New brief looks at how families across NC would be impacted by proposed changes
RALEIGH (March 2, 2017) — A recent policy brief and leaked legislative draft are finally shedding some light on the new proposals coming out of Washington for health care reform. New details reveal that the GOP proposal would radically redistribute resources away from low-income families and older adults towards the wealthy, according to a new brief from the NC Justice Center’s Health Advocacy Project.
“While opponents of the Affordable Care Act have criticized the law for premium prices and out-of-pocket costs that some enrollees have experienced, these latest proposals would result in low-income families, as well as those with pre-existing conditions, chronic health care needs, and other significant medical costs, largely finding health insurance both unaffordable and inaccessible,” said Brendan Riley, a HAP policy analyst and author of the report.
While the ACA provides financial assistance to lower premiums for people with low to moderate incomes, the latest GOP proposals would replace the ACA’s individualized premium tax credit with a fixed tax credit, dubbed the “Universal Health Care Tax Credit”—one that does not adjust according to income or costs of plans available but makes slight adjustments based on the age of enrollees. This flat tax credit would operate like a voucher, providing less value to those who need it most—North Carolinians with low incomes, older adults, and people with pre-existing conditions—while also redirecting federal dollars to high-income earners who need less help with health insurance expenses.
The brief looks at the similarities between both the proposed GOP “Universal Health Care Tax Credit” and the ACA’s premium tax credit, as well as how three different North Carolina families will face higher prices under the GOP plan. The GOP tax credit would also be an advanceable, refundable tax credit used toward reducing premiums of private plans, and would be available only to consumers who are not eligible for coverage through an employer or a public program. However, the credit would not require any income test for eligibility, nor is there any tax credit size adjustment for income or the size of a family. The GOP tax credit also fails to adjust for the costs of plans available to the consumer.
In one case, a married couple living in Gaston County earning $28,000 would go from paying $119 each month due to the ACA’s premium tax credit—which covers the difference between their monthly premiums—to $1,647 each month with the GOP tax credit. This would be the difference between paying 5.1 percent of their income toward benchmark premiums and 71.66 percent. A single mother of two in Orange County living at 129 percent of the federal poverty line would go from paying $43.98 in out-of-pocket premiums each month under the ACA to $259.61 under the GOP proposal.
“Overall, this federal policy shift would leave North Carolinians—more than one-third of whom live below 200 percent of the poverty level—less likely to afford health insurance and more likely to become uninsured,” Riley said. “It would also likely segregate consumers with pre-existing conditions into underfunded, inadequate high risk pools, severely limiting consumer access to affordable, quality health insurance coverage.”