WASHINGTON — After the House Ways and Means Committee voted this week to give insurers a $400 million tax break in the GOP’s Affordable Care Act repeal legislation, at least one industry executive was not impressed.
“I would gladly trade that tax break for a fair bill that provided insurance for everyone,” said Dr. Mario Molina, CEO of Molina Healthcare, which covers nearly 5 million people through its marketplace, Medicare and Medicaid health plans.
“This is a bad bill,” Molina said.
In Washington on Thursday for a conference on the troubled individual insurance market, Molina had some harsh criticism for the GOP legislation, dubbed “The American Health Care Act.”
He said the bill doesn’t provide enough support for low-income people to afford individual coverage and it would destabilize the individual marketplace by scrapping the ACA’s individual mandate. That, he said, would lead to premium hikes and fewer people with coverage.
“Millions of people are going to lose their health insurance coverage over the next few years as a result of this bill,” Molina said in an interview with McClatchy. “And that’s the story they’re not telling people.
“So, yes it’s true tomorrow you’re not going to lose your coverage. But wait a year. Wait five years,” he said. “We don’t believe that these tax credits are going to be sufficient so that low-income people will be able to afford to purchase health insurance.”
For example, Molina said, imagine the price hikes an average plan member in California might face under the GOP proposal:
Under the Affordable Care Act, the tax credits are based on income and the cost of coverage, but generally, the lower one’s income, the larger tax credit they receive to help pay for marketplace coverage.
Under the GOP plan, marketplace enrollees receive tax credit based more on age.
The leaner tax credits and the repeal of the ACA’s individual mandate means that lower-income people who need more assistance to purchase coverage, will simply do without insurance since the ACA would no longer require them to have coverage.
And that, Molina said, is a problem.
“Insurers will raise their prices because they’re going to be worried that people will only sign up when they need insurance,” Molina said.
Molina’s concerns reflect those of many in the health insurance industry.
The industry trade group, America’s Health Insurance Plans, this week told House Republican leaders in a letter that it fears the GOP’s new funding plan for Medicaid “could result in unnecessary disruptions in the coverage and care beneficiaries depend on.”
