Here’s How Much More Individual Health Insurance Would Cost if the Senate Bill Passes

Jun 27, 2017

Early retirement would get more expensive for many older adults if the Senate health care bill becomes law, according to projections released Monday by the nonpartisan Congressional Budget Office.

The Senate's proposed replacement for the Affordable Care Act lowers the income threshold for premiums subsidies, and 64-year-olds who make just above the new cut-off would face premium hikes of about 200% in 2026 for a silver plan, according to CBO projections. This group isn't yet eligible for Medicare, the federal insurance program that covers people ages 65 and up, and they may want to hang onto their jobs and employer-provided coverage rather than pay so much for individual coverage as a bridge to Medicare.

Meanwhile, premiums for 40-year-olds in the same income bracket would stay roughly the same and those for 21-year-olds would decrease by about 20%, according to estimates.

Overall, the CBO projects that 22 million people would lose health coverage by 2026 under the Senate's health care bill, named the Better Care Reconciliation Act, versus the current law. While Senate Majority Leader Mitch McConnell has said he wants to bring the legislation before the full Senate for a vote this week, the bill still faces challenges from both moderate and conservative Republicans.

Unlike the House's version of the bill, which switched to a flat, age-based premium subsidy, the Senate's version sticks closer to current law with subsidies based on income, age and geography. But a big change in the Senate version is that the bill would lower the income threshold to qualify for premiums subsidies to 350% of the poverty level from 400%. Currently, individuals making up to about $48,000 in 2017 qualify for government assistance paying their premiums, but under the Senate bill that would fall to about $42,000.

Charles Gaba, who runs ACAsignups.net, estimates that around 400,000 consumers who currently receive subsidies fall between 351% and 400% of the federal poverty level. Consumers ages 55 to 64 make up about 27% of overall enrollees on the ACA marketplaces, so by one rough estimate about 108,000 older marketplace consumers would see 200% premium hikes; lower-income older adults would face increases of closer to 300%.

Another big change in the Senate bill is the benchmark plan used in subsidy calculations would cover a smaller amount of people's total medical costs — 58% versus 70% under current law. With the subsidy pegged to a bronze-level plan rather than a silver one, subsidies aren't going to buy as much coverage as they used to. That means those who choose a more comprehensive plan would have to pay more out of their own pockets for it.

Here's what net annual silver plan premiums would look like on the individual market in 2026 under the Better Care Reconciliation Act, versus under current law, for various ages and incomes, according to the CBO. If you'd like to tell your Senators how you feel about all this, here's how to contact them.

64-year-old with annual income of $26,500: $1,700 under current law, versus $6,500 under BCRA

64-year-old with annual income of $56,800: $6,800 under current law, versus $20,500 under BCRA

64-year-old with annual income of $68,200: $15,300 under current law, versus $20,500 under BCRA

40-year-old with annual income of $26,500: $1,700 under current law, versus $3,000 under BCRA

40-year-old with annual income of $56,800: $6,500 under current law, versus $6,400 under BCRA

40-year-old with annual income of $68,200: $6,500 under current law, versus $6,400 under BCRA

21-year-old with annual income of $26,500 (175% of poverty): $1,700 under current law, versus $2,200 under BCRA

21-year-old with annual income of $56,800 (375% of poverty): $5,100 under current law, versus $4,100 under BCRA.

21-year-old with annual income of $68,200 (450% of poverty): $5,100 under current law, versus $4,100 under BCRA

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