President-elect Donald Trump, along with a number of legislators, has vowed to repeal and replace the ACA. With this in mind, the Congressional Budget Office is offering guidance for lawmakers looking to replace the current tax-based subsidies for the purchase of private health insurance in the individual market under the ACA with refundable tax credits.
The insight came via a Dec. 20 blog by the CBO. In the blog, the federal agency said many such proposals would eliminate or reduce the extent of current federal regulations on the individual market, particularly the rules governing health insurance benefits.
According to the blog, if such legislation was passed, the CBO and the staff of the Joint Committee on Taxation expect insurers would offer new types of insurance products in the individual market.
"If there were no clear definition of what type of insurance product people could use their tax credit to purchase, some of those insurance products would probably not provide enough financial protection against high medical costs to meet the broad definition of coverage that CBO and JCT have typically used in the past — that is, a comprehensive major medical policy that, at a minimum, covers high-cost medical events and various services, including those provided by physicians and hospitals," CBO analysts write.
The CBO and JCT would not count people with limited health benefits as having coverage, according to the blog.
In the blog, the CBO goes on to describe the challenges the CBO and JCT would face in estimating the number of people who would purchase coverage in the individual market, and the scope of that coverage, under such proposals. The blog also encouraged legislators to consider what type of insurance products would qualify for tax credits and what role states would have in making that determination.
Click here to read the full blog post.