Five Findings of the CBO on Senate Health Plan
June 26 2017 - 8:19PM
Dow Jones News
By Michelle Hackman
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.
Write to Michelle Hackman at Michelle.Hackman@wsj.com
(END) Dow Jones Newswires
June 26, 2017 20:04 ET (00:04 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.