Would the Republican health care plan increase out-of-pocket costs?
With House lawmakers set to vote on the American Health Care Act (AHCA) on Thursday, some experts warn that the bill would significantly raise consumers’ health care costs.
How much more? The average deductible for people with private insurance would increase an estimated $1,500, according to Drew Altman, president and CEO of the Kaiser Family Foundation, a nonprofit group focused on health care issues. Under Obamacare, the average deductible was $2,500, and Kaiser expects that to jump to $4,100 under the Republican plan.
“If people have modest means and limited tax credits, and coverage is expensive, they will mostly buy health plans with lower premiums -- and high deductibles,” Altman wrote this week in a column for Axios. And as consumers gravitate to high-deductible plans because of the more affordable premiums, insurers will be more likely to offer only coverage with high deductibles, he added.
In addition, the AHCA would eliminate the cost-sharing subsidies now available to low- and middle-income consumers who buy insurance through Obamacare. These subsidies and the more generous tax credits available under the federal program have made it easier for poorer people to buy policies with lower deductibles.
The Center on Budget and Policy Priorities, a left-leaning think tank, estimates that total out-of-pocket health costs under the AHCA would rise by an average of $3,600 in 2020 for people who buy health insurance through the marketplaces. Even if the entire $85 billion included in the House amendment were used to increase tax credits for older Americans age 50 to 64, overall average, per-person, out-of-pocket costs would still increase by $2,900. This includes premiums, deductibles, co-pays and co-insurance.
Although these increases are bound to hit consumers hard if the bill becomes law, there is a slight safeguard. The current version of the House Republican bill would not remove the annual out-of-pocket health care spending limit for individuals, which this year is $7,350. Once consumers hit that dollar amount in health care costs, insurers must cover 100 percent of any other medical bills in the same calendar year, regardless of the deductible.
With or without the ceiling, however, health care advocates worry that out-of-pocket cost increases under the Republican plan will make health care costs unmanageable for the average American.