(Recasts first paragraph; Adds title of 'Obamacare' act,
paragraph 3; editing)
By Michael Erman and Caroline Humer
NEW YORK, March 7 The House Republican health
insurance plan suggests coverage after Obamacare will be less
affordable, insurers and industry experts said on Tuesday,
raising questions about whether Americans will enroll and
insurance companies will enter the market.
The draft legislation rolls back some key tenets of former
President Barack Obama's signature healthcare law, eliminating
the requirement that most Americans obtain medical insurance and
creating a system of new tax credits to coax them to purchase
private insurance on the open market. It would also curtail the
expansion of Medicaid, the provider of government-run health
insurance for the poor.
The bill has the support of President Donald Trump, who has
vowed to repeal and replace The Affordable Care Act, signed into
law by President Obama in 2010. But some Republican lawmakers
whose support is needed for the final legislation - and
Democrats - said they wanted details on how it would affect U.S.
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 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
insurers were glad to see the extension of many Obamacare
aspects into 2019. But it emphasized the need for affordability.
"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
help 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, 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
clear. But Standard & Poor's estimated that the draft plan would
reduce individual enrollment, now at around 10 million, by 2 to
4 million people.
Steve Brozak, managing partner at WBB Securities, said he
believed that under the Republican package, "people will be
He also said that with the current design, 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 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.
Support for government-run health insurance has risen over
the past five years, according to the Reuters/Ipsos national
Between February and March, 47 percent of Americans said the
government should have at least a “major role” in providing
health insurance. That was up from 39 percent who answered the
same way when the poll first asked the question in January 2012.
The Reuters/Ipsos poll is conducted online in English in all
50 states. The latest poll ran from Feb. 25 to March 6 and
included responses from more than 2,700 American adults. It has
a credibility interval, a measure of accuracy, of 2 percentage
(Reporting by Michael Erman, Lewis Krauskopf, Caroline Humer,
Rodrigo Campos and Charles Mikolajczak in New York; Editing by