Staff of the Joint Committee on Taxation and the Congressional Budget Office released Wednesday its estimate of the direct spending and revenue effects for a revised American Health Care Act.
According to the CBO, which provides nonpartisan budget and economic information to Congress, “H.R. 1628 would reduce the cumulative federal deficit over the 2017-2026 period by $119 billion. That amount is $32 billion less than the estimated net savings for the version of H.R. 1628 that was posted on the website of the House Committee on Rules on March 22, 2017… .”
The largest savings would come from reductions in outlays for Medicaid and from doing away with Affordable Care Act subsidies, according to the CBO.
Compared to estimates regarding the initial bill, the CBO and JCT determined the number of people with health insurance would be slightly higher “and average premiums for insurance purchased individually—that is, nongroup insurance—would be lower, in part because the insurance, on average, would pay for a smaller proportion of health care costs.”
The CBO and JCT estimate shows, from 2017-2026, the AHCA as proposed would reduce direct spending by $1.1 billion and reduce revenues by $992 billion, for a net reduction of $119 billion in the deficit during that time.
“The provisions dealing with health insurance coverage would reduce the deficit, on net, by $783 billion; the noncoverage provisions would increase the deficit by $664 billion, mostly by reducing revenues,” according to the CBO.
And there will be a significant impact to coverage currently provided by the ACA, according to the CBO and JCT report.
The agencies determined that next year, 14 million more people would be uninsured under this version of the AHCA than under current law.
“The increase in the number of uninsured people relative to the number projected under current law would reach 19 million in 2020 and 23 million in 2026. In 2026, an estimated 51 million people under age 65 would be uninsured, compared with 28 million who would lack insurance that year under current law. Under the legislation, a few million of those people would use tax credits to purchase policies that would not cover major medical risks,” according to the report, which also states “about one-sixth of the population resides in areas in which the nongroup market would start to become unstable beginning in 2020.”
According to a report in the Washington Post, those “areas” are mostly states that went to the current administration in the last presidential election. The “nongroup market” refers to people who do not have health insurance through an employer or through the government.
“And ‘unstable’ means that people in those two categories who have preexisting medical problems might no longer be able to buy insurance,” according to the Post.
Coverage of preexisting conditions has been a sticking point, even within the GOP. House GOP leaders led the AHCA passed its first hurdle May 4 thanks to a last-minute addition of $8 billion that was meant to protect those with pre-existing conditions.
“However, the report undermines claims by House Republicans that their bill protects people with pre-existing conditions,” according to Fox News.
The CBO concluded some of those with pre-existing conditions wouldn’t be able to buy, under the AHCA, comprehensive health insurance at premiums comparable to those under Obamacare.
The CBO’s analysis, however, according to Fox News, “ends concerns among Republican congressional leaders about the House having to re-vote on its bill because it failed to reduce the federal deficit by $2 billion, which allows the Senate to pass a version by a simple, 51-vote majority. The Senate has 52 Republicans and 48 Democrats.”
National Public Radio reports, “Republicans argue that by allowing insurers to sell less comprehensive insurance, premiums will fall and more people will buy basic coverage. And their bill includes money for states to create so-called high-risk pools in which people with medical conditions can buy coverage if commercial insurers refuse them.
The report states small-business groups Main Street Alliance and the Small Business Majority are against the bill because many of their members rely on the individual insurance market for coverage.
“Many solo entrepreneurs would likely be forced out of the insurance market entirely. This means many small firms would close up shop while others would never get off the ground,” said John Arensmeyer, founder of Small Business Majority in the NPR report. The organization represents about 55,000 small businesses.
The CBO and JCT report can be seen here.