Wisconsin Deductibles Skyrocket under the Senate Bill to “Repeal and Replace” the Affordable Care Act
By Stan Dorn,
07.20.2017
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 Wisconsin, 155,291 consumers in the state’s marketplace— more than two out of every three marketplace enrollees (69%) – would see their per person deductibles rise from an average of $1,423 to $6,000—a 322% 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 Wisconsinites to get the medical care they need. The Senate health care repeal bill takes Wisconsin in exactly the wrong direction.
How the Senate health care repeal bill’s $6,000 per person deductible would affect Wisconsinites at different income levels
Out of nearly 225,000 people (224,208) covered through Wisconsin’s Marketplace:3
- 58,429 Wisconsinites 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 $13,670 and $20,505 for a single individual or between $27,950 and $41,925 for a family of four.5 For family coverage, deductibles are typically twice the per person amount.
- 45,921 Wisconsinites now have average per person deductibles of $800. Their deductibles would rise by $5,200, a 650% increase. These are people with incomes between $20,505 and $27,340 for a single individual or between $41,925 and $55,900 for a family of four.
- 23,720 Wisconsinites 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 $27,340 and $34,175 for a single individual or between $55,900 and $69,875 for a family of four.
- 27,221 Wisconsinites 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 $34,175 and $54,680 for a single individual or between $69,875 and $111,800 for a family of four.
The overall impact of the Senate’s health care repeal bill’s $6,000 deductibles on working Wisconsinites
Altogether, 155,291 Wisconsinites—most state residents 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 $1,423.7 The Senate health care repeal bill would raise that amount by more than more than $4,500—a 322% 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 copayments 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 Wisconsinites who rely on marketplace coverage.
View full background and methodology for this analysis.
Endnotes
1 The only realistic exception involves the very small population of adults who are (1) young; (2) have incomes too high for PTCs (more than $54,680 for a single person); but (3) do not work at a job that offers health benefits and so buy marketplace coverage. The Senate health care repeal bill increases the extent to which insurers can discriminate based on age in setting premiums. As a result, the few young adults working in high-paying jobs without health benefits who buy marketplace coverage today could enroll in coverage with lower deductibles while spending the same amount on premiums as they would under current law.
2 Average deductible amounts at each CSR level and for people in silver plans without CSRs are taken from the Congressional Budget Office’s (CBO’s) cost estimates for the Senate bill. CBO. June 26, 2017. “H.R. 1628 Better Care Reconciliation Act of 2017,” CBO Cost Estimate. See page 27, footnote 3, downloaded 7/4/2017. These represent average deductibles for 2017 coverage.
3 The numbers of people in the marketplace and in each category of coverage are from 2016. Enrollment numbers are generally lower for 2017.
4 Numbers of Wisconsinites receiving CSRs at each level are from HHS Assistant Secretary for Planning and Evaluation (ASPE). December 22, 2016. “Health Insurance Marketplace Cost Sharing Reduction Subsidies by Zip Code and County 2016.” downloaded 7/4/2017.
5 The general lower income bound for PTC eligibility in Wisconsin is 100 percent of the federal poverty level, since Wisconsin did not expand adult Medicaid eligibility under the ACA.
6 The number of Wisconsinites with premium tax credits but not CSRs, as well as the total number of Marketplace enrollees, are from HHS Centers for Medicare and Medicaid Services (CMS). June 30, 2016. “First Half of 2016 Effectuated Enrollment Snapshot.” downloaded 7/4/2017. We reduce that number by the percentage of tax credit beneficiaries who enroll in bronze coverage, as shown in ASPE. March 11, 2016. “Addendum to the Health Insurance Marketplaces 2016 Open Enrollment Period: Final Enrollment Report for the period: November 1, 2015 – February 1, 2016.” downloaded 7/5/2017ASPE Issue Brief. See Appendix Table C14.
7 This is a weighted average deductible that combines Wisconsinites in the four income groups listed earlier.
8 The Senate health care repeal bill would peg premium tax credits to the median premium of plans with a 58 percent actuarial value. Using CMS’s federal actuarial value calculator for 2018, a plan with an individual deductible equal to the annual out-of-pocket cost-sharing limit for 2018, which is $7,350, has an actuarial value of 58.54 percent.
9 Some services are covered before consumers meet their deductible. Certain recognized preventive services must be covered without charge, for example. Also, consumers enrolling in standardized plans receive some coverage of non-preventive care before the deductible is reached. The Senate bill would place these safeguards at risk in its wide authorization of state waivers.
10 See, e.g., https://familiesusa.org/resources/repealing-essential-health-benefits-will-leave-people-with-preexisting-conditions-unprotected/.