Under House Bill Consumers Will Pay More For Less

There are countless sobering findings in the Congressional Budget Office’s (CBO) assessment of the House GOP repeal bill, most importantly that the bill would lead to 24 million people losing health insurance. In addition to taking away coverage from millions of people, CBO also found that this bill would move the remaining insured into skimpier coverage, with much higher cost-sharing than they have today. This is in part because the bill would completely eliminate the Affordable Care Act’s financial assistance that helps people afford their deductibles and copays—known as “cost-sharing”—and would allow insurers to sell plans that force consumers to pay even higher deductibles and co-pays than they do now (“increased cost-sharing”). It also is due in part to the fact that this bill would drastically cut financial assistance with premiums, leaving many people only able to afford cheaper plans that come with much higher out-of-pocket costs.

House Repeal Bill Would Push Millions into Skimpier Plans

To be specific, CBO estimates that under the GOP repeal plan, by 2026, the average actuarial value of plans purchased on the marketplace would be only 65 percent. Actuarial value may seem like a complicated term, but it has very real importance. In its simplest explanation, actuarial value is the measure of how generous a plan is. The lower a plan’s actuarial value, the higher it’s cost-sharing—or cost to consumers—like deductibles, copays and coinsurance.

Today, the vast majority of people with marketplace coverage—8.5 million people—are enrolled in silver plans. Of those, 7 million also get financial assistance to further reduce cost-sharing in their silver plan. While there are numerous ways that insurers could design a health plan with a 65 percent actuarial value, it is a foregone conclusion that such a plan would have significantly higher out-of-pocket costs than the coverage that these 8.5 million people have today. This is simply because silver plans have a higher actuarial value. When you add in the financial assistance most of these people receive to further reduce cost-sharing in a silver plan (and, in effect, increase their plan’s actuarial value), the difference between a 65 percent actuarial value plan and the level of coverage people have today only grows.