The Republican plan to replace the Affordable Care Act (Obamacare) is going to cost a hell of a lot.
If the GOP proposal for healthcare reform were to pass and become fully implemented tomorrow, Vox estimates that Americans would pay an average cost of $1,542 more every year. But by 2020, when the proposed tax credits kick in, enrollees in new health insurance plans would be paying an average of $2,409 more every year.
However, if you shrunk the sample to just include older Americans — who don’t yet qualify for Medicare but will likely use their insurance more than younger Americans — the costs rise exponentially. People aged 55 to 64 could expect to pay $5,269 more each year if the bill went into effect in 2017, and $6,971 by 2020, according to Vox’s calculations.
Perhaps the harshest increase in healthcare costs, in terms of who pays, Americans living below 250 percent of the federal poverty line ($29,700/year if you’re single, $40,050 if married) will see their healthcare costs balloon to a large percentage of their annual income, and could expect to be paying an average of $2,945 more per year right now, and $4,061 more by 2020.
Vox explained that their research came from the combined sum of the Republicans’ official response to Obamacare, breaking down the cost of each different policy piece by piece:
The Republican bill unveiled last night would remove [cost sharing reductions in Obamacare]. It would eliminate the minimum required actuarial value; eliminate cost-sharing reductions for lower-income individuals; and provide flat tax credits by age unrelated to any plan’s cost. These tax credits are for the most part also unrelated to people’s income, but they start to phase out for individuals with income above $75,000. The combined effect of these changes is that the bill would dramatically reduce the generosity of insurance and sharply increase deductibles and other out-of-pocket costs.
The specific average healthcare cost increases for each age and income group were determined based on numbers Health and Human Services Secretary Tom Price used while he was in Congress. After excluding individuals making more than $75,000 per year and joint filers making more than $150,000 per year, The Republican healthcare proposal gives tax credits of:
- 30 and below: $2,000 per year
- 30-39: $2,500 per year
- 40-49: $3,000 per year
- 50-59: $3,500 per year
- 60 and up: $4,000
To estimate the amount of inflation costs each year up until 2020 and compare them side-by-side with Obamacare’s insurance subsidies, Vox used numbers published by the Congressional Budget Office and National Health Expenditure. Additionally, the value of the tax credits provided is expected to decrease over time, adding to the cost burden for each income and age group.
Given the increase in healthcare costs, Americans are expected to be financially incentivized to enroll in “catastrophic” high-deductible plans in return for lower monthly premium costs. This means that most Americans are statistically more likely to pay their annual sum cost of healthcare out of pocket, as the deductible on their plan may not be exceeded.
Finally, by removing the individual mandate that was in the Affordable Care Act, younger, healthier Americans are more likely to not get health insurance altogether, meaning that the risk pool becomes much older and sicker as a whole, which results in premium costs rising dramatically for enrollees, regardless of the plan they purchased.
Given all of these flaws, it’s little wonder both Democrats and Republicans alike are blasting the Republican healthcare bill. Senate passage seems more unlikely by the day, as at least four Republican senators are already attacking it.
Kevin Wallace is a journalist with five years’ experience in print and digital media, and covers politics, media, and culture for the Resistance Report. He lives in Tallahassee, Florida.