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Covered California chief: 'Millions' stand to lose coverage

Peter Lee is the executive director of Covered California, the state health insurance exchange. Max Whittaker/Getty Images

"Millions of Californians" are at risk of being priced out of health care if the Republicans' replacement for the Affordable Care Act becomes law, the head of California's state insurance exchange said Tuesday.

Covered California Executive Director Peter Lee declined to go into more specifics about the number. But in light of the Congressional Budget Office's estimate that within 10 years 24 million Americans would become uninsured under the GOP plan, he said "it cannot but be millions" who would lose coverage in California.

He noted that a variety of people would be at risk of losing coverage under the bill, including those who got Medi-Cal through the Affordable Care Act's expansion of eligibility, bought private insurance with the help of the law's subsidies, or gained coverage through its requirement that insurers cover everyone regardless of preexisting conditions.

Lee spoke as his agency released its preliminary analysis of the Republicans' proposed American Health Care Act. The assessment found that under the legislation, older, poor adults in Los Angeles would get significantly less in federal financial support to put toward their insurance premiums than they do under the Affordable Care Act. 

"The most critical element of the [Affordable Care Act] that has expanded coverage is the subsidies that make coverage possible," Lee said. "The dramatic reduction in the amount of subsidies means there's going to be fewer people covered."

Under the GOP’s proposal, some people would receive smaller subsidies, particularly older people making $30,000 a year or less, according to . which would result in them having to pay more out-of-pocket to purchase health insurance, the report from the state insurance exchange says.

Under Obamacare, tax credits are based on age, income, family size and geography. People who earn from 100 to 400 percent of the federal poverty level are eligible for subsidies.

The Republican plan's tax credits would be based primarily on age and range from $2,000 to $4,000.

Compared with the current law, a 62-year-old adult in Los Angeles who makes $17,000 a year would see his annual tax credit drop about 40 percent under the GOP bill, from about $6,672 to $4,000, according to the Covered California analysis.

That decrease would be even more pronounced in San Francisco, where health care is more expensive. There, a 62-year-old adult who makes $17,000 would see his yearly tax credit drop about 65 percent, from about $11,376 to $4,000.

A 62-year-old adult in Los Angeles who makes $20,000 a year would see his tax credit drop about 36 percent, from $6,312 to $4,000, according to the report. If that same adult makes $30,000, his annual tax credit would drop a smaller amount, from $4,812 to $4,000.

A 62-year-old individual in Los Angeles who makes $50,000 isn't eligible for assistance under Obamacare, but would receive a $4,000 tax credit under the GOP plan.

Under the Republican proposal, the credits would gradually phase out for individuals who make more than $75,000 a year and for joint filers earning above $150,000.

Lee said this provision fixes one problem with the current law but in addressing it, "they've created a greater cliff for millions of Americans in terms of making health care unaffordable because of the actual, true health care costs of getting coverage."

He also said that it's wrong to focus too much on average costs, because the impact on individuals varies so much. Lee argued that under the Republican bill, everyone who has health insurance, including those on employer plans, would be a "loser ... paying the bill when people are showing up at hospitals and racking up uncompensated care at a historic level."