Yesterday, House Republicans finally released their long overdue proposal to replace the ACA. As per usual when any new policy initiative is released, key House Republicans began a strong press push attempting to demonstrate the strengths of the replacement bill. And it does have strengths. If you are young, healthy, or a well-compensated health care executive, the plan has a lot of strengths. But, if you are older, poorer, or have pre-existing conditions this plan has the potential to financially devastate you.
Jason Chaffetz went on CNN last night to talk up the plan. During the interview, he admonished Americans most likely to be impacted by the repeal of the ACA, ignorantly claiming those individuals needed to forgo purchasing a new iPhone to afford health insurance. Not only does this display a remarkable ignorance of the cost more vulnerable Americans must pay for healthcare (hint: it’s not anywhere near the $649 a new iPhone 7 costs), but it also demonstrates where House Republicans priorities lie – and it’s not with Americans who will be financially wrecked by the repeal of the ACA.
Let’s compare the two plans, using an average 40-year old, non-smoker living in Richmond, VA making $30,000 a year. Under the ACA, our 40-year old purchases a Silver plan using a current healthcare exchange. According to a recent Kaiser Permanente analysis, they are likely to pay $207 a month for healthcare, after the ACA tax credit, or $2,484 a year for health insurance. They forgo a new iPhone, but that still leaves them with a gap of $1,835 needed to pay for health insurance. Most Silver plans offered on current healthcare exchanges include a 70/30 split – 70% of healthcare costs are covered by insurance, and 30% are covered out of pocket by the patient. Our 40-year-old who has usually enjoyed good health is diagnosed with cancer. It takes a visit to their GP, which costs them $29, and two specialist visits, which costs them $112, to receive the diagnosis. Chemotherapy is the recommended course of action. One round of chemotherapy costs, on average, $7,000. After just one treatment, they’ll need to pay their 30% out of pocket, or $2,100, bringing their total out of pocket cost thus far to $4,725. They are prescribed Neulastia to help mitigate low white blood cell counts. One injection costs anywhere from $5000 – $7000 dollars. This qualifies as a specialty drug under the Silver plan, so our 40-year old will be responsible for paying for 31% of the cost. They’ll need to find $1,550 – $2,170 to pay for just the one injection. There is a cap on out-of-pocket expenses for lower income individuals on the Silver plan, typically around $6,100 per year. They’ve now hit their out-of-pocket cap with that one injection of Neulastia. So Chaffetz’s suggestion would mean our 40 year old needs to find $7,935 (cost of health insurance + out of pocket expense) after forgoing their new iPhone to pay for all their medical expenses this year.
Under the House Republicans plan, here’s how this scenario changes. Our 40 year old receives a $3,000 credit to purchase health insurance. They find a plan that would cost them about the same as the plan under the ACA, $2,500. But they had a lapse in coverage recently. Now that health insurance company can charge them a 30% surcharge on their premium, costing them $3,250 a year for coverage. Not only that but the cap on out of pocket expenses for lower income individuals is removed. Now the insurance company can continue to charge 30% of the cost of all healthcare expenses to our 40-year-old with no cap. Our 40-year-old’s oncologist prescribed 4 rounds of chemotherapy. At a cost of $7,000 for each round, now our 40-year old will have to pay $8,400. With each round of chemo, they require a Neulastia injection. For four injections of Neulastia, they’ll need to pay $6,200 – $8,680. The also meet with their oncologist once a month. At $112 per visit, our 40-year-old is paying $1,344. Under the House Republican plan, instead of paying $8,584 in health insurance costs and out of pocket expense, our 40-year-old would now be faced with a total cost of $14,850 – $17,330. They would have to pay, at minimum twice as much as they would under the ACA to receive life-saving treatment.
And it’s important to note that the above example does not account for a large number of potential doctor’s visits, treatments, and drugs that would be required for someone who received a cancer diagnosis – countless rounds of blood drawn, MRIs, anti-nausea drugs, etc.
The Republican plan is a boon to those who are fortunate enough to be young and healthy, or a well-compensated health insurance executive. But, it’s important to keep a few things in mind. Youth and good health are fleeting. Too many Americans find themselves financially ruined by one major health expense – a car accident, cancer, a major surgery, because their health insurance does not suffice.
For someone making $30,000 a year, having to pay $14,850 – $17,330 would be financially ruinous. It puts people in a horrible place of deciding whether to get treatment, or to pay rent. As the world’s superpower, it is appalling that we demand so many of our citizens’ be forced into terrible choices – to not receive life-saving treatment because you need to buy groceries, to declare bankruptcy because you can’t pay your medical bills – driven entirely by their inability to pay for shockingly high healthcare costs. We need to repair the ACA, to find innovative ways to bring down healthcare costs, while continuing to provide a safety net to the most vulnerable among us. Replacing the ACA does nothing for average Americans. But at least House Republicans will be able to sleep at night knowing that healthcare companies who pay their executives millions of dollars can now deduct the full salary rather than just $500,000.
Loudoun Young Democrats Communications Chair