Drop in Benchmark Benefits and Tax Credit Support Highlighted in New Report that Compares Costs and Comprehensiveness of BCRA

The National Academy for State Health Policy (NASHP) in collaboration with Covered California today released a new report, Barely Covered: Initial Analysis of Coverage and Affordability Impacts to Consumers Under the Proposed Better Care Reconciliation Act, and 50-state interactive tool that compare the costs and comprehensiveness of coverage under the Better Care Reconciliation Act (BCRA) and the Affordable Care Act (ACA).  This initial assessment of BCRA, which compares the benefits, deductibles, and maximum out-of-pocket expenses in California, Ohio, and Pennsylvania, showed significant reductions in benchmark benefits and tax credit support particularly for lower-income and older individuals.

Currently, the ACA uses the silver level plan as its benchmark.  The silver level plan on average pays 70 percent of the consumer’s health care costs.  Under BCRA the benchmark plan will be the bronze level, which covers only 58 percent of costs. BCRA also allows plans to charge older consumers five times more than younger ones, limits who is eligible for subsidies, allows states to waive out of providing Essential Health Benefits as part of coverage plans, and in two years repeals cost-sharing reductions that protect lower-income consumers from high out-of-pocket costs.  A key difference in plans highlighted by the report is that consumer cost sharing will be higher and more services will be subject to cost sharing

“Seventy percent of consumers currently in the marketplace are covered by silver plans;” said Trish Riley, Executive Director of NASHP.  “Under the BCRA, many who like that coverage and want to keep it will be hard-pressed to afford the costs.”

The report shows the differential in cost and coverage for benchmark plans under both ACA and BRCA by comparing estimated annual consumer premiums in both a high- and low-cost county in each state. For example a 60-year-old in Muskingum County Ohio, a high-cost county, earning $50,000 annually would pay $5,100 under the ACA, that cost would jump to $16,130 under the BCRA.  Comparatively, a 27-year-old in the same county with the same income would see premium costs drop from $4,640 under the ACA to $4,280 under BCRA (see 50 state interactive tool).

“These potential impacts should be carefully evaluated to determine their likely impact on the stability and long-term viability of the individual insurance market.”  Added Riley.

The report noted that Stability funds included in the BCRA could offset some costs but would require significant state outlays in future years. States may need to choose between strategies to moderate high prices or to backfill the loss of federal funds to protect consumers from high out-of-pocket costs.

*Covered California is the largest State-based Marketplace in the country