Buzz
We now have some projections on how the GOP's proposed replacement for the Affordable Care Act will affect health insurance coverage and costs. According to the Congressional Budget Office, an estimated 24 million people could lose coverage, while the rest may face higher deductibles.
You can check out the full report here. The CBO focuses on large-scale questions, like the effect on the deficit and the number of people who will lose coverage each year. It doesn't predict specific outcomes for your current plan, but with this data, we can make some informed guesses.
By the way, this bill is still far from becoming law, despite efforts from Congressional Republicans to fast-track it. It hasn't been voted on by the full House of Representatives yet, and after that, it would need Senate approval. President Trump could veto it afterward if he wanted to fulfill his campaign promises of “providing coverage for everyone” and implementing “no cuts to...Medicaid.”
This bill is just the first phase of a three-step plan. In the future, Congress might consider cutting essential benefits like maternity care, meaning insured individuals could get even less value for their premiums. But that’s a concern for later—let’s focus on the legislation currently before Congress.
Will I lose my insurance coverage?
It’s possible. If the bill passes, 24 million people will lose coverage by 2026.
Currently, about 10 percent of people are uninsured. If the ACA remains in effect, this number will stay the same. However, if the American Health Care Act replaces it, the uninsured rate will climb to 19 percent, surpassing the levels seen before the ACA was enacted.
The CBO estimates that the following groups will lose coverage:
4 million people who will drop insurance this year because the tax penalty will no longer be enforced. This applies to those who only have insurance because of the penalty.
14 million people who would have qualified for Medicaid. This includes many low-income adults in the 31 states that expanded Medicaid. Medicaid also serves children, individuals with disabilities, and seniors in long-term care. Cuts and caps to Medicaid start in 2020.
2 million people each year who will face a 30 percent penalty for gaps in coverage. This penalty encourages people to keep their insurance, meaning an initial 1 million people will avoid dropping coverage right away.
Additionally, many will opt out as premiums rise. Older individuals will experience significant premium increases, while younger people will be less impacted, although other changes will make insurance less attractive for them.
Many of the uninsured will be those who purchase their insurance through the exchanges or rely on Medicaid. However, the CBO also predicts that some employers may stop offering insurance as a benefit, affecting up to 2 million people who could still choose to buy coverage on their own. On the positive side, employers might use the savings to invest in other benefits or provide employees with a small raise.
Will my premiums increase or decrease?
First, premiums will rise, then decrease—if you’re young. For older individuals, premiums will continue to climb.
Initially, premiums in the individual market will rise by 15 to 20 percent. With the repeal of the tax penalty, younger, healthier individuals who choose to forgo insurance won’t contribute to the insurance pool, forcing premiums to increase for those who remain insured.
By 2026, premiums are expected to be slightly lower, on average, compared to what they would be under the ACA. (The CBO did not compare these figures to current premiums, so they might still be higher than what you're paying now.)
Premiums may decrease, but that's because insurance will offer less coverage. You won't be paying less for the same benefits, you'll simply be receiving fewer benefits.
But there’s a catch. Premiums will drop because insurance will cover less. You’re not getting the same coverage for less money; you’re just receiving fewer benefits. As we'll explain below, you'll face higher out-of-pocket costs due to increased deductibles and cost-sharing.
Currently, the ACA supports insurance affordability by paying part of your premium if your income is below a certain threshold (400 percent of the federal poverty line, which is around $24,000 this year). The amount of assistance depends on both your income and the cost of insurance in your area.
The AHCA's approach to making insurance more affordable is to eliminate this support and instead offer a tax credit that is larger for older individuals. However, insurers would also be allowed to charge older people up to five times more than younger individuals, and the new tax credit does little to offset these increased premiums.
Here’s an example: in 2026, under the ACA, a single person earning $26,500 would pay $1,700 in premiums annually, regardless of their age. Under the AHCA, if it passes, a 21-year-old would pay $1,450 (not bad), but a 60-year-old would face premiums of $14,600. That’s more than half of their small income. If this person had a coverage gap, the penalty would increase the total to 77 percent of their income, leaving just $6,000 for all other expenses, including their deductible.
Will my deductible still be outrageously high?
Yes.
In fact, it will likely get even worse. Currently, the cheapest insurance plans must cover at least 60 percent of the costs for their customers. These are the 'bronze' plans, with higher tiers covering more: 70 percent for silver, 80 percent for gold, and 90 percent for platinum. Any insurer wishing to participate in the Marketplace must offer at least a silver and a gold plan.
The AHCA removes these requirements, meaning insurers could choose to offer only low-coverage plans. The CBO predicts that plans offering less than bronze coverage will be uncommon. However, it also estimates that plans offering more than bronze coverage will be rare because they would attract sicker individuals, leading to higher medical costs, which could make them unprofitable for insurers.
High deductibles are an easy way to lower insurance costs (to make it more appealing to buy), but they also reduce the effectiveness of the insurance itself. If a plan covers only 60 percent of costs, many people will end up hitting their deductibles and possibly paying additional coinsurance and copays. The ACA currently provides subsidies for these 'cost-sharing' expenses to low-income individuals, but those subsidies will be eliminated, making the deductibles even more burdensome.
Will I still be able to buy coverage if I choose to?
The good news is that the CBO believes the insurance market will remain stable—there’s no “death spiral” that will cause the industry to collapse—under both the ACA and its proposed replacement. This means insurance will still be available. A few employers might stop offering insurance as a benefit, as we’ve noted, but you will still be able to purchase your own coverage.
However, it may be harder to compare plans. Without clear plan tiers, it will become more difficult to distinguish which plan offers the best value. Additionally, there will no longer be a requirement for insurers to list their plans on exchange websites like healthcare.gov, which made it a convenient place to compare options.
The range of plans you can choose from will likely change. There will probably be many low-coverage plans available, which tend to be the most affordable. However, if you’re looking for high-coverage insurance (with lower deductibles, for instance), there’s no guarantee that insurers will offer such plans.
You may also find that insurance is simply unaffordable if you are older, have a low income, or live in an area where premiums are particularly high. The ACA’s subsidies helped in these cases, but those subsidies would disappear if the new law passes. While you might technically have the 'choice' to go without insurance or opt for a low-coverage plan, without sufficient funds, you won’t realistically have the option to purchase any coverage at all.
