US Senate Republicans’ proposal to reduce access to health care in order to pay for additional tax cuts for the wealthy, large corporations, and foreign investors would drive up the cost of health insurance in Maine significantly, and cause 50,000 fewer Mainers to have health insurance in 2027, according to a MECEP analysis. This is because the GOP tax plan now includes a provision to eliminate the Affordable Care Act’s (ACA) “individual mandate” – the requirement that every American who can afford it have health insurance, or pay a penalty relative to their income level. This mandate is vital to protecting the health and stability of private insurance markets and reducing health care costs for everyone.
The nonpartisan Congressional Budget Office (CBO) recently estimated that repealing the individual mandate would increase insurance premiums in the individual market by 10 percent, and cause 13 million fewer Americans to have health insurance. Repealing the mandate would save the federal government more than $300 billion over ten years, in large part because fewer people would utilize the ACA’s premium tax credits, according to CBO. Senate Republicans propose to use these savings on tax cuts skewed toward corporations, the wealthiest Americans, and foreign investors.
The CBO estimates that the coverage losses will overwhelming be concentrated among people who would otherwise get coverage through the federal marketplace (Healthcare.gov), but would also include some people who would get coverage through their employer or Medicaid.
Applying the CBO’s methodology to Maine, MECEP finds that 15,000 fewer Mainers would have health insurance next year. This number would rise to almost 50,000 by 2027. This would cause the share of nonelderly Mainers without health insurance to soar from 6.8 percent to 11.8 percent. The coverage losses would be concentrated among middle income Mainers who qualify for minimal or no federal insurance subsidies, and who would thus be least able to afford the increase in premiums caused by the repeal of the individual mandate.
The CBO also estimates that the repeal of the individual mandate would drive up the cost of health insurance by an additional 10 percent annually. These increases would come on top of those caused by the recent decision by President Trump to end cost sharing reduction payments for the lowest income Mainers and other administrative actions that have discouraged enrollment. These premium increases would hit older Mainers and for those living in rural areas (where the cost of insurance is already the highest) the hardest. For example, the estimated increase in insurance costs for a 40-year-old in Kennebec County would be $665/year in 2018 and $1,005/year by 2027. For a 60-year-old in Washington County the impact would be particularly severe, $2,062/year in 2018 and a wallet-busting $3,118/year by 2027.
Source: MECEP analysis of CBO estimates; premium data for 2018 from Healthcare.gov. Projections use a medical inflation rate of 4.7 percent, per Centers for Medicare and Medicaid Services
This latest proposal from US Senate Republicans is simply another attempt to pass legislation which failed several times this summer, namely to reduce health care access for Americans for the sake of passing tax cuts on to the wealthiest 1 percent. When Mainers voted last week to expand Medicaid they spoke unequivocally for increasing access to affordable health care. Maine’s federal delegation should honor the spirit of this vote, and ensure Mainers do not have to forfeit their health insurance in order to give more tax breaks to the wealthy.