House Republicans, who revealed their plans to replace Obamacare on March 6, are in favor of a system of tax credits that would encourage people to buy insurance on the open market.

Credit: Republican Party

The 2016 presidential election has changed lives across the nation — and with new legislation that could replace the Affordable Care Act, it could even affect Penn students' medical care.

House Republicans, who revealed their plans to replace Obamacare on March 6, are in favor of a system of tax credits that would encourage people to buy insurance on the open market. The bill would also roll back Medicaid, which has provided health care coverage to more than 10 million low-income Americans. Although the legislation has not yet passed, it would have significant effects on many Americans.

“I think that as we evaluate the current GOP plan, it’s important to keep in mind that nothing is certain yet,” Executive Director of Student Health Service Giang Nguyen said. “There’s still a lot of detail within the bill that a number of Republican voices have concerns about. I don’t know what the ultimate shape of this will be.”

The proposals in the GOP Health Care Plan is significantly different from Obamacare — but what would this mean both nationally and for Penn students? The Daily Pennsylvanian broke it down.

Who does it hurt and who does it help?

“[The bill] benefits young, healthy moderate-income individuals,” said Daniel Polksy, the executive director of the Leonard Davis Institute of Health Economics, an interdisciplinary venture at Penn that studies the national health system. “What this bill would do is make it much more difficult for people who already have difficulty getting insurance.”

Nguyen said a number of Penn students have taken advantage of the expansion of Medicaid. If this coverage was reduced, they would be at risk to lose their health insurance.

But Wharton Health Care Management Department Chair Scott Harrington pointed out the positive benefits for many college students.

“Generally people who graduate from college make enough money that they would have very limited support, if any, from the Affordable Care Act," he said. "In fact, those who do have relatively low incomes will most likely get more from the Republican proposal in terms of tax credits than they would with premium subsidies under the Affordable Care Act.”

This tax cut comes with a tradeoff, as another Health Care Management professor Mark Pauly, said. 

“For the average American who will not be taking one of the Obamacare plans, as a taxpayer they’ll have lower taxes but they may be, and I hope they will be, more concerned about the larger number of uninsured people,” Pauly said.

A recent Congressional Budget Office report estimates that under the GOP plan, 24 million people would be at risk for losing health insurance by 2026.

“Financing of care for low- to middle-income people is due to be fairly drastically reduced,” Pauly said, “especially if they’re older.”

What does this mean for Penn students after graduation?

The effect of the bill will not be immediately apparent for many students after graduation, but they will likely see a greater benefit from the AHCA. 

“Current Penn students — almost all of them — are going to make enough money when they get out of school so that they won’t be eligible for Medicaid,” Harrington said. “Almost all Penn students will end up getting their coverage through work.”

Will Penn's university-sponsored health care plan change?

“Most of the health care benefits that our students have, if they are on the Penn Student Insurance Plan, should be about the same because we, as the purchasers of that plan, have a lot of control,” Nguyen said. “We decide we’re going to cover a certain benefit.”

Penn currently offers the Penn Student Insurance Plan through Aetna, Inc. The only way Penn would not be able to cover a condition was if a new piece of legislation specifically said it could not be covered.

“I don’t think it would ever get to the point where insurance plans cannot cover something,” Nguyen said.

He noted that Obamacare created requirements that certain preventative care like vaccines be covered in all plans. Under the GOP plan, those requirements may not be included.

"You can’t count on [coverage of certain areas] being automatic — you have to look and choose your insurance plan," Nguyen said.  

If changes to policy were enacted, he encouraged people to make sure that their plan offered the benefits they needed and didn't "change in a way they're not aware of," he said. 

Can students remain on their parents' plan?

One of the expansions that the ACA introduced was the ability for young adults to stay on their parents’ plan until the age of 26. Pauly anticipates this provision, which was included in the House Republicans' initial draft of the AHCA, will survive the bill's legislative battle.

"It’s just not worth the backlash of taking young people off their parents’ plans," he said. 

A potential repeal of that particular item in the bill would subject the bill to a possible filibuster in the Senate. As of now, House Republicans have aimed to avoid that confrontation, which would require 60 senators to block, by treating the AHCA as a "budget" bill. This means it can pass the Senate through "budget reconciliation," a process which is not subject to a filibuster.

How will the bill affect coverage for mental health care?

On this issue, Molly Candon, an LDI postdoctoral fellow was blunt: the bill is “worse, unequivocally.”

“Unfortunately, and unsurprisingly, I think mental health care gets the raw end of the deal,” she said. “Because Medicaid provides the bulk of services to individuals with mental health care, it’s potentially devastating.”

Penn Benjamins counselor andCollege freshman and Camila Johanek said she was frustrated to see the lack of emphasis on mental health in the proposal.

“Without getting the proper treatment, these people are really vulnerable,” Johanek said. “The fact that they’re even considering [cutting mental health coverage] is kind of disgusting.”

Candon concurred, adding that “until we reassess our values, I think mental health care is going to continue to take a back seat.”

How about the effect on reproductive health care and abortion?

The AHCA does not directly address reproductive care, so it is not clear how it will affect birth control and other related issues, Harrington said.

What qualifies as “minimal essential benefits,” which included things like birth control under the ACA, could change on a state-by-state basis.

The GOP bill would also cut back on federal funding that can be used at Planned Parenthood clinics, meaning that Medicaid recipients would not be able to use the clinics as a provider.

“The ACA required all insurers to cover reproductive services and other kinds of preventative care,” Pauly said. “[Any future GOP plan] certainly won’t cover abortions.”

Will entrepreneurs be affected?

Entrepreneurs are a unique case in the health insurance sector, since they typically don't get health insurance through an employer. These individuals are part of the non-group insurance market, which would be restructured in this GOP bill.

“The new law would give [someone who's very young] tax credits to buy insurance in this non-group market,” Polksy said. “Young healthy individuals would typically fare better under this law than the Affordable Care Act, and as long as they’re not very low income, they will get a credit.” 

However, he said entrepreneurs might encounter difficulty in places where insurance is more expensive. Unlike with Obamacare, where tax-credits were granted to individuals based on income and local cost of insurance, the GOP health insurance plan only proposes tax-credits based on age. 

What about in Pennsylvania as a whole?

While Obamacare granted Medicaid subsidies to states based on the cost of health care in each state, the GOP plan distributes funding based on a flat rate. It is up to the state to reorganize Medicaid to adapt to the reduced funding. 

“We don’t know how one state will be affected,” Polksy said. However, he predicted that “Pennsylvania, especially this part of Pennsylvania, has more expensive health care, so that change in the subsidy structure will have a more negative impact in Pennsylvania than in other states.”

Overall, what is the experts' assessment?

Health Care Management professor Mark Pauly: "My personal view is they left out the good improvements in Obamacare that Republicans had been talking about for seven years and put in all the undesirable things, so I was disappointed."

Health Care Management chair Scott Harrington: "It's hard to view it as a negative. It could end up being a positive."

Executive Director of Student Health Service Giang Nguyen: “The major issues to keep an eye on are the expanded access for contraceptive care, the access to preventive services without cost-sharing and Medicaid, as they are the biggest issues that will affect Penn students as well as most Americans." 

Executive Director of the Leonard Davis Institute of Health Economics Daniel Polksy: “I’m not in support of the new plan — I think it’s a step backwards. There’s a prediction that this new plan would cause 24 million people to lose health insurance and I think that is putting our country in the wrong direction.”

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