some 85,000 Mainers, the vast majority of whom qualify for subsidies under the Affordable Care Act. Currently, subsidies are structured to cap monthly premiums at a percentage of household income, ranging from 2% for the lowest income families, to just under 10% for families up to 400% of the federal poverty level. The House GOP proposal offers a fixed subsidy per individual, based on age, ranging from $2,000 per person for the under-30s (including children) to $4,000 for the over-60s. The new subsidies would represent a loss for almost all Mainers who use the marketplace, but particularly for those in their 50s and 60s (who represent a third of the enrollees) and those living near poverty (half of enrollees earn less than 150% of the federal poverty level). Because health insurance is most expensive in Down East Maine and Aroostook County, Mainers in these areas would see the largest increase in cost.
Example: An older couple (in their early 60s) living in Washington County, at 150% of the poverty level ($24,360 a year)
|Sticker price of typical health insurance:||$2,220||$26,640|
|Current tax credits:||$2,122||$25,464|
|Current net premium:||$97||$1,164|
|Proposed tax credit:||$667||$8000|
|Proposed net premium||$1,553||$18,460|
In this example, the cost of health insurance has increased from 4% of household income to an unaffordable 77% of household income. Some Mainers – for example, a childless couple in their 40s, earning $48,000 – do better. Such a couple would see their monthly premium fall if they lived in York or Cumberland Counties, but increase in Aroostook, Hancock, and Washington Counties. But these are the exception, rather than the rule, among those currently using the health insurance marketplace. Mainers in this income bracket are more likely to already have health insurance offered through an employer, making them ineligible for either the current or proposed subsidies.
Given the exponential increase in the cost of insurance, the House GOP plan will put health care out of reach for tens of thousands of middle-aged and older Mainers living in the most rural parts of Maine. For many more, the increased cost of insurance will still make it an unaffordable proposition. These Mainers – the poorest and the oldest – are those most in need of affordable health care. The House GOP plan will only serve to trap these individuals in a world without health care and a series of chronic health conditions.
Explore a full analysis of the impact of the House GOP plan on the cost of health insurance in Maine in the infographic above.
Methodology: Health insurance premium data from US Department of Health and Human Services, Centers for Medicare and Medicaid Services for the 2017 enrollment period. The “typical” health insurance plan selected was the second-cheapest “silver” rated plan available in each county, usually either Anthem’s “Silver X HMO,” or Community Health Options’ “Community Value” plan. The second-cheapest silver-rated plan is used by the federal government to calculate the benefit cap for monthly premiums.