Study Shows that Millions of People are Most Likely to Lose Health Insurance if ACA Subsidies are Eliminated
According to a new study conducted by the RAND Corporation, eliminating subsidies would cause 11 million Americans to lose their health insurance. People who only acquire low and moderate income that were purchased from the government-run health insurance marketplaces are the ones who are greatly affected. This would sharply boost costs for consumers and are more likely to withdraw their insurances aside from paying more.
If the government were to remove the subsidies offered to individuals by the Affordable Care Act, researchers found that there would be a 43 percent increase in premium costs in the individual marketplaces and will also cause health insurance enrollment to drop by 68 percent.
This research suggests that an ACA-compliant market that did not provide tax credits to low-income people would consist of a relatively small number of high-risk individuals, which would drive prices higher and prevent the majority of potential enrollees from purchasing affordable coverage.
The tax subsidies have been challenged in court on the grounds that the wording of the law allows such aid only to those people who buy policies through state-run marketplaces or those marketplaces which are only operated by the federal government. This issue is now being considered by several federal courts across the nation.
The authors of this research used an updated version of the RAND COMPARE micro simulation model, which predicts the effects of health policy changes at state and national levels, to predict the effects of eliminating subsidies and other potential changes would have on premium health coverages and enrollment in the individual health insurance market in the year 2015 as well as the in the next years.
The analysis then found out that ending the mandate requiring individuals to have health coverage would cause enrollment in the individual market to fall by more than 20 percent, with 8.2 million Americans becoming uninsured. Although the increase in the cost of premiums would only rise to 7 percent, the sharp decline in enrollment suggests the mandate is important to achieving the Affordable Care Act’s goal of a near-universal medical coverage, according to RAND researchers.