A new analysis of the Obamacare repeal and replace proposal being considered in the U.S. House of Representatives this week by the Washington, DC-based Center on Budget and Policy Priorities says Alaskans would see their healthcare tax credits cut by almost twice as much as any other state.
Center on Budget and Policy Priorities: “The House Republican health plan would give consumers in the health insurance marketplace nationally an average of $1,700 less help with premiums in 2020, compared to the ACA’s premium tax credits, according to the Kaiser Family Foundation. The losses would be larger for older and lower-income consumers, and lower-income consumers would also lose help with deductibles and other out-of-pocket costs. Consumers’ costs would probably increase even more than tax credits would fall, since the House plan would likely cause individual market premiums to rise.”
“The impact would be even more severe for people in high-cost states. Consumers in 11 high-cost states would see their tax credits to purchase health coverage fall by more than $3,000 on average — or more than 50 percent. That’s because unlike the ACA’s tax credits, the House plan’s tax credits wouldn’t adjust for geographic variation in insurance premiums; they’d be the same for a 45-year-old consumer in Alaska, where benchmark health insurance coverage costs $12,600 this year on average, as in New Hampshire, where it costs $3,600.”
The report goes on to specifically cite Alaska as a state particularly vulnerable to changes made in the GOP plan.
Alaska’s Individual Market Is Especially At Risk
Since long before the ACA, Alaska’s health insurance market has faced very serious challenges. Due in part to low population density and high provider and insurer concentration, Alaska has consistently had some of the highest premiums in the nation for employer-sponsored, as well as individual-market, health insurance.
While structural challenges in insurance markets remain, the share of Alaskans without health insurance has fallen sharply under the ACA. One important reason is that the ACA’s premium tax credits adjust for local costs, making health insurance affordable to thousands of Alaskans for the first time. Because of its unusually high premiums, Alaska receives by far the highest per-person premium tax credits in the country, averaging $11,600 per marketplace consumer on an annualized basis for 2017, compared to an average of $4,600 across all HealthCare.gov states.c Even before fully implementing the Medicaid expansion, Alaska saw its adult uninsured rate fall sharply, reflecting the fact that low- and moderate-income Alaskans were finally able to purchase health insurance in the individual market.d
The House plan would almost certainly reverse most or all of these gains, and it could plunge Alaska’s individual market into an even more severe crisis. Where tax credits would fall by an average of $2,100 or 41 percent for marketplace consumers across all HealthCare.gov states, they would fall by an average of $10,200 or 78 percent in Alaska.
For Alaska, therefore, the consequences of the House plan would be similar to the consequences of the 2015 ACA repeal bill vetoed by President Obama. CBO estimated that bill, which completely eliminated tax credits to help purchase health insurance, would have caused most states’ individual markets to collapse — almost certainly including Alaska’s.
You can read the full report and state impact analysis here.