BEYOND THE NUMBERS
Along with reducing health coverage by 24 million, as we wrote earlier today, the House Republican bill to repeal the Affordable Care Act (ACA) would make coverage less available and less affordable for virtually all age and income groups — causing uninsured rates to rise for young, middle-age, and older Americans with incomes both below and above 200 percent of the federal poverty line — the Congressional Budget Office (CBO) found.
While dismissing CBO’s analysis, Republicans have pointed to one of its numbers: that average individual market premiums will fall by 10 percent by 2026. In doing so, they apparently misunderstood what the report says would happen to the individual market and to low- and moderate-income people, most of whom would pay more in premiums for skimpier health insurance that charges substantially higher deductibles and co-payments.
- Millions will pay substantially higher premiums due to large cuts in tax credits that outweigh the slight decrease in average premiums. The premium decrease that Republicans are citing is the average change in the sticker price of health insurance, without accounting for the House plan’s large reductions in tax credits. In fact, CBO and the Joint Committee on Taxation (JCT) “estimate that the average subsidy [for subsidized enrollees] under the legislation would be by 2026 about 50 percent of the average subsidy under current law.” That means consumers will pay a considerably greater share of total premium costs than under current law — so even if average premiums fall, what many people actually pay will rise. CBO provides an example of a 40-year-old with an income of $26,500. That consumer could buy a health plan in 2026 with a sticker price somewhat less than under current law, but would have to pay $700 more in premiums, taking into account the large cut in tax credits.
- Despite promises by President Trump and others, deductibles and other cost-sharing would rise substantially — further increasing how much families pay out of pocket. The comparison of average overall premiums ignores the fact that insurance coverage would be much skimpier in 2026 — with the average “actuarial value” (the share of a person’s health costs that a plan covers) dropping sharply. So, even as average premiums fall, out-of-pocket costs would rise, as CBO explains: “Because of plans’ lower average actuarial values, CBO and JCT expect that individuals’ cost-sharing payments, including deductibles, in the non-group market would tend to be higher than those anticipated under current law.” That violates President Trump’s specific promise earlier this year that his repeal plan would bring “much lower deductibles.” CBO provides the example of people with incomes between 150 and 200 percent of the poverty level, for whom the value of a typical plan would drop by 25 percent — which could translate into a deductible increase of more than $2,500 — but notes that the value of coverage would fall at higher incomes as well.
- The drop in average premiums occurs partly because older adults are likelier to lose coverage because they can no longer afford it, removing them from the average. Average premiums would rise 20 to 25 percent for 64-year-olds, while dropping 20 to 25 percent for 21-year-olds, CBO estimates. Unsurprisingly, older people would be the most likely to find individual market coverage unaffordable. “A larger share of enrollees in the non-group market,” CBO concludes, “would be younger people and a smaller share would be older people.” That fact alone will reduce average premiums because older people have higher health costs and premiums than younger people. In other words, if a 64-year-old drops out of the market altogether because he can’t afford to pay for insurance, that lowers the average premium in the individual market since he no longer appears in the calculations.