How Health Costs Would Soar for Older Americans Under the Senate Plan
The Congressional Budget Office (CBO) has said health plans for many older Americans would cost much more under the Senate's proposed health plan. Though the mooted Republican health plan would decrease the average premium by 20%, it would also mean lower government subsidies, especially those that help seniors. For example, almost all 64-year-olds would have to pay a greater percentage of their incomes to buy insurance, that will cover them less overall. The report predicts this would cause fewer older Americans to get insurance. The CBO also predicts that 50% of states would get rid of rules mandating a baseline of benefits, meaning more patients would have to pay for aspects of their care. 

In its analysis of the Republican health care bill, the Congressional Budget Office said something confusing: The bill would lower the price of the average health plan, but health insurance would still cost much more for many people, especially for older Americans.

How the annual cost of insurance would change in 2026, after tax credits

64-year-old buying ... Lower-cost, higher-deductible plan INCOME +$2,000 $26,500 +$11,600 $56,800 +$3,100 $68,200 Most popular plan +$4,800 $26,500 +$13,700 $56,800 +$5,200 $68,200 $5,000 $10,000 $15,000 $20,000 $25,000 40-year-old buying ... Lower-cost, higher-deductible plan INCOME +$900 $26,500 –$500 $56,800 –$500 $68,200 Most popular plan +$1,300 $26,500 –$100 $56,800 –$100 $68,200 $5,000 $10,000 $15,000 $20,000 $25,000 21-year-old buying ... Lower-cost, higher-deductible plan INCOME +$400 $26,500 –$1,100 $56,800 –$1,100 $68,200 Most popular plan $26,500 +$500 –$1,000 $56,800 –$1,100 $68,200 $5,000 $10,000 $15,000 $20,000 $25,000 64-year-old buying ... Lower-cost, higher-deductible plan INCOME +$2,000 $26,500 +$11,600 $56,800 +$3,100 $68,200 Most popular plan +$4,800 $26,500 +$13,700 $56,800 +$5,200 $68,200 $5,000 $15,000 $25,000 40-year-old buying ... Lower-cost, higher-deductible plan INCOME +$900 $26,500 –$500 $56,800 –$500 $68,200 Most popular plan +$1,300 $26,500 –$100 $56,800 –$100 $68,200 $5,000 $15,000 $25,000 21-year-old buying ... Lower-cost, higher-deductible plan INCOME +$400 $26,500 –$1,100 $56,800 –$1,100 $68,200 Most popular plan $26,500 +$500 –$1,000 $56,800 –$1,100 $68,200 $5,000 $15,000 $25,000 64-year-old buying ... Lower-cost, higher-deductible plan INCOME +$2,000 $26,500 +$11,600 $56,800 +$3,100 $68,200 Most popular plan +$4,800 $26,500 +$13,700 $56,800 +$5,200 $68,200 $5,000 $10,000 $15,000 $20,000 $25,000 40-year-old buying ... Lower-cost, higher-deductible plan INCOME $26,500 +$900 –$500 $56,800 –$500 $68,200 Most popular plan +$1,300 $26,500 –$100 $56,800 –$100 $68,200 $5,000 $10,000 $15,000 $20,000 $25,000 21-year-old buying ... Lower-cost, higher-deductible plan INCOME +$400 $26,500 –$1,100 $56,800 –$1,100 $68,200 Most popular plan $26,500 +$500 –$1,000 $56,800 –$1,100 $68,200 $5,000 $10,000 $15,000 $20,000 $25,000 Source: Congressional Budget Office

The report estimated that the average premium would decrease by 20 percent, when compared with current law, but that single data point, highlighted in many Republican news releases, obscures the office’s larger message. Only a fraction of customers in the individual market pay the sticker price for insurance. The federal government helps subsidize the rest.

The Republican plan, while lowering the sticker price, would also lower the value of government subsidies for most groups. If you take those subsidies into account, the insurance cost for a given person doesn’t always go down.

The budget office also predicts that, because of less-generous subsidies, a larger share of people would buy a so-called bronze plan, which covers only about 60 percent of the average customer’s medical bills. Under Obamacare, the most popular plan, silver, covers at least 70 percent of typical expenses.

That means middle-income people would be asked to pay more for insurance, and their plan would also come with a significantly higher deductible.

The legislation is devised to make insurance more affordable for younger Americans, who have tended to opt out of coverage under Obamacare. It succeeds in lowering their premiums at most income levels.

But the plan balances those reductions by increasing the gap between the sticker price and the subsidy amount for older Americans. A 64-year-old at nearly every income level would have to pay a much larger share of income to buy insurance that covers a smaller share of her medical bills.

Given that trade-off, the budget office thinks fewer older Americans would have health insurance. That decrease helps drive down the average sticker price, too.

Finally, the report predicted that about half of states would eliminate rules requiring insurance plans to cover a minimum, standard set of benefits, such as mental health treatment and prescription drugs. That means that the 20 percent average price decrease would include plans that require customers to pay for substantial parts of their care out of their own pockets.

Since 2014, states have had an option to expand their Medicaid programs to cover all adults earning below or just above the federal poverty line, and 31 states have chosen to expand. Many adults who earn less in states that didn’t expand have few good insurance options, since Obamacare did not make them eligible for subsidies to buy their own insurance.

How the annual cost would change for a poor person in states without Medicaid expansion

A person earning $11,400 buying ... Lower-cost, higher-deductible plan AGE –$12,600 64 yrs. old –$5,200 40 yrs. old –$4,000 21 yrs. old Most popular plan 64 yrs. old –$10,500 –$4,800 40 yrs. old –$3,900 21 yrs. old $5,000 $10,000 $15,000 $20,000 $25,000 A person earning $11,400 buying ... Lower-cost, higher-deductible plan AGE –$12,600 64 yrs. old –$5,200 40 yrs. old –$4,000 21 yrs. old Most popular plan 64 yrs. old –$10,500 –$4,800 40 yrs. old –$3,900 21 yrs. old $5,000 $10,000 $15,000 $20,000 $25,000 A person earning $11,400 buying ... Lower-cost, higher-deductible plan AGE –$12,600 64 yrs. old –$5,200 40 yrs. old –$4,000 21 yrs. old Most popular plan 64 yrs. old –$10,500 –$4,800 40 yrs. old –$3,900 21 yrs. old $5,000 $15,000 $25,000 Source: Congressional Budget Office

The Republican bill eliminates that gap, by expanding subsidies to poorer Americans who can’t get Medicaid coverage. In theory, that makes them a beneficiary of this plan.