Winners, Losers by the Numbers: California and the GOP Health Plan

Californians are trying to understand how the new Republican health care bill introduced last week might affect them. Who wins? Who loses?

Covered California crunched the numbers, and then we put them in plain English. In a nutshell: When compared to the Affordable Care Act (Obamacare), insurance subsidies drop under the American Health Care Act (the new Republican bill) if you’re older, poorer or live in Northern California, where medical costs are higher.

Who loses?

A 62-year-old in San Francisco with an annual income of $40,000 currently gets $9,500 in tax credits for health insurance. Under the Republican bill, the tax credit drops by $5,500, and coverage could become unaffordable.

Who wins?

A 27-year-old in Los Angeles, also with an annual income of $40,000, currently gets $180 in tax credits for health insurance. Under the Republican bill, her tax credit increases by $1,800.

Why?

Because the Affordable Care Act subsidizes insurance premiums based on your age, income and how expensive health insurance is in your hometown. The Republican replacement plan only takes into account age, and ignores income and local market conditions.

In Northern California, hospitals and doctors charge up to 40 percent more than they do in Southern California.

Why does health care in Northern California cost more?

“In Northern California, there’s a more concentrated delivery system with a few major providers,” said Peter Lee, executive director of Covered California.

But in Los Angeles, there’s more structural diversity among hospitals and medical groups. That means more competition — and lower prices.

Lee explained Obamacare tried to level costs, giving people up north a higher subsidy to pay for insurance. The Republican plan overlooks regional cost variations.