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CBO Releases Analysis for Senate Healthcare Bill

by Countable | 6.28.17

Updated 6/29/17: The CBO released its estimate for the Senate Republican proposal to repeal and replace Obamacare Monday, finding that it would reduce the federal deficit by $321 billion over the 2017-2026 period and increase the number of uninsured by 22 million in 2026 relative to current law. That’s in contrast to the 24 million uninsured and $119 billion in deficit reduction it estimated that the House-passed version of the American Health Care Act would provide.

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 Better Care Reconciliation Act, as the Senate proposal is known, would reduce federal spending by $1.022 trillion and tax revenue by $701 billion over the 2017-2026 period, That’s $202 billion more than the net savings projected for the House-passed AHCA.

Health insurance coverage: In 2018, it’s estimated that 15 million more people would be uninsured relative to current law, primarily because the tax penalty for not having health insurance would be eliminated. By 2026, about 49 million people would be uninsured compared to the 28 million who would be expected to be without coverage if current law stays in effect. This is largely driven by proposed changes to Medicaid.

Health insurance premiums: The CBO estimates that this proposal, like the House-passed bill, would lead to premiums increasing until 2020 at which point they’d start to decline. Premiums would be 20 percent higher in 2018 and 10 percent higher in 2019 relative to current law, but in 2020 average premiums would be 30 percent lower compared to current law. The CBO attributes the decrease to fewer benefits being covered by benchmark health insurance plans and federal funds being provided to reduce premiums.

Medicaid: The CBO estimates that Medicaid spending would be 26 percent lower in 2026 than the current budget baseline, and by 2036 it would be about 35 percent lower. Under the current baseline, the CBO expects overall Medicaid spending to grow by 5.1 percent per year over the next 20 years. The Senate's bill would increase Medicaid spending at 1.9 percent per year until 2026, and about 3.5 percent in the year after that.

Tell your senators what you think of the GOP’s proposal to repeal and replace Obamacare using the Take Action button.

— Eric Revell

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

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