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WATCH: Health Care Expert Estimates GOP Health Care Tax Credits Could Mean $50,000 Deductible

Jan 25, 2017
At Budget Committee Hearing on ACA, Witness Says a Tom Price-style tax credit could mean deductibles of $25,000 for individuals and $50,000 for families

Washington, DC – During yesterday’s Budget Committee hearing on the Affordable Care Act, a health care expert estimated that if the GOP were to replace the ACA coverage expansion with tax credits at the inadequate levels pushed by HHS nominee Tom Price, health care deductibles could skyrocket to $25,000 for individual and $50,000 for family plans with premiums that match the tax credit.

Under questioning from Ranking Member John Yarmuth, Dr. Linda Blumberg, a senior fellow at the Urban Institute’s Health Policy Center, explained that under estimates she developed based on the tax credit amounts specified in Price’s bill, in order for everyone to be able to buy a plan that costs no more than their tax credit, deductibles would rise while covered services would decrease—including access to non-generic drugs such as chemotherapy drugs and insulin, outpatient mental health and substance abuse, and physical therapy.

Watch the exchange, and find a transcript below:

Rep. Yarmuth: Several of the replacement plans that we’ve heard about, Dr. Price’s and several others, seem to be at least focused on certain common elements, and one of them is a tax credit…so you can go out and buy insurance. In Dr. Price’s plan, for instance, it provides tax credits that vary only by age, and it goes from $900 to $3,000 per person. Do you have any idea what kind of coverage in today’s market you can buy for $900 to $3,000 a person?
 
Dr. Blumberg: We have recently done some estimates. What the goal was  to construct a package. We assumed 5-to-1 age rating, as many of those looking for replacements are leaning that direction with the age rating. We tried to construct a package that would allow an individual of any age, so any adult from 18 to 64, to buy a particular package with the tax credit that was offered under the Price plan by the different age categories. The most generous plan that we were able to construct that brought in everybody of those ages with that amount of money was a plan that would require the individual to spend the first $25,000 in health expenses, so a $25,000 deductible for a single, $50,000 for a family. We found that we had to take out coverage for drugs that were not generic, so only generics covered; so that excludes chemotherapy drugs, it excludes insulin – those are not generics – a number of other expensive drugs for chronic illnesses. We had to exclude coverage for outpatient mental health and substance use disorder treatment. We had to exclude physical therapy, occupational therapy, speech therapy, and rehabilitation care. Now you could structure this somewhat differently, but you are bound and constrained by the math. So you could provide some coverage up front and then far less at the back end; you could fiddle a little bit with which of the benefits that we included or excluded, but you are quite constrained by the amount of money.
 
Rep. Yarmuth: So let me get you to repeat that. We’re talking about $25,000 per insured in deductibles, $50,000 per family, and elimination of substantial amount of the coverage that a policy under the Affordable Care Act would provide.
 
Dr. Blumberg: That’s correct.