Newsflash:
About The Letter Drop Team LA Medicaid Expansion Bobby Jindal’s Obamacare Replacement Could Kick Millions Off Their Insurance Plans
Wednesday, 02 April 2014 00:00

Bobby Jindal’s Obamacare Replacement Could Kick Millions Off Their Insurance Plans

Written by  Igor Volsky | ThinkProgress
Rate this item
(0 votes)

Louisiana Gov. Bobby Jindal (R) unveiled a new health care plan on Wednesday, promising to repeal the Affordable Care Act and offer real conservative alternatives to President Obama’s health care proposal. But the initiative, which borrows heavily from GOP plans introduced over the last 20 years, would cause millions of Americans to lose their existing health care plans, exposing Jindal to the very same criticism he has deployed against Obama.

“[H]undreds of thousands of Americans, maybe even over a million Americans learning they’re not going to be able to continue in their current insurance,” Jindal told Fox News in October of 2013. “I think you’re going to see more and more frustration build [around Obamacare], more and more Democrats and Republicans calling for delays, for repeals.”

But Jindal’s “Freedom and Empowerment Plan” could prove just as frustrating, leading millions of Americans to lose their existing coverage in at least two ways: 1) by repealing the Affordable Care Act, and 2) treating employer-sponsored coverage and nongroup insurance equally in the tax code. The first would dramatically upend the health care market and cause at least 10 million people — signed up for insurance through the new marketplaces, Medicaid expansion, and the remaining individual market — to lose insurance. The second would likely lead many businesses to stop offering coverage altogether.

Currently, the 149 million nonelderly people who obtain coverage through their jobs don’t pay taxes on their benefits. The tax subsidy, which has been around since WWII, increases employers’ offers of health insurance and encourages younger, healthier people to remain in employer-sponsored insurance. Though lawmakers have offered numerous proposals to move to a national market for nongroup insurance, any such policy would — by its very design — disrupt how millions of Americans are currently receiving their health care benefits.

Jindal takes this idea to an extreme. Not only would he kick people off their existing health care plans, but the plan could severely disadvantage lower-income Americans trying to buy coverage.

The “proposal” calls for eliminating the tax-exempt status of employer-sponsored plans — thus treating employer-sponsored benefits as taxable income — and replacing it with “a standard deduction for all forms of health insurance.”

“Over time, this policy might encourage more individuals to buy coverage independent of their employer plans,” the proposal concedes, before taking another swipe at the health care law. “Obamacare has completely disrupted the individual market, forcing many people who were satisfied with their coverage and the access they had to doctors and specialists being dumped into more costly and less comprehensive insurance simply because of Obamacare,” it says.

Estimates suggest that coverage loses under Jindal’s proposal would be far higher. Analysis conducted by the Center on Budget and Policy Priorities (CBPP) of a very similar proposal offered by the Republican Study Committee in 2013 found that replacing the tax exclusion with a deduction “would likely cause employer-based health coverage to seriously erode by encouraging employers to discontinue their coverage.” Though estimates remain scarce, Health Affairs concluded that Sen. John McCain’s (R-AZ) 2008 presidential campaign health care proposal — which would have similarly swapped the tax exclusion for a refundable tax credit — could have caused “twenty million Americans to lose such coverage.”

Sicker and lower-income people would be most disadvantaged by what Jindal is offering. With the Affordable Care Act’s insurance regulations fully repealed, individuals who lost their employer-sponsored insurance would turn to the individual market, where insurers would be able to cherry pick the healthiest enrollees or charge more for pre-existing conditions.

And though the proposal doesn’t specify the size of the proposed new deduction, the provision would primarily benefit people in higher tax brackets and be worth little (or nothing) to the vast majority of uninsured. Lower-income Americans would only see a modest benefit, while people who don’t owe taxes to begin with or have very low incomes will see almost no benefit at all. The vast majority of uninsured are in the 15 percent tax bracket or less and would reap few, if any, rewards from Jindal’s proposal.

The plan also cuts billions from Medicaid by block granting the program, allows insurers to circumvent state insurance regulations by allowing companies to sell plans nationwide and includes $100 billion over 10 years to encourage states to develop their own health care solutions (mostly by establishing or expanding high-risk insurance pools).

Link to original article from ThinkProgress

Read 1446 times

PDA In Your State

Sign the TPP Fast Track Petitions

MoveOn.org Petition - Congress Don't Renew Fast Track

Public Citizen Petition - Congress Must Reject Fast Track Authority

MoveOn.org Petition - Stop the Trans Pacific Partnership

CREDO Petition - Stop the Massive Corporate Power Grab

 

Rep. Alan Grayson on Why Letter Drops Are Important