GOP wrestles with soaring deductibles in healthcare bill

Senate Republicans have run into another problem in passing their ObamaCare replacement bill: It could increase deductibles by thousands of dollars, potentially alienating moderates who are already skeptical of the bill. 

An analysis released Thursday by the nonpartisan Congressional Budget Office (CBO) concluded that a single policyholder purchasing a standard benchmark plan under the GOP bill could face a deductible of $13,000 in 2026.

Under current law, an individual making $56,800 would have a deductible of $5,000, while someone making $26,500 would have an $800 deductible.


A higher deductible is the tradeoff Republicans made when they decided that lowering premiums would be a top priority for their legislation; plans with lower premiums generally have higher deductibles.

“The way we come together, the way we bring together senators all across the ideological spectrum, is focusing on lowering premiums,” Sen. Ted CruzRafael (Ted) Edward CruzTrump's Texas endorsement boosts a scandal-plagued incumbent while imperiling a political dynasty Trio of Senate Republicans urges Supreme Court to overrule Roe v. Wade Overnight Defense: US launches another airstrike in Somalia | Amendment to expand Pentagon recusal period added to NDAA | No. 2 State Dept. official to lead nuclear talks with Russia MORE (R-Texas) said on Fox News on Friday.

“If we’re lowering premiums, that’s a win for everyone.”

Deductibles could become so high under the GOP plan, the CBO said, that many low-income people might decide not to purchase a health insurance plan, even if the premiums were low. 

That could be an issue for moderates who have worried about coverage losses, especially for those who gained coverage through ObamaCare’s Medicaid expansion. 

The Republican legislation ends the expansion by 2023, and those people will be eligible for tax credits to buy insurance under the GOP plan. 


Under the Senate bill, the tax credits for purchasing coverage are tied to ObamaCare's less generous "bronze" plans that have lower premiums and higher deductibles.

Another factor driving the higher deductibles under the Republican proposal, according to the CBO, is the elimination of ObamaCare insurer payments known as cost sharing reduction subsidies. These payments reimburse insurers for giving discounted deductibles to low-income people.

In an attempt to address the issue, the White House is trying to win over moderates by proposing to allow states to use some Medicaid funding to help low-income people pay for their deductibles.

Higher deductibles for low-income people are a concern, said Sen. Bill Cassidy (R-La.), but he hopes the new White House proposal will fix that. 

Senate Republican leaders are also considering offering $200 billion to states that expanded Medicaid, which would be funded by leaving in two of ObamaCare’s taxes on high earners. 

That money would come in addition to $132 billion the revised bill already sets aside for a long-term state innovation fund and $45 billion to treat opioid addiction.

“If there’s enough to make it real that someone who is lower-income can get the assistance they need to afford insurance, then that matters,” Cassidy told reporters Thursday. 

Sen. Mike Rounds (R-S.D.) said the purpose of leaving those taxes in was to “redistribute” that money to people facing higher costs under the bill.

“What we’re trying to do is allow more local control in some areas so individual states can do some things to help people based on what their needs are,” he said. 

“That’s why we kept some of that tax revenue in place. So we can redistribute some of that money to help them because they have no place else to go.” 

But some lawmakers question whether the additional funding would make a difference.

While the proposal would add $200 billion in funding, the legislation would cut $756 billion from Medicaid over the next decade, which includes the rollback of the expansion.


“As long as we are fundamentally changing Medicaid and taking some $700 billion out of the program, I do not see myself supporting a bill that does that,” Sen. Susan CollinsSusan Margaret CollinsOvernight Health Care: CDC advises vaccinated to wear masks in high-risk areas | Biden admin considering vaccine mandate for federal workers Eight Republicans join Democrats to confirm head of DOJ environmental division The Hill's Morning Report - Presented by Facebook - Crunch time for bipartisan plan; first Jan. 6 hearing today MORE (R-Maine) told reporters Thursday.

The CBO noted in its score that funding provided to states for stabilization would likely be used to reduce premiums, not deductibles, though the analysis did not include the additional $200 billion. 

“The CBO expects that most of these funds would be used to lower premiums. There’s not a lot of money left over for cost-sharing,” said Cynthia Cox, an insurance expert with the Kaiser Family Foundation.