| NEW YORK, March 7
NEW YORK, March 7 The House Republican health
insurance plan suggests health insurance after Obamacare will be
less affordable, investors, insurers and industry sources said
on Tuesday, raising questions about future enrollment and
insurance company participation.
The draft legislation, released on Monday night, rolls back
some of the key tenets of former President Barack Obama's
signature healthcare law, known as Obamacare, including the
individual mandate and the expansion of Medicaid. In addition to
eliminating the requirement that most Americans obtain medical
insurance, it creates a system of new tax credits to coax people
to purchase private insurance on the open market.
The bill has the support of President Donald Trump, who has
vowed to repeal and replace the 2010 law. But some Republican
lawmakers whose support is needed for the final legislation -
and Democrats - said they wanted details on how it would affect
Under the draft legislation, Obamacare’s income-based and
location-based tax credits are replaced by credits with fixed
amounts up to a maximum income level.
Because the bill has just been proposed and aims mostly to
repeal the existing law rather than introduce new policies, it
is unclear exactly how future changes could make the plan
affordable and draw insurers into the market.
But some initial reaction, particularly from hospitals, was
critical. The American Hospital Association said in a letter to
Congress that it could not support the draft legislation in its
The BlueCross BlueShield Association, which represents BCBS
insurers across the country that cover the vast majority of the
about 10 million people enrolled in 2017 Obamacare plans, said
the insurers were glad to see the extension of many Obamacare
aspects into 2019. But it emphasized the need for the
replacement to be affordable.
"It is important that the tax credit for 2020 creates a
marketplace that enables people to get the coverage they need at
a price they can afford," BCBSA Senior Vice President Alissa Fox
said in statement.
The Association for Community Affiliated Plans, which
represents health plans serving Medicaid for the poor and other
public health programs, said it was concerned the structure
would raise costs for people currently in the marketplace.
Because insurance costs, healthcare costs and incomes vary
so dramatically around the country, the new tax credit would
affect some people more than others.
"I think there's a reasonable concern that people in
high-cost states who are lower income will have a hard time
finding affordable care," said Paul Howard, director of health
policy at the conservative Manhattan Institute.
But the draft legislation also sets up a $100 billion fund
over 10 years that states could use to structure subsidies for
their members and offset some of that, he noted. Insurers have
also asked to be able to offer plans with fewer benefits that
could be sold at lower prices, Howard said.
Since the draft removes the mandate requiring people to have
insurance, the impact on enrollment from that measure is not
Standard & Poor's estimated that the draft plan would reduce
individual enrollment, now at around 10 million, by 2 to 4
Steve Brozak, managing partner at WBB Securities, said he
believed that under the Republican package, "people will be
He also said that, as it is currently designed, insurers
will have difficulty attracting people who do not have an
immediate need for healthcare, like younger, healthy people who
are less expensive to insure.
Still, Brozak expects that this draft is only a first step
and likely to change. It is expected to be voted on this month
in the House before moving to the U.S. Senate.
The draft plan, along with Republicans' proposed
restructuring of the Medicaid program for the poor and the loud
opposition from some Republican lawmakers, created uncertainty
that drove down shares of hospitals and insurers.
Republicans will need the buy-in from BlueCross BlueShield
insurers like Anthem Inc, particularly after UnitedHealth Group
Inc, Aetna Inc and Humana Inc exited
most of the states where they sold individual insurance plans
Shares of hospital operators sold off, with Community
Health Systems down more than 8 percent and Tenet
Healthcare off 7 percent.
Reaction in health insurer stocks was more subdued. Molina
Healthcare fell 1.3 percent and Cigna dropped 1
percent, while Humana gained more than 2 percent and
Anthem was little changed.
The American Hospital Association and the American Medical
Association, which represents doctors, declined to comment on
the draft legislation.
(Reporting by Michael Erman, Lewis Krauskopf, Caroline Humer,
Rodrigo Campos and Charles Mikolajczak in New York; Editing by