CBO Scores Health Care Bill

March 15, 2017

On March 13, the Congressional Budget Office (CBO), along with the Joint Committee on Taxation, found that the Republican health care replacement bill—the American Health Care Act—would reduce the federal deficit by $337 billion over ten years. Overall, the bill would reduce federal spending by $1.2 trillion, largely due to cuts in Medicaid and the Affordable Care Act’s (ACA’s) subsidies. Revenue to the government would fall by $883 billion, due to the repeal of ACA taxes.

The CBO is projecting that under the House repeal and replace plan, the number of uninsured people would grow by 14 million in 2018, with that number rising to 24 million in a decade. Further, five million fewer people would be covered under Medicaid by 2018, and 14 million fewer people would enroll in the program by 2026.

Meanwhile, six million fewer Americans would be covered in the individual market by 2018, but by 2026, only two million fewer people are expected to be covered. That is in part because fewer employers would offer insurance to their workers, driving more people to the individual market. Thus, in total, an estimated 52 million people would be uninsured by 2026 under the Republican plan, compared to 28 million who would lack insurance under the current ACA.

While premiums would fall 10 percent overall by 2026, CBO found, they would increase by an average of 20 to 25 percent for a 64 year-old. Premiums after financial assistance for a 64 year-old making $26,500 would increase from $1,700 to a whopping $14,600 under the Republican bill, the report said.

The report finds that people’s out of pocket costs, including deductibles, “would tend to be higher” under the Republican plan than under the current ACA. The CBO finds that the higher deductibles under the Republican system would come in large part because the bill would loosen restrictions on insurers, allowing them to sell only cheaper, less generous plans if they wanted to, rather than a range of plans.

Another key point is that the Republican bill repeals ACA’s financial assistance, known as cost-sharing reductions, that helps low-income people afford deductibles, thereby “significantly increasing out-of-pocket costs for non-group insurance for many lower-income enrollees.”

You can read the full CBO report by clicking here.

The Trump administration immediately downplayed the report’s findings. “We disagree strenuously with the report that was put out,” Health and Human Services Secretary Tom Price said soon after the release of the report.

Price argued the CBO ignored regulatory changes and grants to states the administration believes will lead to an expansion of health care coverage, although those plans have not been released. Democrats immediately discredited the bill based off the report’s findings.

Meanwhile, many Senate Republicans were already voicing skepticism of the House bill before the CBO score was released. They are urging their colleagues to slow down on the legislation.

The House Budget Committee is set to hold a final markup of the legislation on March 16, setting the stage for a floor vote next week that could turn into a cliffhanger.