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HHS Highlights Lower Deductibles as Republicans Blast High Premiums

By Erin Mershon, CQ Roll Call

July 12, 2016 -- The Obama administration touted new data Tuesday showing that for consumers, median deductible costs fell by about $50 per person from 2015 to 2016. The administration hopes the data will counter an ongoing narrative from Republicans and some customers that marketplace plans are increasingly costly.

House Republicans highlighted rising premiums for the plans in a Tuesday hearing at the Ways and Means Committee and are expected to emphasize the point again at a House Oversight Committee meeting Wednesday.

The affordability of health insurance offered on the exchanges will be a key test of the success of the 2010 health care law. The law expanded access to insurance for about 20 million people, according to administration estimates.

"This comprehensive analysis makes clear that two key misconceptions about marketplace coverage are fundamentally incorrect: first, that people have deductibles of several thousand dollars, and [that marketplace policies don't give people access to care comparable to other insurance," said Christen Linke Young, principal deputy director for the Center for Consumer Information and Insurance Oversight at the Centers for Medicare and Medicaid Services, pointing to services available before the deductible.

The new statistics show that the median individual deductible for plans is $850, down from $900 last year. The administration also highlighted that the plans cover an average of seven services before consumers have to pay the deductible. About a third of enrollees have deductibles of $250 or less, the administration said. Most people who have purchased exchange coverage have incomes below about $60,000.

The figures run counter to reports and headlines focused on skyrocketing deductibles and high out-of-pocket costs. The Obama administration attributes those differences to two factors. First, consumers often choose silver plans, which have slightly higher premiums but lower deductibles than the bronze plans offered on the exchanges. Additionally, deductibles and other out-of-pocket costs for many consumers are subsidized by the law's so-called cost-sharing subsidies, which the administration took into account in the analysis.

Those subsidies are at the center of a lawsuit from House Republicans, who allege that the Obama administration illegally funded the program without an appropriation from Congress. A federal judge ruled for the Republicans earlier this year, effectively striking funds for the program, but the Obama administration appealed that decision.

Still, the administration's report is unlikely to quiet Republicans, who used the Tuesday hearing to blast rising premiums for 2017, which they say could be twice as high as this year's increases. Ways and Means Chairman Kevin Brady, R-Texas, singled out several increases that could top 50 percent.

"The law has been one broken promise after another—starting with the promise in its very title: 'Affordable,'" Brady said. "Millions of Americans have seen the cost of health care increase to astonishing levels while quality, choice, and access have hit new lows.

Nearly every Republican on the committee expressed their concern for constituents in their states who faced especially high costs or lost coverage, or highlighted the lack of competition in the market. Many attacked the costs as untenable.

Democrats blasted their counterparts for using the hearing as fodder for campaign ads and practice for the upcoming Republican convention.

"Essentially what we've heard is the campaign message of the Republican party against the ACA. That's the purpose of this hearing today—essentially bringing the campaign attack of the Republican party within the halls of Congress," ranking member Sander M. Levin, D-Mich., said.

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