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Revamped GOP Healthcare Bill Gets Analyzed by Budget Office

by Countable | 5.24.17

The Congressional Budget Office (CBO) released its updated analysis of the GOP’s bill to repeal and replace Obamacare on Tuesday, finding that about one million more Americans would be covered in 2026 under the latest version of the American Health Care Act than under its predecessor which would've led to 24 million people without coverage. It also found that health insurance premiums would rise until 2020, before decreasing at a faster rate than the earlier version of the AHCA to a level lower than they’d be under current law in 2026, although the decrease would range from four percent for states that don’t pursue waivers to as much as 20 percent or more in states that do.

The CBO is the independent agency that analyzes legislation for Congress. It has been criticized for the inaccuracy of its estimates in the past, such as when it overestimated enrollment in Obamacare exchanges by 18 percent. In today’s report, it acknowledged that its estimate should be viewed with the understanding that there’s a great deal of uncertainty surrounding how the federal government, states, insurers, employers, individuals, and healthcare providers respond to the changes in law.

Cost: The American Health Care Act would reduce spending by $1.111 trillion over the 2017-2026 period and reduce tax revenues by $992 billion, which on net would lead to $119 billion in deficit reduction over that period. That deficit reduction total is $32 billion less than the version of the bill the CBO scored in late April, and $218 billion less than the original version of the bill.

Health insurance coverage: In 2018, it’s projected that 14 million more people would be uninsured than under current law because some individuals would opt to not buy health insurance without facing the tax penalty imposed by Obamacare’s individual mandate. As a result of changes that take effect later, the number of uninsured relative to current law would rise to 19 million in 2020 and 23 million in 2026.

In total, 51 million people would be uninsured in 2026 under the AHCA, as opposed to 28 million people who wouldn’t have insurance that year if current law remains in effect.

Health insurance premiums: The CBO estimates that premiums will continue to increase until 2020, when they will begin to decrease. In 2018, increases would average about 20 percent before slowing to 5 percent in 2019, which would be attributable to fewer healthy enrollees buying health insurance without the individual mandate in effect.

Starting in 2020, premiums would be expected to decrease, but changes would vary based on states receiving and implementing waivers to the essential health benefits or community rating mandates. Without making specific predictions about which states will request and implement waivers, the CBO examined three general approaches states could take and gave a high-level estimate of the number of Americans it’d apply to:

  • In states that don’t request waivers, premiums would be four percent lower in 2026 than under current law. The CBO expects this to be the case for about half the U.S. population.

  • In states that receive waivers and make moderate changes to regulations — likely more to essential health benefits than community ratings — premiums would be roughly 20 percent lower in 2026 than under current law, although they’d range between 10-30 percent lower. The CBO expects this to apply to about one-third of the U.S. population.

  • In states that receive waivers for both essential health benefits and community rating, premiums would be lower than under existing law and could vary significantly based on how a state implements its waiver. The CBO expects this to apply to about one-sixth of the population

What is the CBO?

The CBO was created in 1974 to provide Congress with independent, nonpartisan analysis regarding how proposed legislation would impact the budget through taxes and spending. It is staffed by experts in economics, public policy, and the tax code who consult with outside experts when it comes to certain aspects of the budget. The two congressional budget committees created the rules and regulations that govern the CBO’s operations.

The current director of the CBO is Keith Hall, an economist who previously served as the Commissioner of the Bureau of Labor Statistics for four years after stints with the Depts. of Commerce and Treasury, and the White House Council of Economic Advisors.

Tell your reps what you think of the American Health Care Act and its latest CBO estimate using the Take Action button.

— Eric Revell

(Photo Credit: Gage Skidmore via Flickr / Creative Commons)

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