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Could the Senate GOP’s Obamacare repeal lower your premiums? It depends

  • The Congressional Budget Office estimates the Senate's health-care reform bill will bring the uninsured rate back to pre-Obamacare levels by 2026.
  • That would result in 22 million people not having coverage.
  • Premiums will be based on a benchmark plan that includes less coverage and higher deductibles, which will mean lower premium subsidies.
Senate Majority Leader Mitch McConnell, R-Ky., followed by Sen. John Barrasso, R-Wyo., and Sen. Cory Gardner, R-Colo.
Bill Clark | CQ Roll Call | Getty Images
Senate Majority Leader Mitch McConnell, R-Ky., followed by Sen. John Barrasso, R-Wyo., and Sen. Cory Gardner, R-Colo.

Here's how the Senate GOP's health-care bill could affect you.

The Congressional Budget Office estimates the Senate's health-care reform bill will bring the uninsured rate back to pre-Obamacare levels by 2026, resulting in 22 million people not having coverage due to "lower spending on Medicaid and substantially smaller average subsidies for coverage" in the individual market.

The CBO estimates that under the Senate's proposal, premiums will be based on a benchmark plan that includes less coverage and higher deductibles, which will mean lower premium subsidies.

The difference could be especially pronounced for baby boomers like independent consultant John Nehls, whom we met this spring. He's worried about rates next year, because once again there will be just one insurer offering coverage on the exchange.

"Our only choice will be whatever Blue Cross decides to offer," said the 55-year-old Knoxville, Tennessee, resident, who makes about $40,000 a year.

This year, Nehls' exchange plan for his family of three cost $23,640, but because he was eligible for a tax subsidy his net premium was $6,240 for the year. His subsidy is based on a more generous mid-tier silver plan.

Because of his age, under the Senate plan insurers could charge him up to five times more than a younger person, and he would have to kick in more of his income toward his premium before he would be eligible for a tax subsidy.

For boomers: Higher premiums, cheaper subsidies

For a single person around 60 years old and in Nehls' income bracket this year, a mid-tier silver plan in Knoxville costs about $12,530 a year, according to analysts from the Kaiser Family Foundation. With an $8,450 tax subsidy, the net cost falls to $4,080 or about 10 percent of the person's income.

Under the Senate plan, the annual premium on a silver plan for the 60-year-old would shoot up to about $16,800, while the tax credit would decrease to $7,750. The net annual cost would be $9,080, or about quarter of the individual's income.

"That's pretty steep to be paying for health care," said Nehls, who has high medical needs after a biking accident left him in a wheelchair three years ago.

For millennials: Better math for some

For a younger person earning roughly the same income, prices would be dramatically cheaper, according to the Kaiser Family Foundation.

Under Obamacare, a 27-year-old in Knoxville would pay about $4,840 a year for a silver plan. With the new age rating under the Senate plan, that gross premium would drop to $4,460. Under the Senate plan, the 27-year-old would only be expected to pay 8 percent of his or her income, which would mean a net premium of less than $3,200 – 22 percent less than under Obamacare.

From Medicaid to private market: A mixed bag

The CBO estimates for working poor enrollees who earn less than the federal poverty level, access to subsidies under the Senate bill would still not be enough make coverage affordable.

In one example, CBO researchers estimate that for the 2.6 million Americans in states that did not expand Medicaid, like Texas and Florida, net annual premiums by 2026 would be just $300 a year, after subsidies for a low-tiered bronze plan.

However, those cheap plans would come with unaffordable out-of-pocket costs. For a person earning below $11,500 "the deductible would be more than half their annual income" under the Senate plan, according to CBO analysts.

The CBO expects about half of the U.S. population would be in states that would seek waivers to provisions of Obamacare's essential health benefits, but that under the Senate bill there would be more pressure on states to compete for federal funding "to pursue their policy goals."

Nehls has hopes that if Republicans push through legislation to let people buy insurance across state lines in more balanced markets, that it would foster greater competition.

For now, the thought of not having a plan that he can afford to pay for is frightening.

"That you could literally have nothing – then what?" he asked. "Walk into the hospital and say: Treat me?"

Read more: The Senate bill's new health coverage penalty is a throwback

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