CBO: 24 Million Would Lose Health Insurance in First Decade of GOP's Plan

by | March 14, 2017

By Tony Pugh

An estimated 14 million people would lose health insurance in the first year of the Republican proposal to overturn Obamacare, according to a new estimate from the nonpartisan Congressional Budget Office.

The number would rise over time and by 2026, 24 million will have lost health coverage if the bill becomes law, the office estimates.

The report, from the congressional agency charged with scoring legislation's cost and impact, is worse news than Republicans had expected, and provides yet another political hurdle for House Speaker Paul Ryan's controversial plan, which is facing stiff opposition from hospitals, doctors, seniors and patient advocacy groups.

Nonetheless, Ryan, R-Wis., said the CBO report showed, "When people have more choices, costs go down."

The bill would bring about some savings, reducing the federal budget deficit by $337 billion over the first decade, the CBO estimates. But those would come mainly through cuts to the Medicaid program and by slashing the Affordable Care Act's federal subsidies to help consumers purchase marketplace coverage.

In total, the CBO estimates, 52 million people would lack health insurance in 2026 under the Republican bill, compared with 28 million under the current law.

The CBO's estimates go beyond the numbers that have been put out in the past week by independent analyses.

"Fourteen million more uninsured next year? That was definitely surprising to me, how quickly they think the impact will occur," said Caroline Pearson, senior vice president at the consulting firm Avalere Health.

Premiums for single-policy holders in the individual market would jump by 15 percent to 20 percent in 2018 and 2019 under the Republican legislation, according to the CBO estimates. The increases are blamed mainly on the bill's elimination of the health law's individual mandate, which requires most Americans to have coverage or face a tax penalty.

Republicans have been girding for the report since last week, trying to raise doubts by casting aspersions on the accuracy and significance of the CBO's work.

White House Press Secretary Sean Spicer, Office of Management and Budget Director Mick Mulvaney and Health and Human Services Secretary Tom Price have taken swipes at the CBO's enrollment projections for the health insurance marketplace.

After saying on Sunday that he expected the legislation to cover more people, Price would not concede Monday that people will lose coverage under GOP plan.

"No, I wouldn't be able to concede that at all," Price told reporters outside the White House. "Because the fact is they're going to be able to buy the coverage they want ... . We think the CBO simply has it wrong."

By 2020, the CBO projects, premiums for individuals would drop by about 10 percent due to several factors: more young enrollees, states covering sicker, high-cost plan members through high-risk pools and insurers covering a lower percentage of enrollees' medical costs.

Ryan said in his statement that the CBO report "confirms that the American Health Care Act will lower premiums and improve access to quality, affordable care."

"I recognize and appreciate concerns about making sure people have access to coverage ... . And as we have long said, there will be a stable transition so that no one has the rug pulled out from under them," he said.

Health care advocates wasted no time criticizing the legislation anew.

"The House bill, as the CBO score so painfully reveals, would harm the most vulnerable, while wealthier Americans benefit," said a statement from Elizabeth Taylor, executive director of the National Health Law Program. "We hope the president and lawmakers in the Senate reject this regressive measure."

Dr. Andrew Gurman, president of the American Medical Association, called the potential loss of coverage "unacceptable."

"While the Affordable Care Act was an imperfect law, it was a significant improvement on the status quo at the time, and the AMA believes we need continued progress to expand coverage for the uninsured. Unfortunately, the current proposal _ as the CBO analysis shows _ would result in the most vulnerable population losing their coverage."

Of the 14 million expected to lose coverage in 2018, roughly 6 million would lose individual insurance, 5 million would lose Medicaid coverage and about another 2 million would likely lose employer-sponsored coverage, the CBO estimates.

A total of 14 million people would lose Medicaid coverage by 2026, the CBO reports, causing a 17 percent enrollment reduction. As a result, Medicaid spending would drop by about 25 percent by 2026 under the legislation.

The CBO doesn't expect any other states to expand eligibility for Medicaid because the GOP bill forces states to pay a greater share of their medical costs.

The American Health Care Act already struggles with lukewarm support from moderate Republicans who fear it harms seniors and the poor, and strong resistance from the party's conservative wing, which says it's too much like Obamacare.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, which has its own take on the bill, said in a statement that CBO's analysis should be taken seriously.

"While no individual or organization can perfectly predict the future, CBO has a long history of providing credible and impartial estimates based on the center of a range of likely outcomes," MacGuineas said. "CBO is our nation's fiscal referee and should be respected even if you do not like the call."

After Ryan's bill passed two key committees in the House of Representatives last week, the legislation might run into problems in the House Budget Committee, which will take up the measure later this week.

The repeal legislation would remove Obamacare's individual coverage mandate and replace the Affordable Care Act's income-based tax credits with smaller amounts based on age. The legislation also would phase out enhanced funding for 11 million newly eligible Medicaid recipients.

The Republican bill would be largely paid for by cuts to the Medicaid program, which the bill would move from an open-ended entitlement program to one with capped funding based on the number of enrollees. The shift will cost states an estimated $370 billion in federal funding.

Even before the CBO's score came out, independent analyses in the past two weeks showed the bill could bring high costs to the Treasury and big hits to the nation's newly insured.

The Brookings Institution, a nonpartisan think tank, expected the CBO to find that at least 15 million people would lose coverage under the Republican measure over its first decade.

The Joint Committee on Taxation estimates that repealing the Affordable Care Act's taxes would cost roughly $600 billion through 2026 and nearly $700 billion through 2027.

More than half of the tax-cut benefits would flow to the wealthy. People earning more than $1 million a year would see average annual tax cuts of $57,570 in 2025, according to estimates by the Urban-Brookings Tax Policy Center.

(c)2017 McClatchy Washington Bureau