How ACA and AHCA Net Premiums after Federal Tax Credits Differ within States and between Them

Click on or select a state to access a fact sheet exploring the coverage implications for your state.

 

On May 4, 2017, the House of Representatives passed the American Health Care Act (AHCA). If signed into law, this bill would repeal substantial components of the Affordable Care Act (ACA) and fundamentally alter federal financing of Medicaid, federal financial assistance for the purchase of private nongroup health insurance, and the regulation of health insurance. The AHCA would replace the ACA’s premium tax credits tied to income and the price of available policies with an age-based tax credit available to all people up to a high income level. The Senate is developing its own version of the bill, with the age-based tax credits expected to remain in some form.

We compare the net premiums, after federal tax credits, an example consumer would face under the ACA and the AHCA in 2020. Our example person is a single 50-year-old nonsmoker with $31,000 in income (250 percent of the federal poverty level in 2020). By presenting data for each of the 499 premium rating areas across the country, we highlight that the implications of the AHCA vary by geographic area—not just across states but within states. In general, the difference between net premiums under the ACA and the AHCA vary by someone’s age, his or her income, and the full price of obtaining insurance coverage. After–tax credit premiums tend to be lower under the ACA except for young people in low-premium areas and people with higher incomes. 

Each fact sheet has a chart that compares net, after–tax credit premiums for our example person in each of that state’s premium rating areas. If a state has a large number of rating areas, two or three charts are provided. A table lists which counties are included in each state rating area. In addition to the fact sheets, we have an Excel spreadsheet that contains the net premiums paid under the ACA and AHCA for each of the 499 rating areas.

These estimates supplement a previous analysis, Premium Tax Credits Tied to Age Versus Income and Available Premiums: Differences by Age, Income, and GeographyWe use the same data and methods here, except we inflate the 2017 marketplace benchmark (second-lowest-cost silver) premiums to 2020, assuming 5 percent annual average growth. We also adjust the ACA percent of income premium caps to 2020. To compute the net, after–tax credit premium for each rating area in 2020, we assume our sample consumer buys the second-lowest-cost silver plan available under either the ACA or the AHCA. Premiums could be lower under the AHCA as a result of fewer benefit and cost-sharing standards, but consumer out-of-pocket costs would be higher and would have to be taken into account for a fair comparison; we do not do that here. Premiums under the AHCA are set based on a 5 to 1 age-rating curve from oldest adult to youngest, as specified in the bill, while premiums under the ACA are set based on its 3 to 1 age-rating curve. The District of Columbia, Massachusetts, New Jersey, New York, and Vermont have created their own age-rating curves under the ACA that are narrower than 3 to 1; we assume these states maintain these curves under the AHCA, at least in the near term.