CBO: 23 Million More Uninsured Under House GOP O’Care Repeal Bill

Twenty-three million people will lose insurance coverage compared to current law under the Obamacare repeal bill that House Republicans passed earlier this month, the Congressional Budget Office said in a highly-anticipated analysis released Wednesday.

A majority of the those coverage losses come from the major reduction in funding  to Medicaid than the original version of the bill also had. Some 14 million fewer people will be enrolled in Medicaid in 2026 than projected under current law, according the report, amounting to a 17 percent reduction in the program.

The legislation, the American Health Care Act, would phase out Medicaid expansion starting in 2020 while imposing longer-term cuts to the traditional program. It gives states the option to waive out of some of the Affordable Care Act’s consumer protections and reworks the ACA tax credits. It eliminates many of Obamacare’s taxes, including the individual mandate.

The individual market would see 8 million fewer people without insurance in 2018 and 20 million fewer by 2020, according to the CBO. That difference would shrink to 6 million fewer people with insurance in the nongroup market by 2026, as states transitioned into waiver programs and the new tax credit schemes.

“Although the agencies expect that the legislation would increase the number of uninsured broadly, the increase would be disproportionately larger among older people with lower income—particularly people between 50 and 64 years old with income of less than 200 percent of the federal poverty level,” the CBO said.

The CBO score released Wednesday is an analysis of the version of the bill House Republicans passed in early May. Compared to its analysis of an earlier version of the bill the coverage numbers are slightly better than the 24 million predicted to lose insurance under the original version, and the premiums in some places will be notably lower. However, this trend, the CBO said, would come with insurance that “on average, would pay for a smaller proportion of health care costs.”

The CBO said that latest version of the legislation would save the government $119 billion, $32 billion less than its March analysis of a previous version of the bill that did not include some changes made to bring conservatives and moderate Republicans on board. The $834 billion cut in Medicaid funding and $276 billion in savings by making the tax credits for individual insurance less generous are offset by the $664 billion the legislation would add to the deficit in eliminating Obamacare’s taxes, a cut that would mainly benefit high-income earners and industry.

The CBO estimated that roughly half of Americans would live in states that would request the waivers to make “moderate” changes to the ACA insurer rules; they would see premiums 20 percent lower than current law in 2026. One-sixth of the population would live in states that would seek to make more drastic changes to the regulations, the CBO said, which would prompt large premium variations among consumers that the CBO did not have any average estimate for. Roughly half of people would live states that did not seek any waivers, and their premiums would be 4 percent lower than under current law in 2026, according to the CBO’s projections.

The waivers available to states under the bill include opting out of the ACA’s Essential Health Benefits, which mandate the 10 broad coverage areas insurers must offer, as well as aspects of its “community ratings” standards that prevent insurers from hiking premiums based on health states. At first, moderate Republicans balked at the last-minute addition of the waiver option to the legislation, as it threatened protections for people with pre-existing conditions.Many came back on when an additional $8 billion over 10 years was added to a $100 billion-plus fund for states to set up high risk pools and other programs for high-cost individuals.

The CBO concluded that the $8 billion would be woefully insufficient to cover the expected large premium increases.

“Although CBO and JCT expect that federal funding would have the intended effect of
lowering premiums and out-of-pocket payments to some extent, its effect on community-rated premiums would be small because the funding would not be sufficient to substantially reduce the large increases in premiums for high-cost enrollees,” the report said.

Furthermore, the CBO said that the one-in-six Americans living  in states that choose the most aggressive waiver options — either opting out of community ratings, the essential health benefits, or both — would see the nongroup marketplace grow increasingly unstable starting in 2020.

Healthy people would flock to lower-priced plans that covered less and/or engaged in medical underwriting for those with pre-existing conditions. The premiums for sicker people would increase until some were priced out entirely, “despite the additional funding that would be available under H.R. 1628 to help reduce premiums,” the CBO said.

The House passed the bill narrowly after making some last-minute changes on May 4.

The Senate GOP is now working on its own health care bill, but Republicans say they will be incorporating many of the House bill ideas, and Wednesday’s CBO score is of particular importance as it defines the savings target the Senate bill will have to meet to make their bill eligible for the complicated procedural process, known as reconciliation, Republicans are using to avoid a Democratic filibuster.

Regardless of what happens with the bill in the Senate, House Republicans are now on the hook for passing a bill that would toss 23 million people off of insurance, while making coverage more costly in particular for older and lower-income consumers. A slim majority of the House voted for the bill, despite not seeing its final CBO score. The White House put its full weight in behind the bill, and President Trump hosted House Republicans for a celebration in the Rose Garden after the House vote.

Read the report below: