WASHINGTON — Insurance premiums would shoot up 74 percent for the average customer under the Republican Senate health care bill, according to a new report, with older customers having to pay more than twice as much for comparable plans.
The study by the nonpartisan Kaiser Family Foundation looked at the average cost for an individual market plan that covers about 70 percent of medical costs, which is the benchmark plan under Obamacare, and factored in both the price of insurance and the amount of subsidies people would receive.
The Senate bill, backed by Senate Majority Leader Mitch McConnell, R-Ky., encourages customers to buy insurance with higher deductibles, reduces subsidies that lower deductibles for low-income customers, allows insurers to charge older customers more, and provides more generous subsidies for young people than older people.
As a result, the changes would vary dramatically by age and income, with older and low-income customers facing the steepest hikes if they want to maintain similarly comprehensive coverage.
On average, Americans between ages 55 and 64 would see a 115 percent increase, more than double their premiums under Obamacare, to buy a comparable plan. Americans with incomes under 200 percent of the federal poverty line (about $24,000 for individuals) would see 177 percent increases in premiums versus just 57 percent for people with higher incomes.
The changes, by contrast, would be less sweeping for younger and higher-income customers.
Those 18 to 34 years old with incomes over 200 percent of the federal poverty line would see no increase at all in their premiums, according to the report. But those below 200 percent of the federal poverty line would still see increases of 82 percent if they decided to keep a similarly comprehensive plan.
The worst hit would be customers who are both 55-64 and have lower incomes: Their premiums would go up by 294 percent, almost a fourfold increase.
“Faced with premiums almost quadrupling, many of these low-income adults would tend to either go without coverage entirely because it’s unaffordable or gravitate towards a plan with lower premiums and higher deductibles,” Larry Levitt, Senior Vice President for Special Initiatives at the Kaiser Family Foundation, told reporters on Tuesday.
The Senate bill nudges customers towards plans with higher deductibles, which explains some of the increase in premiums. The legislation pegs the amount of subsidies people receive to the price of a plan that cover an average of 58 percent of costs rather Obamacare's 70 percent, roughly the difference between an individual plan with a $6,000 deductible versus a plan with a $3,500 deductible today.
The Congressional Budget Office, in its own analysis on Monday, concluded that premiums and deductibles would likely be too high to entice many low-income customers to buy coverage, leaving millions more without insurance than under current law.