Yesterday, the Congressional Budget Office (CBO) issued its cost estimate on the U.S. Senate’s draft bill to repeal and replace parts of the Affordable Care Act (ACA). The current draft of the Better Care Reconciliation Act (BCRA) is projected to reduce the federal deficit by $321 billion over the next decade and increase the number of uninsured by 15 million in 2018, climbing to 22 million in 2026 relative to current law.
By comparison, the CBO projected that the American Health Care Act (AHCA) passed in the U.S. House of Representatives last month would decrease the deficit by $119 billion over the next decade and increase the number of uninsured by 14 million in 2018 and then climb to 23 million by 2026.
The most striking part of the most recent CBO report is found in Table 5, which compares how the net premium paid (i.e., the amount paid by the individual after accounting for any premium tax credits) would change for low and middle-income individuals and the actuarial value of the coverage (i.e., the percentage of costs for covered services that the plan pays).
- A 64 year-old with an annual income of $26,500 (175% of the federal poverty line) buying a bronze level plan would see their net premium paid increase from zero under the ACA to $2,000 under BCRA. The actuarial value of the plan would decrease slightly from 60% under the ACA to 58% under BCRA.
- If the same 64 year-old were to purchase a silver level plan, the net premium paid would increase from $1,700 under the ACA to $6,500 under BCRA and the actuarial value would decrease from 87% under the ACA to 70% under BCRA due to repeal of the cost-sharing subsidies.
- A 21 year-old with an annual income of $56,800 (375% of the federal poverty line) buying a bronze level plan would see their net premium paid decrease from $4,300 under the ACA to $3,200 under BCRA. Again, the actuarial value would decrease slightly from 60% under the ACA to 58% under BCRA.
- If the same 21 year-old were to buy a silver level plan, the net premium paid would increase from $3,200 under the ACA to $4,100 under BCRA but the actuarial value of the plan would decrease from 87% under the ACA to 70% under BCRA.
The takeaway is that most individuals with low to moderate incomes are likely to see the amount they pay for health insurance go up under BCRA while the value of the coverage they get decreases. In short, they will be asked to pay higher premiums for coverage with higher deductibles and copayments.