Insurance coverage needs to be defined in ACA replacement
Congressional Budget Office says comprehensive major medical coverage at a minimum, covers high-cost medical events.
Should legislators repeal and replace Obamacare with a plan to give consumers tax credits to purchase health insurance, they must consider how ending the Affordable Care Act also ends the current mandate for insurers to offer consumers defined, comprehensive medical coverage, according to a Dec. 20 blog by the Congressional Budget Office.
The Congressional Budget Office and the Joint Committee on Taxation would not count people who had limited health benefits as having coverage, the blog post said.
Under the ACA, consumers use tax-based subsidies to purchase private insurance in the marketplace. Policymakers under the administration of an incoming President Donald Trump have expressed interest in replacing that model with refundable tax credits, the CBO blog said.
Such proposals would also eliminate or reduce the extent of current federal laws regulating the individual market that give protections for coverage of catastrophic and high-cost events, according to the CBO.
"CBO and the staff of the Joint Committee on Taxation anticipate that insurers would respond to such legislation by offering new types of insurance products in the nongroup market, which are likely to differ from existing products in their depth and extent of health insurance benefits," the blog states. "If there were no clear definition of what type of insurance product people could use their tax credit to purchase, some of those insurance products would probably not provide enough financial protection against high medical costs to meet the broad definition of coverage that CBO and JCT have typically used in the past--that is, a comprehensive major medical policy that, at a minimum, covers high-cost medical events and various services, including those provided by physicians and hospitals."
[Also: Republican ACA repeal plans jeopardize crucial funding for coverage]
In developing such proposals, policymakers need to define what type of insurance products qualify for tax credits and what role states would have in making that determination, the CBO said.
Until the ACA in 2014, states defined the depth and extent of coverage in the individual market.
Without a clear definition of what type of insurance product people could use their tax credit to purchase, everyone who received the tax credit would have access to some limited set of healthcare services, but not everyone would have insurance coverage that offered financial protection against a high-cost or catastrophic medical event, the blog said.
Still unknown is how many people would obtain any type of insurance policy using the tax credit, and how many would obtain an insurance policy that meets the broad definition of coverage, said the blog by Susan Yeh Beyer and Jared Lane Maeda, analysts in CBO's Health, Retirement, and Long-Term Analysis Division, with guidance from Jessica Banthin, a deputy assistant director in that division.
Twitter: @SusanJMorse
