The Wall Street Journal
June 27, 2017
The nonpartisan Congressional Budget Office has released its much-anticipated analysis of the Senate’s bill repealing and replacing large swaths of the Affordable Care Act. The estimate of the bill’s effects on federal spending and the number of uninsured, called a “score,” is required before lawmakers can bring up the legislation for a vote. Here are five of the CBO’s top-line findings:
1. 22 million more people would be uninsured.
The Senate bill’s changes to Medicaid, insurance subsidies and some insurance regulations would swell the ranks of the uninsured by about 22 million, compared with the Affordable Care Act. That largely is due to sizable cuts made to the Medicaid program and substantially lower subsidies to help low-income people purchase insurance.
That coverage estimate clocks in at slightly less than the 23 million people that CBO projected would lose coverage under the House’s version of the bill. Even so, it represents a much smaller improvement than lawmakers would have hoped and could complicate the political calculations of some centrist-leaning Republican senators, who balked at similar coverage losses in the House’s version.
2. The government saves $321 billion.
The Senate bill would save the federal government $321 billion over the next decade. That is about $202 billion more than the House-passed bill would have saved. The difference is in part thanks to the way the Senate bill repeals the ACA’s taxes, which restricts when people can deduct medical costs.
Because of the complex budget rules Congress is using to pass their repeal bill, the Senate’s version can save no less than the $119 billion in deficit reduction contained in the House bill. Still, the $202 billion leaves Senate leaders some wiggle room to add spending back into the bill, a tool that analysts expect they will use to win the support of wavering lawmakers. Leaders are expected, for example, to add money to the $2 billion the bill would spend on opioid treatment.
3. Premiums drop but deductibles and other out-of-pocket costs rise.
Under the Senate’s legislation, premiums would rise slightly in the first two years after the bill’s passage, because fewer people would be induced to purchase coverage without a mandate. But they would steadily begin to fall starting in 2020 onward. CBO attributes the eventual drop in premiums in part to federal assistance and to the bill’s loosening of insurance regulations that could result in health plans that cover fewer medical benefits and a smaller overall portion of a person’s health spending.
At the same time, deductibles for low-income people could balloon under the Senate plan, because beginning in 2020 the bill stops funding “cost-sharing” subsidies that lowered out-of-pocket costs for people making up to 250% of the federal poverty line. And some people with costly pre-existing conditions whose plans would no longer be required to cover certain medical benefits could pay much more for their coverage or forego insurance entirely.
4. 15 million people could lose Medicaid coverage.
The bill’s repeal of the Medicaid expansion and change to the program’s overall funding structure would result in $772 billion in savings over the next decade. CBO estimates that the cuts would result in 15 million people losing Medicaid coverage—slightly more than the number of people who gained it under the ACA’s expansion of the joint federal-state health program.
But the number of people losing coverage would likely increase after 2026, the final year included in CBO’s projection. That is because near the end of that window, the Medicaid cuts would begin to accelerate.
5. A stable market
Overall, CBO predicts the individual market would remain stable if the Senate bill were enacted, despite some uncertainty for insurance companies around the end of the ACA’s penalty for people who don’t purchase health insurance.
The report attributes the stability to lower insurance costs, which paired with the bill’s subsidies would entice a sufficient number of young, healthy people to buy insurance. Additional funding for insurers to cover out-of-pocket costs of low-income people and separate funding to help defray the costs of the most expensive customers would also encourage insurers to remain in the market, the report said.
But the legislation could cause insurers to pull out of some sparsely-populated areas of the country, because the smaller subsidies would lead to fewer people to buy insurance, making those markets less attractive.
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