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to be a really hot topic
going forward.

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Sommerhauser, thanks very
much.

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>> The whole government
shutdown was over extending

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enhanced tax credits for
Affordable Care Act

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policies, with Democrats
warning of big increases in

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people's monthly premiums
come January if they're not

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kept in place. Aside from
those extra subsidies going

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away, why are marketplace
plans proving more

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expensive? And what of
Republican calls to do away

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with the ACA altogether? In
response, we asked

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Wisconsin School of
and Insurance Justin Sydnor.

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And thanks very much for
being here.

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>> Thanks for having me.
>> So is it in dispute that

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ACA premiums could more
than double without the

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extension of the enhanced
tax credits?

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>> No.
uncertainty about that. You

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know, it's basically pretty
straightforward, simple

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math. The way the tax
credits work is that

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they're tied to a share of
the percent of your income.

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And the enhanced tax
credits increased or

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decreased the share you
would have to pay an

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increase the income range
for people who are eligible.

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So they'll definitely go up.
The share that you're

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up. If those subsidies
expire. How much? Depends a

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lot on your income level.
And in particular, we could

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maybe think about a nice
example here. So take a 50

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year old couple so married
couple in Wisconsin, 50

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years old, no children.
They're facing a total

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premium of about $18,000
for a middle middle plan

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this year in the ACA
marketplace in Wisconsin.

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If they had the enhanced
tax credits and they made

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$85,000 or more a year,
that's 400% of the federal

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poverty line. They'd get
about $11,000 subsidy, and

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they'd have to pay about
$7,000 themselves. So if

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those subsidies expire,
they're on the hook for

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that whole 18,000. So
that's an $11,000 increase

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now for people who have
lower incomes, the

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subsidies protect them more,
even if the enhanced

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subsidies expire. So let's
take that same family and

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move them way down the
income spectrum. Make them

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at 25,000. Now they're just
above the poverty line in

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the enhanced subsidies.
They don't pay anything for

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that middle tier plan.
They're paying zero. But

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without them they're paying
about $500 a year. So about

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a $500 increase. So that
range, you know, in the

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ballpark some it's 500 a
year, some people it's

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$10,000 or more a year.
>> You know, there's so

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much political
consternation around not

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just the tax credits but
the ACA altogether is the

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Affordable Care Act in a
freefall?

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>> No, I don't think
there's any reason to think

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of it as being in a
freefall. It's actually

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been quite stable. So if
you look at the cost of

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plans for ACA marketplace
plans, both in Wisconsin

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but also nationally over
the last five years or so,

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those premiums have
actually been very stable.

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And in fact, they haven't
risen in the same way that

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the employer sponsored
premiums that we've seen

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for, you know, that most
people get through their

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employers have those
premiums have been up about

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25% over the last five
years. ACA premiums are

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pretty stable.
>> What's driving that 25%

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increase?
overall in the US our

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healthcare costs are just
high. So we pay about

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$15,000 a person per year
in health care costs across

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the entire country. You
know. And those costs

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reflect a lot of things.
They reflect our market

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based system. So our costs
are about twice what they

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are in, say, Europe or
Canada. And, you know,

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that's partly a trade off.
We have a market based

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system. So we have a lot of
innovation. We have good

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access, we have the best
technology. So if you get

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very sick, you probably
want to be here. On the

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other hand, it means that
our prices are set by

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competitive forces and the
down prices that well

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through those competitive
about why are they

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increasing, why are they
steady rise over time. You

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know there's a confluence
of factors. So we have an

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aging population. So we
have sort of more demand

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for health care and the
expansion of health care

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services. How many nurses
you can bring on, how many

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doctors you train. Hospital
systems doesn't always keep

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up with that rising demand.
Well, we've also seen a big

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explosion of newer
pharmaceutical drugs. You

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know, innovations in
genetics have allowed us to

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treat rare diseases. Those
Now, of course, they're

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also highly beneficial. If
you have a rare disease,

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you're really happy that
there's a new drug for it.

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But that's been a big part
of the cost. And then

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there's also just overall
inflation. So there's been

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inflation in all parts of
the economy. And that also

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hits the health care prices.
>> So I wanted to ask you I

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know that President Trump
and members of the GOP talk

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about giving people direct
payments like $2,000 or

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something to to pay for
their health care and a

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health savings account or
something like that. What

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do you think of that?
>> Well.

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>> So, you know, it's hard
to react too much. So, you

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know, the details and
specifics really matter in

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health care. And so far the
proposals haven't been very

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detailed. But if you
instead gave people direct

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money that could be spent
on anything health care

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premiums or out-of-pocket
costs, you expose them to

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some more risk. If those
subsidies don't keep up

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with the rising costs of
health care, well, they're

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going to see that. On the
other hand, you create more

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competitive pressure and
competitive pressure and