WASHINGTON — Millions of people who get private health coverage through the Affordable Care Act would be at risk of losing it under the replacement legislation proposed by House Republicans, analysts said Tuesday, with Americans in their 50s and 60s especially likely to find coverage unaffordable.
Starting in 2020, the plan would do away with the current system of providing premium subsidies based on people’s income and the cost of insurance where they live. Instead, it would provide tax credits of $2,000 to $4,000 per year based on their age.
But the credits would not cover nearly as much of the cost of premiums as the current subsidies do, at least for the type of comprehensive coverage that the Affordable Care Act requires, analysts said. For many people, that could mean the difference between keeping coverage under the new system and having to give it up.
“The central issue is the tax credits are not going to be sufficient,” said Dr. J. Mario Molina, the chief executive of Molina Healthcare, an insurer that offers coverage through the Affordable Care Act marketplaces in California, Florida and several other states.
Martha Brawley of Monroe, N.C., said she voted for President Trump in the hope he could make insurance more affordable. But on Tuesday, Ms. Brawley, 55, was feeling increasingly nervous based on what she had heard about the new plan from television news reports. She pays about $260 per month for a Blue Cross plan and receives a subsidy of $724 per month to cover the rest of her premium. Under the House plan, she would receive $3,500 a year in tax credits — $5,188 less than she gets under the Affordable Care Act.
“I’m scared, I’ll tell you that right now, to think about not having insurance at my age,” said Ms. Brawley, who underwent a liver biopsy on Monday after her doctor found that she has an autoimmune liver disease. “If I didn’t have insurance, these doctors wouldn’t see me.”
The Congressional Budget Office has yet to release its official estimates of how many people would lose coverage under the proposal, but a report from Standard & Poor’s estimated that two million to four million people would drop out of the individual insurance market, largely because people in their 50s and early 60s — those too young to qualify for Medicare — would face higher costs. Other analysts, including those at the left-leaning Brookings Institution, have estimated larger coverage losses.
While the tax credits in the Republican proposal are the most generous for older people — $4,000 for a 60-year-old compared with $2,000 for a 25-year-old — they end up covering less of an older person’s costs. As soon as next year, the Republican plan would allow insurers to begin charging older individuals much more than younger individuals. Insurers are prohibited today from charging the older person more than three times as much as the youngest, but the Republican plan would allow them to charge five times as much. A 64-year-old could see annual premiums increase by almost 30 percent to $13,100 on average, according to the S.&P. analysis.
For people like Alan Lipsky, a self-employed consultant in Arden, N.C., the Republican plan could have a huge financial impact. Mr. Lipsky, who is 60 and whose wife is in her 50s, receives a tax credit of $2,097 a month for his family of four and pays $66 a month out of his own pocket. His family’s total annual tax credit of $25,164 would be reduced to $11,500 under the new plan, covering less than half of the total cost of his current coverage.
“I don’t think the Affordable Care Act is perfect,” said Mr. Lipsky, whose family deductible is $12,000 per year, “but at least for people like me it gives a baseline, and I’m worried I won’t have that baseline anymore. What they’re talking about is unaffordable for me.”
Not everyone would lose out. Some younger adults would probably benefit the most from age-based tax credits and proposed changes that would allow insurers to offer them less expensive policies, such as those with less generous coverage.
Joshua Yospyn, 40, a freelance photographer in Washington, earns slightly too much to receive a tax credit under the Affordable Care Act and pays about $374 a month for his BlueChoice H.M.O. plan. The Republican proposal would provide him with an age-based tax credit of $3,000 a year, which would cut his current premium costs by two-thirds, to $1,488 from $4,488.
Mr. Yospyn said he would love cheaper premiums but did not want to give up comprehensive coverage, his low deductible of $500 a year or the doctors he now sees. A physical this month, his first in several years, revealed that his cholesterol had risen sharply, leaving him “freaked out,” he said.
“I just want protection across the board,” he said, referring to the kind of policy he preferred. “It’s what I’m used to.”
Other people likely to be hurt under the new plan are those in areas where the cost of coverage is high. Subsidies are now pegged to the cost of a plan within a specific market, but the tax credits in the Republican plan are the same whether you live in Alaska or Minnesota. Coverage tends to be most expensive in parts of the country where there are few hospitals or few insurers. “When it comes to health insurance, high-cost areas tend to be rural areas,” said Cynthia Cox, a researcher at the Kaiser Family Foundation, which recently did an analysis of how the tax credits compared with the subsidies now available.
The proposal would also eliminate another important element of the subsidies, the financial assistance available for low-income people with their out-of-pocket costs, such as deductibles and co-payments. While many of the plans now sold through the Affordable Care Act marketplaces have large deductibles, the cost-sharing reductions available protect lower-income people from medical bills that could otherwise run into the thousands of dollars. Analysts say the lack of out-of-pocket assistance is likely to make any plan much less attractive to low-income people.
Legislation could also fundamentally weaken the insurance market by doing away with the so-called individual mandate, which requires people to have coverage or pay a tax penalty. While it would be replaced by a 30 percent surcharge when someone buys a policy after dropping coverage, the surcharge could be weaker than the current mandate, and younger people might continue to gamble on not having coverage until they get sick.
The result, said Donald H. Taylor Jr., a health policy professor at Duke University, is that people who buy coverage are sicker, causing the cost of premiums to soar. “This looks like to me adverse selection on steroids,” he said. “I don’t see how it doesn’t crater the individual market.”
Dr. Molina, the Molina Healthcare chief executive, said insurers are likely to increase their premiums significantly because they will worry about enrolling more high-cost patients as healthier people opt to go without coverage.
“Insurance companies are going to jack up the rates,” predicted Dr. Molina, who said premiums might increase even more than they did last year when some companies raised the rates by 25 percent or more.
Ms. Brawley in Monroe, N.C., said she and her husband could barely afford their current premiums, and her deductible of $3,500 a year is far too high. Still, she added, “it’s better than owing $20,000 or $30,000.”
“This is my second year with the Obama insurance,” she continued, “but before then, I didn’t have any and didn’t go to the doctor.”
She and her husband voted for Mr. Trump — the first time she had voted in her life — she said, because “I thought he would make it better.”