If the GOP plan becomes law, millions more would lose insurance by 2020 as federal insurance subsidies decline and the support for Medicaid expansion diminishes, the report says. By 2026, roughly one-sixth of the American population could be without coverage.
“In 2026, an estimated 52 million people would be uninsured, compared with the 28 million who would lack insurance that year under current law,” the CBO says.
The report on the American Health Care Act comes amid intense pushback from Democrats, health care groups and some Republicans.
The bill’s biggest boosters had looked to pre-empt the anticipated CBO critique.
“If you’re looking to the CBO for accuracy, you’re looking in the wrong place,” said White House press secretary Sean Spicer last week. House Speaker Paul Ryan, an architect of the bill, contended in a radio interview Friday that “we always know you’re never going to win a coverage beauty contest when it’s free market versus government mandates.”
The CBO remains widely respected throughout Washington. Its director, Keith Hall, was appointed by congressional Republicans.
Hoping to avoid a prolonged pageant, House Republican leaders pushed the bill through the Ways and Means and the Energy and Commerce committees on party-line votes late last week. The bill must now pass out of both the House Budget and Rules committees before it receives a chamberwide vote. If passed, it will move to the Senate.
The CBO report did contain some good news for Republicans. By paring down subsidies for health insurance costs and reducing Medicaid payments, the plan would lower the federal deficit $337 billion over the next 10 years. The largest savings come from cutting federal Medicaid payments beginning in 2020.
The Republican plan would cut the deficit $935 billion if not for the roughly $599 billion in costs the bill would create, mostly through lost tax revenue.
The GOP plan repeals various taxes set forth in the Affordable Care Act, also known as Obamacare. Those include a payroll tax on high-income earners, a tax on investment income, and various fees on health insurance companies.
In addition, the Republican bill would eliminate an Obama-era cap on tax deductions allowed by health insurance executives. According to the left-leaning Center for American Progress, this tax change would save the top five insurance companies a combined $63 million next year.
In the short term, premiums for individuals could jump as much as 20 percent under the American Health Care Act. Because the bill eliminates penalties for those who choose not to purchase insurance, hordes of younger, healthier people could abandon their coverage. Under current law, insurance plans purchased by healthy people effectively subsidize older people who require greater care.
After 2020, premiums are expected to decrease in price due to a number of factors, including that enrollment by younger people would tick back up. The GOP bill would allocate $100 billion over 10 years into a flexible fund that would allow states to limit premium costs by methods such as tax credits to consumers or direct payments to insurers with costly patient pools.
Premiums are also expected to drop in the GOP bill as health care regulations are scaled back.
While the ACA mandated that health plans for the elderly could cost no more than three times the price of plans offered to young people, the Republican plan scraps this requirement. It sets looser restrictions, allowing insurance companies to charge elderly citizens up to five times the price of plans available to their younger counterparts.
Obamacare created income-based subsidies that took into account the local cost of insurance in every state and at every age. The Republican plan offers consumers tax credits instead of subsidies, which are less generous and are calculated based on age. The credits would increase based on inflation.
By reformulating how subsidies are offered, the CBO estimates the effects of the Republican plan as “substantially reducing premiums for young adults and substantially raising premiums for older people.”
The legislation has been panned by some of the most powerful groups in Washington, from the AARP to the American Medical Association.
Congressional Democrats are united in their opposition to the bill, and some moderate Republicans are worried the legislation could take away crucial health benefits for their constituents.
Republican Sens. Rob Portman, of Ohio, Shelley Moore Capito, of West Virginia, Cory Gardner, of Colorado, and Lisa Murkowski, of Alaska, all represent states that took part in the Medicaid expansion. Last week they wrote to Senate Majority Leader Mitch McConnell calling for Medicaid funding to be preserved.
“We believe Medicaid needs to be reformed, but reform should not come at the cost of disruption in access to health care for our country’s most vulnerable and sickest individuals,” the senators said in the letter.
The bill also drew condemnation from tea party conservatives last week for retaining too many of the government protections and programs created in Obamacare. Of chief concern to conservatives is the federal Medicaid expansion, which has insured millions in 31 states.
Representatives from top conservative groups, including the Heritage Foundation, have been lobbying the White House in recent days to support a rollback of Medicaid benefits in 2018 — two years earlier than the House Republican plan currently envisions.
While Republican President Donald Trump initially promised a replacement plan that would ensure “insurance for everybody,” he has offered his unwavering support to the Republican bill — crafted, in part, by his health and human services secretary, Tom Price.
Trump has stopped promising universal coverage, instead promising that, if enacted, “you’ll see rates go down, down, down, and you’ll see plans go up, up, up.” Trump has also described the overhaul bill as “a thing of beauty.”
