Health and Science

GOP tax bill would spike Obamacare premiums nearly $2,000 for families, trigger Medicare cuts

Key Points
  • A Senate Republican bill would increase Obamacare premiums for unsubsidized families by an average of almost $2,000 in 2019.
  • The bill also is estimated to lead to 13 million more people becoming uninsured.
  • And the bill would trigger automatic spending cuts to Medicare, starting with $25 billion in 2018.
(L to R) Sen. Mike Enzi (R-WY), Senate Finance Committee chairman Sen. Orrin Hatch (R-UT), Senate Majority Leader Mitch McConnell (R-KY) and Rep. Mike Bishop (R-MI) look on during a press event to discuss the GOP plans for tax reform, September 27, 2017 in Washington, DC.
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Senate Republicans' proposed tax reform bill would increase Obamacare prices by an average of almost $2,000 per family in 2019, according to an analysis released Thursday.

And the tax bill would lead to 1.8 million more people lacking health insurance in California than currently, another 1 million people becoming uninsured in Texas, and more than 800,000 newly uninsured in New York and Florida each, the report said.

Cumulatively, 13 million more people nationally would become uninsured.

The analysis by the left-leaning Center for American Progress also highlighted that the federal Medicare program could be subject to annual funding cuts that would start with $25 billion next year if the Senate tax bill becomes law. The cuts would result from automatic spending reductions triggered by the bill.

"The majority's plan is clear: take away your health care to pay for their tax cuts," said Sam Berger, senior policy adviser at CAP.

The analysis was released two days after Senate GOP leaders added repeal of Obamacare's individual mandate to the their tax bill.

That mandate requires most Americans to have some form of health coverage or pay a tax fine.

Senate Republicans want to repeal the mandate as part of the bill because doing so would save almost $340 billion in federal spending over the next decade — savings which in turn would be used to increase tax cuts to corporations and individuals.

Those savings would come from repeal of the mandate leading to what the Congressional Budget Office has estimated would be 5 million fewer people enrolled in Obamacare individual health plans, and 5 million fewer enrolled in Medicaid, the government-run program for the poor. Another 3 million people who now get coverage through a job are expected to become uninsured as well.

Senate Finance Committee to include repeal of individual mandate in tax bill
Senate Finance Committee to include repeal of individual mandate in tax bill

Because federal funds subsidize people both in Obamacare plans and Medicaid, lower enrollment in both programs would lead to less federal spending.

CBO also estimates that premium prices for Obamacare plans would be 10 percent higher nationally as a result of the repeal of the mandate because insurers would have fewer healthier customers in their risk pools.

CAP's report used CBO's estimates to project what the premium price hike effect would be in each state, and how many more people in a given state would become uninsured if the mandate is repealed. CAP also estimated how much Medicare funding each state would lose under the bill.

The average premium increase for a middle-class family of four that earns above $98,400 in the lower 48 states would be $1,990 in 2019, according to CAP. Such a family earns too much to qualify for federal subsidies that reduce Obamacare premiums, and thus would bear the full effect of the price hikes.

But such a non-subsidized family in Wyoming would be looking at premiums that would be $3,460 higher in 2019, CAP said.

In Alaska, the premiums would go up by $2,930, and in Alabama, they would go up by $2,230, the analysis found.

A total of 35 states would see the number of uninsured residents increase by at least 100,000 people.

And more than half of the of states also would experience more than $300 million cuts to Medicare benefits in 2018, according to CAP.

"The Senate bill is looking more and more like a vehicle for rolling back health programs," said Emily Gee, a health economist at CAP.