The Congressional Budget Office’s analysis of the Better Care Reconciliation Act — the draft bill introduced by Senate Republicans last week — suggests that, in broad strokes, it’s not terribly different from the bill introduced in the House. But like that bill, it does differ in significant ways from the law that’s on the books: the Affordable Care Act, or Obamacare.
In addition to significant changes to the Medicaid program (which we went over here), the system of tax credits meant to assure affordability for lower-income Americans would also see some significant changes.
The CBO broke those changes out in two dimensions, by three age groups and four income ranges. At the lowest income range, for those individuals making $11,400 a year who aren’t eligible for Medicaid and who live in states that didn’t expand Medicaid coverage, the benefits of the Senate bill are significant. People in that group are not covered under the Affordable Care Act, a notorious gap in the plan. Under the Senate bill, they’d get a tax credit, reducing the amount they’d pay for coverage. (In states that expanded Medicaid, those individuals would be eligible for coverage.)
In the other income groups, though, the benefits vary.
The charts below show the cost of insurance (green bars) relative to income (blue bars). Light-green bars are the tax credits. The smaller the dark-green bar relative to the blue bar, the less of that person’s income that would need to go to cover insurance costs.
Overall, notice that older Americans have more green boxes — their care is more expensive. The result, then, is that those individuals would end up paying more of their income for health-care coverage than younger Americans. (This is for those buying their own policies on the market, not for people with coverage through their employers.)
For those in the $26,500 income bracket, Obamacare always means less money out of pocket on health coverage. At higher income levels, though, younger people would pay a bit less under the Senate bill than under Obamacare — but older Americans could pay much more. (The darker blue bars illustrate the better policy plans for each age group.) A 21-year-old making $56,800 would pay 1.8 percent more of his income under Obamacare than under the Senate bill, but someone who was 64 would pay 24.1 percent more of her income.
It’s worth noting that the Senate bill is much better in this regard than the House bill, the American Health Care Act. The CBO analysis of that bill showed much higher costs across the board. A 64-year-old earning $30,000 under that bill would end up spending more than half of his income on insurance. (Below, a version of a chart we created last month after that CBO report.)
The Senate bill sets up an interesting scenario, though. As an American ages, their health care would cost them more and more money — until they hit 65, at which point they’d be eligible for Medicare and pay nothing.
— Tricia Neuman (@tricia_neuman) June 26, 2017
In other words, the key would simply be to stay alive long enough to get guaranteed health coverage. Perhaps easier said than done.