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Paul Ryan Explains Why 22 Million Will Be Uninsured, and He’s Got a Point

WASHINGTON — Speaker Paul Ryan on Tuesday defended the Republican health care plan that would mean over 22 million more people would be uninsured, arguing the uninsured would only be exercising their new freedom to do so.

“What they’re basically saying at the Congressional Budget Office is if you’re not going to force people to buy Obamacare, if you’re not going to force people to buy something that they don’t want, then they won’t buy it,” Ryan said on Fox News of the CBO analysis that cited the 22 million uninsured. “So, it’s not that people are getting pushed off a plan, it’s that people will choose not to buy something they don’t like or want.”

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A number of Republicans have argued that it’s unfair to judge the coverage numbers in their legislation against measures that require people to get insured. Under Obamacare, individuals have to get insurance or pay a financial penalty of 2.5 percent of income or $695 per adult, whichever is higher.

Ryan and other Republicans have a point: CBO estimates of the House and Senate bills found large numbers of people would forgo insurance without a mandate to buy it. In the Senate’s case, the CBO estimated 15 million more people would be uninsured in 2018 alone “primarily because the penalty for not having insurance would be eliminated.”

But it’s not the whole story: The changes to health policy in the House and Senate bills would also affect people’s decision to drop insurance or stay uninsured — and which groups of Americans, in particular, would go without coverage.

“Ryan’s explanation is not entirely wrong, but it misses the main points of the CBO report,” Timothy Jost, a professor at Washington and Lee University School of Law who specializes in health policy, said in an email.

The CBO reports on the House and Senate bills found the increase in uninsured would disproportionately come from relatively low-income customers between age 50 and 64, for example, who get less government assistance under the Republican plans and could be charged higher premiums than under current law.

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In the case of the House bill, CBO found that its changes would raise annual premiums for a 64-year-old making $26,500 in 2026 from just $1,700 under current law to $16,100. Technically, such a person could choose to go uninsured without a mandate, but they would also be choosing between spending over 60 percent of their income on premiums versus about 6 percent.

The Senate bill’s subsidies for premiums scale up by income while the House bill's are fixed by age, but the leaps in premiums would still be significant. A Kaiser Family Foundation report on Tuesday estimated that, on average, effective premiums would rise 74 percent by 2020 for an insurance plan comparable to what’s available today.

The average increase would be 115 percent for people ages 55 to 64 — more than double what they would pay under current law. By contrast, younger customers between 18 and 34 would see smaller average increases in their premiums of 17 percent.

Both the House and Senate CBO reports concluded that many people would go without insurance either because they were no longer covered by Medicaid, because they couldn’t find premiums they considered affordable, because their deductibles were too high to justify their premiums, or (in the case of the House bill) because a pre-existing condition made plans unaffordable.

In the Senate bill, for example, reversing Obamacare’s Medicaid expansion and capping the program’s spending would leave 15 million fewer people covered by 2026. But the CBO concluded that “few low-income people would purchase any plan” afterward even though they were eligible for subsidies to help, because they would pay “a significantly higher percentage of income” in deductibles under the new law.

This stems from clear policy choices in the Senate bill. It provides less generous subsidies aimed at herding people into plans with higher deductibles — the equivalent of about $6,000 for individuals versus about $3,500 under current law. It would also, like the House bill, end additional subsidies for that lower deductibles for low-income customers.

The Kaiser Family Foundation estimated that someone making about $18,000 would have a $255 deductible today, but a deductible of over $6,000 under the Senate plan as a result of these changes. Again, these people could choose to go uninsured, but that choice would factor in a deductible that’s nearly 24 times as large as it would be under Obamacare.

The bottom line: While many people would decide they don’t want insurance without Obamacare’s mandate, the House and Senate bills would also put their finger on the scale in making their decision.