Under Senate Health Bill, A Rural Vs. Urban Divide Is Exacerbated
The prospects of the Senate's bill to repeal and replace the Affordable Care Act are a moving target.
Less than a day after Senate Majority Leader Mitch McConnell postponed a vote on the bill, the Washington Post is reporting that McConnell wants to send a revised version to the nonpartisan Congressional Budget Office by the end of this week.
The CBO's score of the Senate proposal — which the agency said would result in 22 million people losing health insurance over the next decade — pushed some more moderate Republican senators to oppose the bill.
In Kentucky, according to a new analysis of the Senate bill from the Kaiser Family Foundation, people buying health insurance on Healthcare.gov would pay as much as 50 percent more than they do now, averaged across all income levels and the commonwealth's 120 counties, under the Senate bill.
Kaiser's analysis is based on CBO scores for the Senate bill and one recently approved by the House that are similar in key areas.
Drilling down into the data reveals some clear losers under the proposal: older people and the lower and middle class living in rural areas.
Rural Areas Lose
Generally, people pay a higher price for insurance in a rural areas, because they're farther away from hospitals and health care providers. The Affordable Care Act, or ACA, takes that into consideration and gives those people higher subsidies to help pay for premiums.
But the Senate bill -- called the Better Care Reconciliation Act -- would be less generous, according to Kaiser Family Foundation researcher Cynthia Cox.
The bill's beneficiaries are largely people under 40 who live in more urban areas like Jefferson County. Here, a 40-year-old would pay about the same or a little less than he or she would pay under the ACA for a health insurance premium.
But that decrease in premium isn’t big – about $200 less per year. A 40-year-old making $30,000 a year living in Jefferson County would get an additional $230 to pay for coverage under the Senate plan, making silver and bronze plans more affordable.
But if the same 40-year-old were to move south to Green County, Kentucky, he or she would get $460 less in tax credits -- and pay more for the same silver and bronze plans.
“The lack of having it be geographically-related is really damning to rural people,” said Cara Stewart, a health law fellow at the Kentucky Equal Justice Center.
A spokeswoman for McConnell declined to comment for this story, saying it is "premature to analyze a Senate bill that is not yet complete."
The geographic challenge under the Senate bill applies to middle-income earners, too.
Under the ACA, people who make up to about $50,000 a year are eligible for financial help to buy insurance, according to Cox. But the Senate bill would place the income level bar for tax credit eligibility at $43,000 a year starting in 2020.
“People with incomes between $40,000 and $50,000 a year could see significant premium increases because they’d no longer be eligible for a tax credit,” Cox said.
Because of that change, a 60-year-old living in Lee County, Kentucky, earning $50,000 a year in 2020 would pay almost a quarter of his or her income for a basic bronze-level plan. If the ACA goes forward untouched, that same plan would only cost the person 6 percent of his or her income.
There are a few factors that will make it so much more expensive. One is that insurers will be able to charge a 60-year-old five times what a 21-year-old pays for the same health insurance. The ACA currently allows insurers to charge only three times as much. Their rationale is that older people are sick more often than the young, something the ACA accounts for in its regulatory framework.
But premiums are only part of the cost people would pay for health coverage in the individual market under the Senate proposal.
Different from the ACA, the Senate bill requires insurance companies to pay a little more than half the cost of medical bills, as opposed to the two-thirds required under current law. That will mean higher co-pays and deductibles for everyone, no matter where they live. That's according to Dustin Pugel, a research and policy associate with the Kentucky Center for Economic Policy.
“Even if some younger people's premiums go down a little bit, they’re going to end up with insurance that’s practically unusable, and they’ll have to decide if they want to pay those premiums for insurance they may never be able to use to begin with,” Pugel said.
Medicaid's Future Unclear
The Senate bill also gives a lot of authority to individual states.
States would have the option of making Medicaid recipients prove their eligibility every month, and could also make choices to switch health coverage back to the way it was pre-ACA. Insurance companies could bring back strict limits for the amount they’ll pay in a year and exclude coverage for cancer treatment.
As a result of all these changes, 7 million people nationwide would not be able to afford policies on Healthcare.gov and would go without by 2026, according to the CBO. This includes people across cities and rural areas.
The net effect would be more people losing their health insurance, of course. But the extent of that loss, and whether health insurance remains feasible to buy, would largely be up to the states.
“I can make some educated assumptions about what our General Assembly might do, but there are so many parts of this that give incredible discretion to the governor,” said Stewart of the Kentucky Equal Justice Center. “So I couldn’t even begin to do analysis without knowing what our state would do.”
Gov. Matt Bevin has said he supports the Senate bill because it gives states more control. Meanwhile, his proposed changes to the expanded Medicaid program here would have to be financed completely by the state if funding for the program is pulled, as proposed in both the House and Senate versions.