Finance

Here’s what the Senate healthcare bill means for all types of Americans

  • Effect on costs: For middle-income people who access coverage through the individual market, the Senate bill would have tax subsidies similar to Obamacare based on income. One proposed change: The cutoff for subsidies would drop from 400% of the poverty line to 350% of the poverty line. So the highest income a person could make and qualify for assistance is $52,710 for an individual (down from $62,240) and $107,625 for a family of four (down from $123,000). More people would be left out from getting help paying for premiums.

    The subsidies also make it so a person cannot pay more than a certain percentage of their income on premiums. Under the Senate bill, the percentage would increase with age. For instance, a 33-year-old person who makes $50,000 annually, or 332% of the poverty line, would pay up to 8.9% of their income on premiums, or $4,450 a year. For a person age 61, that increases to 16.2% of their income, or $8,100 a year.

    Additionally, the benchmark plan for Obamacarehas an actuarial value — in essence, the percentage of all costs covered — of 70%. Under the Senate bill, the value would drop to 58%. In practice, that would mean many plans would have higher deductibles and out-of-pocket costs.

    The bill also would repeal the mandate that employers provide coverage, so more people (in any income bracket) could also end up in that boat.

    Bottom line: People receiving subsidies would likely end up paying more, and fewer middle-income Americans would receive assistance with premiums.

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