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Avalere Analysis: ‘Copper Plan’ Alternative Would Lower Premiums 18%

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In an analysis funded by the Council for Affordable Health Coverage, Avalere Health estimated the cost savings resulting from a new, less-expensive tier of insurance coverage, if legislation were to permit it.

Currently, the ACA requires all health plans offered in the individual and small group markets to meet standards for bronze (60% AV), silver (70%), gold (80%) or platinum (90%) coverage.

Avalere’s analysis, using similar methods to those used by the Congressional Budget Office, showed that by offering a ‘copper’ plan (50% AV), it could lower Federal spending by $5.8 billion over 10 years; reduce taxes by $5.5 billion over the same period; cut the Federal deficit by $0.3 billion; and reduce premiums by 18 percent from the average Bronze plan premium in 2016. The lower premium would result in a slight increase in estimated enrollment in the new marketplace. Previous Avalere research showed that lower actuarial value products are typically associated with higher copayments and deductibles borne by consumers.

The Council for Affordable Health Coverage requested Avalere estimate the impact on the federal deficit of a legislative proposal that would allow a new type of plan tier for consumers in the new health insurance marketplace, as well as small employers. As originally passed in the Affordable Care Act, commercial health insurance plans in the individual and small group markets must cover at least 60 percent of the estimated health costs of enrollees starting in 2014.

View Avalere’s full analysis attached.

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