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Premiums and Tax Credits under the Affordable Care Act vs. the Senate Better Care Reconciliation Act: Interactive Maps

This map compares county-level projections of premiums and tax credits for marketplace enrollees under the Affordable Care Act (ACA) in 2020 with estimates for the Better Care Reconciliation Act (BCRA) as unveiled July 20 by Senate Republicans. Our maps comparing premiums and tax credits under the ACA and the American Health Care Act (AHCA) passed through the House are here.

This map includes premium and tax credit estimates by county for current ACA marketplace enrollees at age 27, 40, or 60 with an annual income of $20,000, $30,000, $40,000, $50,000, $60,000, $75,000, $100,000, or 351% of the federal poverty level (which is just above the cutoff for tax credits under the BCRA). The map includes estimates for premiums, tax credits, and premiums after tax credits for bronze and silver plans in each county in 2020.

Most current Healthcare.gov enrollees have lower incomes:
  • About 66% of enrollees have incomes at or below 250% of poverty (approximately $31,250 for a single individual in 2020), with the bulk (44% of all enrollees) having incomes at or below 150% of poverty (approximately $18,750 in 2020).
  • About 36% of enrollees are under age 35, 37% are age 35 to 54, and 27% are 55 or older.

Both the ACA and the BCRA include tax credits that take into account family income, local cost of insurance, and age. Eligible enrollees are expected to pay a certain percentage of income towards the cost of a benchmark plan, with tax credits covering the remainder of the premium. The premium caps as a percentage of income grow over time.

Under the ACA, people with incomes from 100% to 400% of the poverty level are eligible for tax credits. Premium caps in 2020 will vary from 2.14% of income for a household at the poverty level to 10.2% at 400% of poverty ($50,000), according to Kaiser projections. The caps do not vary by age. The benchmark plan under the ACA is a silver plan with an actuarial value of 70%, meaning enrollees pay for an average of 30% of their health care expenses through cost-sharing.

Under the BCRA, people with incomes up to 350% of the poverty level are eligible for tax credits (including people with incomes below poverty). Under the BCRA, premium caps vary by age and will range in 2020 from 2.14% of income for a household below the poverty level (<$12,500 in 2020), to 17.4% of income for a 60 year old at 350% of poverty ($43,750). The benchmark plan under the Senate bill is a plan with an actuarial value of 58%, meaning enrollees pay for an average of 42% of their health care expenses through cost-sharing. The BCRA also allows people to pay premiums in the individual market (after taking tax credits into account) out of Health Savings Accounts (HSAs). Our examples include the benefits from using HSAs to pay premiums.

Note: the map does not include cost-sharing assistance under the ACA that lowers deductibles and copayments for low-income marketplace enrollees. For example, in 2017, people making between 100 – 150% of poverty enrolled in a silver plan on healthcare.gov had an average deductible of $255; those with incomes between 150 – 200% of poverty had an average deductible of $809; and those with incomes between 200 – 250% of poverty had deductibles averaging $2,904. In 2017, the average deductible for a silver plan was $3,609 and $6,105 for a bronze plan.

Our method of estimating premiums before tax credits under the BCRA is based on Congressional Budget Office (CBO) projections for the BCRA. We use CBO’s illustrative premiums under the ACA and the replacement plans, which suggest that the premiums for a 40-year-old under the BCRA would be somewhat lower (5.4%) than the premium for the same coverage under the ACA, before accounting for tax credits. To arrive at the 60-year-old and 27-year-old premium under the BCRA, we use a 5:1 age curve, since the BCRA would change age rating from 3:1 to 5:1. We assume that states that have set their own age curves with ratios smaller than 3:1 (i.e. New York, Vermont, Massachusetts, and the District of Columbia) would maintain their state-specific age curves under the BCRA. We use the projected premium for the lowest cost bronze plan in each county as an equivalent for the BCRA benchmark plan to calculate tax credits under the BCRA. The benefits from using HSAs to pay premiums are based on marginal tax rates calculated with Taxsim from the National Bureau of Economic Research. Income amounts are assumed to be modified adjusted gross income. The BCRA makes it easier for states to waive certain provisions of the law, including the essential benefits insurers are required to cover. Such waivers would tend to lower premiums but increase out-of-pocket costs for health care. Our analysis is based on states not seeking waivers.

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Filling the need for trusted information on national health issues, the Kaiser Family Foundation is a nonprofit organization based in Menlo Park, California.