CBO on GOP Health Proposal: 24 Million More Uninsured Next Year; $337b Deficit Cut x 10 Years

CBO Sees 24 Million More Uninsured, $337 Billion Deficit Cut in Coming Decade With GOP Health Plan
Drop In Number Of Insured Would Result In Part Because People Would Opt To Go Without Coverage
Stephanie Armour and Stephanie Armour The Wall Street Journal March 13, 2017

A Republican plan to replace the Affordable Care Act would leave 24 million more people without insurance in 2026 compared with current law, an analysis by the nonpartisan Congressional Budget Office has found.

The legislation would reduce the federal deficit by $337 billion through 2026, in large part because it would lower federal spending for Medicaid and end tax credits now provided to people on the Affordable Care Act’s insurance exchanges, according to the analysis, released Monday.

The drop in the number of insured would be due in part to people opting to go without coverage once the requirement that most Americans have coverage or pay a penalty is repealed, according to the report by the CBO and the Joint Committee on Taxation. Higher premiums would also prompt some people to opt to go without insurance, the report said.

The long-awaited analysis is likely to inflame the debate and pose the first significant test for Republicans trying to topple the ACA. It could imperil the legislation’s changes in the Senate, where some moderate Republicans already are wary of supporting measures that strip too many people of their health insurance.

“Today’s CBO report now confirms what we already knew: despite promises that ‘everyone would be covered’ and ‘no one would be worse off,’ this Republican bill would rip away health insurance from 24 million Americans over the next decade and ask millions to pay more for less coverage,” said Reps. Richard Neal of Massachusetts and Frank Pallone of New Jersey, the top Democrats on the two House committees that drafted the GOP health bill.

But House Speaker Paul Ryan (R., Wis) drew a different lesson.

“When people have more choices, costs go down. That’s what this report shows,” Mr. Ryan said. “And, as we have long said, there will be a stable transition so that no one has the rug pulled out from under them.”

The uninsured would rise by 24 million in a decade in part due to a decline in the number of people on Medicaid, according to the analysis. In 2026, an estimated 52 million people would be uninsured compared with 28 million who would lack insurance under the current ACA.

The new tax credits in the House GOP proposal would be less generous than the credits under the ACA, but other changes would lower average premiums enough to draw healthy people in and stabilize the individual market, according to the report.

Premiums in the individual market would tend to increase before 2020, rising up to 20% higher than under the ACA, in large part because of the demise of the penalty for not having coverage, based on the report. Premiums would then go down—in 2026, the average premiums for a single person in the individual market would be about 10% lower than under the health law now, the analysis found.

Republicans have been pitching their overhaul of the health law as a cure for high prices under the ACA, asserting that the proposal would drive down costs by encouraging competition and giving people more choice.

To achieve that, GOP members aim to relax the requirement that insurers provide a certain array of benefits, allowing them to offer less generous plans that cost less, among other changes. President Donald Trump has also said he would work to make it easier for insurers to sell plans across state lines, arguing that the competition would also drive down premiums.

The independent CBO has long been used as a neutral referee when claims are made about a bill’s costs or benefits. At times the office has come in for criticism by the party that is less enamored of its conclusions about a particular piece of legislation.

In the days leading up to the CBO’s report, Republicans, concerned about unfavorable findings, had been laying the groundwork by playing down the importance of the office’s estimates, or “scoring.”

White House spokesman Sean Spicer on Monday said the Republican solution would increase choices while decreasing costs. And many in the GOP have said their proposal should be judged not against the current situation but against what would happen if the ACA were left untouched.

“Americans have been watching their health care costs escalate,” Mr. Spicer said at a press briefing.