Despite false rhetoric that current law burdens American households with high out-of-pocket costs, the replacement plan put forth by President Trump and Republicans in Congress, known as the American Health Care Act (ACHA), would substantially increase out-of-pocket costs. According to a new analysis by EPI Research Director Josh Bivens, Americans would pay roughly an additional $33 billion in the form of higher deductibles, copays, and coinsurance by 2026. Millions of Americans would also face substantially higher costs of insurance premiums, and millions more would be forced to go without any insurance at all.
“Higher out-of-pocket costs are a feature of the AHCA, not a bug,” said Bivens. “Giving patients more ‘skin in the game’ is a flawed strategy to control the growing cost of health care. The only way it reduces costs is by forcing patients to cut back across-the-board on the care they receive, regardless of how effective or necessary this care is.”
The AHCA would boost out-of-pocket costs in four broad ways:
- It eliminates subsidies to help Americans pay out-of-pocket costs incurred when they have purchased health insurance through the ACA marketplace “exchanges.” By 2026, the elimination of these cost-sharing subsidies will increase out-of-pocket costs by roughly $16 billion per year.
- It dismantles key regulations that govern the breadth of protections offered by insurance policies sold through the ACA exchanges. This will degrade the quality of insurance for all enrollees in nongroup (i.e., individual) markets, regardless of whether they receive subsidies for coverage. By 2026 this decrease in insurance plan quality will boost out-of-pocket costs by roughly $9 billion per year.
- It takes Medicaid coverage away from 14 million Americans in 2026. Because Medicaid recipients face extremely low out-of-pocket costs, this shift alone will boost out-of-pocket costs faced by patients in 2026 by roughly $7 billion.
- It moves 7 million Americans off of employer-sponsored insurance and into uninsured status. The primary damage done by this move will be to force these 7 million people to simply consume much less health care. But even with this reduction they will face roughly $460 million in higher out-of-pocket costs by 2026.