Numbers of uninsured would increase by 23M under AHCA, CBO says

In 2026, an estimated 51M people under age 65 would be uninsured, compared to 28M who would lack insurance under current law.
By Susan Morse
08:29 AM
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CBO score for AHCA

The American Health Care Act would increase the number of people who are uninsured by 23 million in 2026 and reduce federal deficits by $119 billion over the coming decade, according to a Congressional Budget Officer and Joint Committee on Taxation report released Wednesday.

CBO and JCT estimate that in 2018 14 million more people would be uninsured under the bill 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.

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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.

The number of uninsured Americans is estimated to be slightly higher under this version of the bill, as compared to earlier legislation scored by the CBO in March.

In states that make changes to market regulations, premiums would be an estimated 20 percent lower under the AHCA by 2026 than the Affordable Care Act, primarily because policies would provide fewer benefits, the report said.

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The revised bill allows states to get waivers from offering coverage for preexisting conditions, as a way to lower the cost of premiums. States getting waivers would get federal funds to set up high-risk pools to help high-risk individuals pay for coverage.

The bill would tend to increase individual market premiums before 2020, relative to those under current law -- by an average of about 20 percent in 2018 and 5 percent in 2019. Starting in 2020, however, average premiums would depend in part on any waivers granted to states and on how those waivers were implemented and other factors.

Democrats quickly reacted to the findings. Ways and Means Committee Ranking Member Richard Neal of Massachusetts said,
"Today's updated CBO score reaffirms the disturbing reality of Trumpcare: tens of millions of Americans would lose their health insurance and millions more would be forced to pay dramatically more for less coverage – all to pay for tax cuts for millionaires and corporations."

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Health and Human Services Secretary Tom Price disagreed with the CBO's findings.

"The CBO was wrong when they analyzed Obamacare's effect on cost and coverage, and they are wrong again," Price said by statement. "In reality, Americans are paying more for fewer healthcare choices because of Obamacare, and that's why the Trump Administration is committed to reforming healthcare. In a new analysis released just last night, HHS reported that premiums in the individual market have more than doubled since many of Obamacare's regulations and mandates were implemented."

The House narrowly passed the AHCA earlier this month, prior to getting the CBO score. It now moves on to the Senate where members are coming up with their own plans to repeal and replace the American Health Care Act.

Under the legislation, the nongroup insurance markets would continue to be stable in many parts of the country, the report said.

However, the agencies estimate that about one-sixth of the population resides in areas in which the nongroup market would start to become unstable beginning in 2020. That instability would result from market responses to decisions by some states to waive two provisions of federal law.

One type of waiver would allow states to modify the requirements governing essential health benefits, which set minimum standards for the benefits that insurance in the nongroup and small-group markets must cover.

A second type of waiver would allow insurers to set premiums on the basis of an individual's health status.

CBO and JCT expect that, as a consequence, the waivers in those states would have another effect: Community-rated premiums would rise over time, and people who are less healthy, including those with preexisting or newly acquired medical 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--despite the additional funding that would be available under the bill to help reduce premiums.

As a result, the nongroup markets in those states would become unstable for people with higher-than-average expected healthcare costs. That instability would cause some people who would have been insured in the nongroup market under current law to be uninsured.

The Congressional Budget Office and Joint Committee on Taxation estimate that the bill 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 earlier version of the bill.

The largest savings would come from reductions in outlays for Medicaid and from the replacement of the Affordable Care Act's subsidies for nongroup health insurance with new tax credits for nongroup health insurance, the CBO said.

Those savings would be partially offset by other changes in coverage provisions--spending for a new Patient and State Stability Fund, designed to reduce premiums, and a reduction in revenues from repealing penalties on employers who do not offer insurance and on people who do not purchase insurance.

To facilitate the analysis, CBO and JCT examined three general approaches states could take to implement the bill.

While a projection of a specific state's actions would be highly uncertain, the CBO said about half the population resides in states that would not request waivers regarding essential benefits or community rating.

In those states, average premiums in the nongroup market would be about 4 percent lower in 2026 than under current law, mostly because a younger and healthier population would be purchasing the insurance.

The changes in premiums would vary for people of different ages. A change in the rules governing how much more insurers can charge older people than younger people, effective in 2019, would directly alter the premiums faced by different age groups, substantially reducing premiums for young adults and raising premiums for older people.

About one-third of the population resides in states that would make moderate changes to market regulations. In those states, CBO and JCT expect that, overall, average premiums in the nongroup market would be roughly 20 percent lower in 2026 than under current law, primarily because, on average, insurance policies would provide fewer benefits.

Twitter: @SusanJMorse