ACA Watch March 14, 2017
CBO says insured ranks to drop
With Republicans facing difficulties explaining why the American Health Care Act would bring about a positive change to America’s health care system, the Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) said yesterday that in a decade the Republican bill would leave millions uninsured — but would reduce the federal deficit.
The Los Angeles Times reported that the Trump Administration “said it ‘strenuously’ disagreed with” the CBO’s findings.
The federal deficit will fall by $337 billion
CBO and JCT say that by cutting Medicaid and eliminating the Affordable Care Act’s (ACA) individual subsidy, the Republican plan will cut roughly $935 billion dollars from the federal deficit. These savings are offset by $599 billion in tax credits and revenue reductions as a result of elimination the individual mandate and taxes. The result is that the CBO/JCT believes the deficit will fall $337 billion by 2026.
Ranks of insured Americans will drop by 24 million people
The CBO also said its analysis revealed a total of 52 million Americans would be uninsured in 2026 if the AHCA were enacted, compared to 28 million under the Affordable Care Act (ACA). In 2018 alone, the report states 14 million people will lose coverage, with the number rising to 24 million by 2026. Additionally, the report referred to a drop in employer-based coverage that would eliminate about 7 million people from the insured ranks, especially those employers with a younger work force.
The Washington Post said the [CBO] estimate highlighted the “dramatic loss in health insurance coverage” which would occur if the AHCA becomes law, “potentially contradicting President Trump’s vow that the plan would provide ‘insurance for everybody.’”
Premium will rise for 2 years then fall to 10% below current costs
The report states that a 10-20% hike in premium costs is expected in 2018 through 2019 with the ACHA as a result of the elimination of the individual mandate. Fewer healthy people enrolling will drive up costs. This could be offset by an increase in younger enrollees, since the ACHA sets premium rates based on age, younger people will pay less. On the flip side, though, the legislation could force older Americans to pay up to 5 times more.
Health insurance market is expected to remain stable
Using less generous subsidies than those offered by the ACA, the AHCA hopes to prop up the non-group market to keep premiums low enough to ensure healthy people enter the risk pool. Today, the risk pool is stable under the ACA.
About the report
The CBO-JCT estimate uses March 2016 as a baseline, with some adjustments for legislation passed since then. It assumes the AHCA would be enacted by May 2017.
As a long-time member of the Employers Council for Flexible Compensation (ECFC), Employee Benefits Corporation will continue to provide ACA Watch updates as legislation continues to evolve.