- A recent report from CMS found that skimpier coverage under the American Health Care Act (AHCA) would have the effect of more than doubling deductibles from $3,000 per year to $7,250.
- Analysis finds that using AHCA subsidies to fund “no-cost premium plans” would leave many consumers with no access to care because of high deductibles and reduced benefits.
- Deductibles could range from $10,000 to $39,000 a year for consumers in median-cost counties, and up to $58,000 in high-cost regions with AHCA subsidies as the basis for purchasing coverage.
SACRAMENTO, Calif. — Covered California released an analysis Wednesday that shows that some deductibles would need to be as much as $58,000 a year under one proposal being floated during the current health care debate in Washington. The proposal introduces the concept of “no-cost health plans” that are fully funded by the reduced financial assistance offered under the American Health Care Act (AHCA).
“All health insurance coverage is not created equal,” said Peter V. Lee, executive director of Covered California. “The low subsidies and ability of states to waive benefit rules in the AHCA would result in coverage that is far worse than what many consumers saw prior to the Affordable Care Act. The prospect of fewer benefits and dramatically higher deductibles than the least expensive plan currently offered by Covered California means all too often coverage would be in name only.”
A recent report from the Centers for Medicare and Medicaid Services’ (CMS) Office of the Actuary (OACT) found that cost sharing under the AHCA would be about 61 percent higher. Using current Patient Protection and Affordable Care Act benefit designs, this means that a Silver-tier plan would move from having an annual deductible of $3,000 to an annual deductible of more than $7,250 under the AHCA.
Covered California’s analysis also examined the idea of automatic enrollment into “no-cost” health plans, an idea suggested in a recent Health Affairs blog, to provide one window into whether the subsidies proposed in the AHCA would be adequate to meet consumers’ needs. The analysis found that deductibles could actually be much higher than the OACT projection. In this system, insurers would need to dramatically raise deductibles and reduce benefits so the plans could be completely paid for by the tax credits provided in legislation designed to replace the Affordable Care Act.
“This analysis is timely as the Senate considers making a proposal to reform the Affordable Care Act,” Lee said. “A central question that needs to be asked of any replacement legislation is not just how many Americans stand to lose coverage, but to what extent would we return to the pre-Affordable Care Act days when millions who thought they had coverage faced the reality of exclusions, very high deductibles and gaps in coverage that made care unaffordable.”
Health plans available through Covered California have patient-centered benefit designs, which increase the number of services that are available without being subject to a deductible.
Most outpatient services in Silver, Gold and Platinum plans are not subject to a deductible, including primary care visits, specialist visits, lab tests, X-rays and imaging. Even consumers in Covered California’s most affordable Bronze plans are allowed to see their doctor or a specialist three times before the visits are subject to the deductible.
The lead author of the analysis, “The American Health Care Act Would Deliver Coverage in Name Only for Many With Unaffordable Deductibles,” is Covered California’s Chief Actuary, John Bertko.
“In the coming days, analysts need to scrutinize the nature of coverage being offered given the size and structure of the subsidies,” Bertko said. “This analysis seeks to spotlight those issues, and based on what we know today, the policies being discussed in Washington would be practically worthless to the vast majority of consumers.”
About Covered California
Covered California is the state’s health insurance marketplace, where Californians can find affordable, high-quality insurance from top insurance companies. Covered California is the only place where individuals who qualify can get financial assistance on a sliding scale to reduce premium costs. Consumers can then compare health insurance plans and choose the plan that works best for their health needs and budget. Depending on their income, some consumers may qualify for the low-cost or no-cost Medi-Cal program.
Covered California is an independent part of the state government whose job is to make the health insurance marketplace work for California’s consumers. It is overseen by a five-member board appointed by the governor and the legislature. For more information about Covered California, please visit www.CoveredCA.com.
