We have been focused recently on the impact of the Senate health care bill on Medicaid, mainly because the dangers of both the House and Senate bills to Medicaid have not been well known, and because the Senate bill is far worse than the House bill.
So, in this and next post I want to remind you that if you purchase health insurance on the exchanges / marketplaces or receive it from your employer, the Senate bill is bad for you as well.
The following table looks at the impact of the Senate bill on the average premiums Pennsylvanians at different ages and income levels will pay for silver plans on the marketplace. For all but 35 year olds at 300% of the poverty, premiums will be higher than under the ACA. For Pennsylvanians who have lower incomes or are older, the premium increases are substantial. For forty-five year olds the increases range from $879 to $2,241. For sixty year olds the increases range from $2,061 to $5,155.
Premiums go up so much for a few of reasons. First, tax credits are calibrated in the Senate bill to the lower-cost bronze plans rather than to higher-cost silver plans, as they are in the ACA. Tax credits are lower, in other words, because the Senate bill only seeks to help people purchase the lower premium bronze plans which, however, have much higher out of pocket costs – co-pays and deductibles. The median deductible for a bronze plan is $6,300, more than twice that for a silver plan at $3,000.
Second, the Senate bill directs more money to younger and higher income people, which is why older and lower-income people especially do poorly under the bill.
Third, the bill eliminates tax credits for everyone between 350% and 400% of the federal poverty line.
Fourth, the bill allows insurers to charge older people up to five times what they charge younger people, instead of the three to one ratio allowed under the ACA.
And, fifth, the Senate bill eliminates the cost-sharing reduction that reduces out of pocket expenses for people whose income is below 250% of the poverty line.
Note that the table above only looks at premiums for silver plans, not the added out of pocket expenses. The elimination of the cost-sharing reductions would so affect low-income consumers that, as the CBO reports says, very few of them will purchase any insurance on the exchanges.