Alaska Deductibles Skyrocket under the Senate Bill to “Repeal and Replace” the Affordable Care Act
Opponents of the Affordable Care Act (ACA) complain about high deductibles, but the Senate health care repeal bill would dramatically increase deductibles, rather than lower them.
In Alaska, 10,110 consumers in the state’s marketplace—nearly three out of every five marketplace enrollees (56%)–would see their per person deductibles rise from an average of $1,395 to $6,000—a 330% increase. Very few people in the marketplace would be charged lower deductibles.1
How the Senate health care repeal bill raises deductibles
- It cuts premium tax credits. Smaller credits would buy less generous plans that have higher deductibles. Average deductibles for insurance funded by these shrunken tax credits would rise from the current $3,600 to $6,000.2
- It completely eliminates the ACA’s payments that help low-wage, working families afford better coverage. The bill ends these payments—known as cost-sharing reductions (CSRs)—starting in 2020. Today, CSRs lower average deductibles from $3,600 to either $2,900, $800, or $300, depending on household income.
Deductibles are what people must pay for health care before their insurance kicks in. Raising them dramatically would impose financial burdens and make it harder for Alaskans to get the medical care they need. The Senate health care repeal bill takes Alaska in exactly the wrong direction.
How the Senate health care repeal bill’s $6,000 per person deductible would affect Alaskans at different income levels:
Out of nearly 18,000 people (17,995) covered through Alaska’s Marketplace:3
- 3,241 Alaskans now have average per person deductibles of $300. Their deductibles would rise by $5,700, a 1,900% increase.4 These are people with incomes between $20,783 and $22,590 for a single individual or between $42,435 and $46,125 for a family of four. For family coverage, deductibles are typically twice the per person amount.5
- 3,703 Alaskans now have average per person deductibles of $800. Their deductibles would rise by $5,200, a 650% increase. These are people with incomes between $22,590 and $30,120 for a single individual or between $46,125 and $61,500 for a family of four.
- 1,753 Alaskans now have average per person deductibles of $2,900. Their deductibles would rise by $3,100, a 107% increase. These are people with incomes between $30,120 and $37,650 for a single individual or between $61,500 and $76,875 for a family of four.
- 1,413 Alaskans now have coverage with average per person deductibles of $3,600. Their deductibles would rise by $2,400, a 67% increase.6 These are people with incomes between $37,650 and $60,240 for a single individual or between $76,875 and $123,000 for a family of four.
The overall impact of the Senate’s health care repeal bill’s $6,000 deductibles on working Alaskans
Altogether, 10,110 Alaskans—the majority of Alaskans on the marketplace—would be directly affected by the Senate health care repeal bill’s dramatic increase to deductibles for marketplace coverage. Their current average deductible is $1,395.7 The Senate health care repeal bill would raise that amount by more than $4,600—a 330% increase, on average.
If anything, this analysis understates the impact of the Senate bill, because it uses the $6,000 average deductible for 2017 bronze coverage to show what consumers would receive under the Senate legislation. In fact, the Senate health care repeal bill pegs premium tax credits to coverage less generous than any bronze plans sold in 2017. Based on the federal tool used to measure generosity of 2018 plans, deductibles for these plans are likely to be around $7,350.8
Consumers have other health care costs, in addition to deductibles. Marketplace consumers must pay premiums to enroll; and even after enrollees pay their premiums and deductibles, insurance companies typically charge co-payments or other cost-sharing.9 The Senate health care repeal bill would add much higher deductibles to these already significant expenses of marketplace coverage.
For low-wage, working families and middle-income Americans, higher deductibles both increase financial burdens and raise barriers to getting needed medical care. Faced with higher deductibles, many people delay seeking health care until their medical problems worsen into emergencies. Others stop buying coverage, because it no longer seems worth the cost in premiums. Either way, consumers suffer.
The Senate health care repeal bill’s increase to deductibles is just one in a series of blows the legislation would strike against state residents.10 Put simply, the legislation would mean higher costs, lower-quality insurance, and less access to care for thousands of Alaskans who rely on marketplace coverage.
View full background and methodology for this analysis.