Assessment of Affordability Provisions in the Exchange in House (H.R. 3962) and Senate (H.R. 3590) Health Reform Bills

In the tables below, the maximum and average costs projected for families (a family of three) and individuals IN THE EXCHANGE are displayed by income level. These figures use the current average cost of individual and family coverage to illustrate the differences between the House and Senate bills. The percentage of income required (or premium cap %) is the figure for the first year. In subsequent years, the premium cap percentages are adjusted under each bill.

Through the exchange -

• Upper middle income families in the exchange do better under the Senate bill.
• Families earning 255 - 400 percent of federal poverty level (FPL) ($41,000 to $73,000) do better in the exchange under the Senate bill in regard to maximum premium and out-of-pocket costs than under the House bill.
• Families earning 315 - 400 percent of FPL ($57,000 to $73,000) do better in the exchange under the Senate bill in regard to average premium and out-of-pocket costs than under the House bill.
• Low and moderate income families do much better under the House bill.
• Families will be liable for a higher maximum premium and out-of-pocket costs and higher average premium and out-of-pocket costs under the Senate bill than the House bill.
• For example, a family earning 225 percent of the poverty level ($41,000 per year for a family of three) will pay an average of $2,175 more per year in premium and out-of-pocket costs under the Senate bill than the House bill.
• A family earning 225 percent of FPL will be liable for as much as $8,956 in total (maximum) costs under the Senate bill, representing 21.7% of the family's total income, a figure $2,175 more than the House bill.
• The greater affordability under the House bill for low and moderate income families is a result of three primary factors:
• Premium caps are lower.
• Benefit package covers a greater share of health care costs (i.e., higher "actuarial value").
• Caps on out-of-pocket costs are lower.

Outside the exchange -

• There are a number of other affordability-related issues in which the House bill is stronger than the Senate bill. The House bill contains:
• Employer responsibility provisions that advance affordability through the workplace.
• Broader Medicaid expansion and $57 billion invested into Medicaid to improve primary care provider rates (bring up to Medicare rates).
• No inclusion of Section 1937 as the required benefit package for the newly Medicaid eligible populations (allows states to provide a narrower benefit package for this population).
• No excise tax on higher cost plans which will lead to higher health insurance premiums and health care costs and/or higher taxes for plan enrollees.
• Minimum value of health insurance plan under House bill covers 70 percent of average health care costs, versus 60 percent in Senate bill.

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