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New CBPP Analysis On the Implications on Alaska - ACA Repeal Bill

Tax Credits in Alaska Would Be Cut by Over $10,200 On Average, Making Coverage Unaffordable for Many


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Anchorage, AK – Alaska will suffer the biggest cuts to tax credits of any state in the nation, under the repeal plan to the Affordable Care Act (ACA) being considered by House Committees this week, according to new estimates released today by the Washington, DC-­‐based Center on Budget and Policy Priorities (CBPP). Where tax credits would fall by an average of $1,700, or 36 percent, for marketplace consumers across all states, they would fall by an average of $10,243, or 78 percent, in Alaska.

 

That’s largely because the House plan’s tax credits, unlike those in the ACA, would not adjust for geographic variation in premiums. Under current law, a 45-year old with income of $22,000 could purchase benchmark health insurance coverage for $1,200 or less anywhere in the country. Under the House plan, he/ she would pay at least $11,800 to purchase comparable coverage in Alaska.

 

The reduction in tax credits would be even more severe for lower-income and older consumers. Older people would also be hit hard by a provision in the House bill that would let them be charged higher premiums, and lower-income people would lose help with deductibles, copays, and coinsurance.

 

“Alaska would be the hardest hit state in the nation under the House Republican health plan,” said Trevor Storrs. “Driving insurance costs so high that many Alaskans–especially low-income and older people-­could no longer afford it, as the House plan would do, is highly irresponsible. Not only would it put coverage and care out of reach for thousands of Alaskans, it could put our entire individual market for health insurance at risk.”

 

House Plan Could Destabilize, or Even Collapse, Individual Market

 

While challenges remain, the ACA’s premium tax credits have made 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 $11,595 per marketplace consumer on an annualized basis for 2017. And even before fully implementing Medicaid expansion, Alaska saw its uninsured rate fall sharply, from 18.9 percent in 2013 to 10.3 percent in mid-2015, reflecting the fact that low-­‐and moderate-­‐income Alaskans were finally able to purchase health insurance in the individual market.

 

President Trump has promised to replace the ACA with a plan that provides “good coverage at much less cost.” However, the House plan’s severe cuts to tax credits in Alaska would almost certainly result in large coverage losses. On top of that, they could plunge Alaska’s individual market into crisis. That’s because enrollment declines would lead to large increases in premiums, resulting in further enrollment declines and further premium increases. The feedback loop could continue until Alaska’s individual market shrank drastically, or could even cause it to collapse altogether.

 

House Plan Would End Medicaid As We Know It

 

The House Republican health plan would also effectively end Alaska’s Medicaid expansion under the ACA, under which thousands of Alaskans have gained coverage. It would also radically restructure Medicaid’s federal financing system and cut federal Medicaid funding for states over time. This would quickly squeeze the state budget, and lead to cuts in Medicaid coverage and services for seniors, people with disabilities, and families with children.

 

To read the Center on Budget and Policy Priorities’ full analysis of the impacts of the House Republican ACA repeal plan tax credits, please visit: http://bit.ly/2n9YmwF

 

For county-­‐specific data on the impacts of the House Republican ACA repeal plan tax credits, please visit: http://kaiserf.am/2lSCggd

 

To learn more about the impacts on states of the House Republican plan to radically overhaul Medicaid, please visit: http://bit.ly/2m0sTv4

 

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