On its face, the Congressional Budget Office analysis of the American Health Care Act released Wednesday afternoon included at least a tiny bit of good news for Republicans.
The new analysis projects a slight uptick in the number of people who would have insurance compared to earlier versions of the GOP legislation, and projects a decrease in average premiums. At the same time, the bill would cut $119 billion from the federal deficit over 10 years. That’s down slightly from the previous estimate, but far more than needed to clear Senate rules that could prevent it from being passed through the budget reconciliation process.
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Look any deeper, though, and many of the criticisms of the earlier versions of the proposal remain valid. The CBO projects that if the AHCA went into effect as passed, 14 million more people would be without insurance in 2018 than under the Affordable Care Act, which the bill is meant to replace. That number would reach 19 million by 2020 and 23 million by 2026.
By 2026, there would be 51 million Americans without health insurance under the plan. That’s 1 million fewer than under the previous version of the bill, but still 23 million more than if the ACA were left in place and given sufficient funding.
The CBO also found that the GOP bill will cause out-of-pocket premium costs to spike to nearly 10 times current levels for some people. Others will have cheaper, but skimpier, insurance policies that offer lower premiums in exchange for the risk of higher out-of-pocket costs if they require care that is no longer covered.
And in states that apply for waivers to opt out of some key Obamacare rules, like the requirements to provide specific “essential health benefits” and to charge sick and healthy people the same for coverage, the CBO said that people with pre-existing conditions “would ultimately be unable to purchase comprehensive nongroup health insurance at premiums comparable to those under current law, if they could purchase it at all.”
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While average premiums would fall under the AHCA, the catch is that most of the benefits would go to younger, healthier individuals. The bill would result in massive premium increases for older Americans who are not yet eligible for Medicare. For example, the CBO projects that a single 64-year-old earning $26,500 would see total out-of-pocket premium costs soar from $1,700 per year under the Affordable Care Act to $16,100 per year under the AHCA.
One element of the CBO analysis that is certain to provoke resistance from the bill’s Republican supporters is the agency’s decision — shared by the Joint Committee on Taxation — that just because someone purchases a product that is called “health insurance” they aren’t necessarily counted among those considered “covered.”
“CBO and JCT broadly define private health insurance coverage as consisting of a comprehensive major medical policy that, at a minimum, covers high-cost medical events and various services, including those provided by physicians and hospitals,” the report says. That means that in states that seek waivers to allow policies with minimal benefits to be sold to people receiving federal premium subsidies, those buying such plans wouldn’t count as being insured because, in CBO’s assessment, “they do not have financial protection from major medical risks.”
The report issued Wednesday was vague about the number of people who would fall into that category, saying only that it would amount to “a few million.” However, when one of the key arguments against the bill is the number of people who would lose insurance because of it, supporters are likely to take issue with the decision to insist that people who have purchased some form of insurance aren’t actually insured.
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In general, the analysis paints a picture of a country where the costs of insurance coverage on the individual market, and what such coverage includes, varies wildly from state to state, depending on individual states’ decisions about waivers.
States that make moderate changes to the current system under the waivers would create a market where premiums are a lower than they would otherwise be — by about 20 percent on average — but where older people pay considerably more. States that take full advantage of the waivers could see average premiums decrease by an average 40 percent on the individual market, but consumers could face very large out-of-pocket costs if they need care that is no longer covered.
The report offers a particularly gloomy assessment of the future for people with preexisting conditions who live in states that take full advantage of the bill’s waiver provisions. “Nongroup markets in those states would become unstable for people with higher-than-average expected health care costs,” the report finds. “That instability would cause some people who would have been insured in the nongroup market under current law to be uninsured.”
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The future status of the AHCA remains doubtful. The Senate has indicated that it plans to write its own health care legislation, and because of the political dynamics of that chamber, it will most likely seek to minimize coverage losses and the risk of financial ruin for consumers on the individual market.
Because the AHCA barely passed the House in the first place, it will be difficult to assemble a coalition behind a bill that deviates dramatically from it, which a Senate version almost certainly will.
