One version of the GOP health bill now under consideration promises lower premiums for consumers. To get there, that version of the Better Care Reconciliation Act (BCRA) bill would require patients in standard plans to spend as much as about $13,000 upfront on their own care.
The deductibles would be so high, in fact, that they’d violate maximums set in U.S. law, an analysis by the nonpartisan Congressional Budget Office (CBO) said Thursday. Under the current Affordable Care Act rules, by comparison, an individual in a standard plan would have a deductible of roughly $5,000.
The analysis shines new light on a cost issue that’s gone less noticed amid the debate over health insurance premiums, and could unnerve some moderate GOP senators, Larry Levitt, a senior vice president at the Kaiser Family Foundation, said.
“Many of the moderates have talked about wanting to be assured that the bill really does provide adequate coverage to people, and deductibles are a part of that,” he said. “There have been so many promises from the president and others that this bill would lead to lower deductibles and, in fact, it would do just the opposite.”
It’s the latest misfire for the Republican health insurance proposal, which was written largely behind closed doors and without much consultation from patients, doctors or insurers. Broadly, the latest version of the BCRA bill is similar to the previous one. It would increase the number of uninsured Americans by 22 million in a decade, a number that still presents a political obstacle to Majority Leader Mitch McConnell’s efforts to shore up support.
The BCRA bill would raise costs for many people with private coverage and slash Medicaid spending, CBO said Thursday. The version of BCRA evaluated by CBO didn’t include a key proposal backed by Texas Republican Sen. Ted Cruz designed to offer individuals access to coverage options free from many Affordable Care Act rules, but an analysis of the Cruz proposal could be added later, according to a Republican aide. Insurers have said the amendment would undermine insurance markets and end protections for sick people.
A copy of the CBO report is available here.
Cuts to Medicaid account for much of reductions in coverage, and may pose McConnell’s biggest challenge among moderate members of his party. The bill reduces federal spending on the health-insurance program for the poor by $756 billion over a decade, which would result in 15 million fewer people enrolled in the program in 2026, compared with current law. Much of the rest of the coverage losses come from the individual insurance market, where the Senate bill would reduce subsidies that help people buy plans.
The high deductibles are another key reason for the coverage declines foreseen by CBO. Under the current Affordable Care Act rules, a person who makes $26,500 a year could buy a health plan with a deductible of about $800, thanks to special subsidies for low-income people. Those subsidies, known as cost-sharing reductions, are eliminated in the Senate bill. Under the BCRA, that person would face a $13,000 deductible, roughly half their income. CBO figures, therefore, that they probably wouldn’t buy an insurance plan.
Money to Spend
The Senate bill reduces the deficit by $420 billion, the CBO said. The increase from a $321 billion in deficit reduction projected in an earlier version may give Republican leaders additional money they can use to court holdout votes. Much of the increased funding comes from the elimination of tax cuts for the wealthy.
One use of the funds may be to provide extra money to states to help move poor people from Medicaid coverage and on to private insurance plans. Seema Verma, the head of the Centers for Medicare and Medicaid Services, proposed that idea to some GOP senators on Wednesday night, Alaska Sen. Dan Sullivan said. Sullivan said Verma called it a “wraparound” plan, to provide extra help in the individual market for lower-income people.
Such a plan would be similar to the cost-sharing reduction subsidies that are currently available through the Affordable Care Act exchange plan coverage. The subsidies lower out-of-pocket costs for people making between 100% and 250% of the poverty level. The GOP plan would end that help. Legislative text or policy details of Verma’s plan haven’t been made public, and it isn’t clear that there’d be enough funding in the bill to help all the low-income people who’d be moved off Medicaid maintain similar coverage to what the current Affordable Care Act system provides.
— Read What’s Next for the DOL Fiduciary Rule? on ThinkAdvisor.