Why Deductibles Would Rise Under the GOP Health Care Plan

As the chart shows, the average deductible for a typical plan in the non-group market under the GOP plan would be about $1,550 higher in 2017 than it would have been under the Affordable Care Act, based on our analysis for this column. Most of the debate has been about what would happen to premiums — but for consumers, it’s total out-of-pocket costs that matter.

Under the Affordable Care Act, the low-premium, high-deductible health plans are called “bronze” plans — so think of this as the “bronzification” of the non-group market. The result: premiums may be lower in some cases, but deductibles will go up.

That is based on the Congressional Budget Office’s conclusion that the AHCA will result in health plans covering a lower share of patients’ medical expenses. They’d have an average actuarial value across plans of 65% — meaning insurers would cover 65% of medical expenses on average for its enrollees — compared with the current market under the ACA, which has an average actuarial value of 72%.

The drop would be due to consumers gravitating to lower premium plans, insurers increasingly offering only those plans, and the elimination of the cost sharing subsidies the ACA provided to insurers. That could change now that the House is adding a reserve fund of as much as $85 billion to beef up the tax credits for older customers, but it depends on what the Senate does with the money.

President Trump said his plan to replace Obamacare would have “lower numbers, [and] much lower deductibles.” When advocates of the AHCA talk about expanding choice of lower cost plans, keep in mind that they are focusing on the premiums, not the overall costs to consumers.

But insurance market dynamics, the CBO, and now this new analysis suggest that those out-of-pocket costs will go up for many consumers buying their own insurance, particularly people who need more health care services.