CBO On Senate Obamacare Repeal Bill: 22 Million Fewer Insured, $321B In Savings
The Congressional Budget Office (CBO) projects that 22 million fewer people would be insured by 2026 while reducing federal spending by $321 billion under the Senate GOP’s Obamacare repeal bill, according to their report released Monday.
The Better Care Reconciliation Act of 2017’s score contrasted the House’s American Health Care Act — which projected a 119 billion in deficit reduction over the course of a decade and 23 million less people covered by 2026 — in a number of areas.
According to the nonpartisan scorekeeper, an estimated total of 49 million people would be uninsured compared with the projected 28 million who would go without coverage under the Affordable Care Act by 2026.
The bill’s savings largely come from cuts to Medicaid spending, which would be reduced by 26 percent from current ACA spending levels, in addition to changes to Obamacare subsidies for nongroup health insurance.
“Those savings would be partially offset by the effects of other changes to the ACA’s provisions dealing with insurance coverage: additional spending 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,” the report reads.
Modifications to ACA tax credits that aren’t directly related to the health coverage would lead to the largest deficit increases, the report says, citing the repeal of the surtax on investment income and repealing annual fees in insurance providers.
According to the report, premiums would increase by 20 percent in 2017 and 10 percent in 2018 before steadily declining by 30 percent in 2020. The agency projects the decrease in out-of-pocket costs will be contingent on whether states choose to waive out of the community rating system.
“By 2026, average premiums for benchmark plans for single individuals in most of the country under this legislation would be about 20 percent lower than under current law, CBO and JCT estimate — a smaller decrease than in 2020 largely because federal funding to reduce premiums would have lessened,” the report notes. “The estimates for both of those years encompass effects in different areas of the country that would be substantially higher and substantially lower than the average effect nationally, in part because of the effects of state waivers.”
“A combination of factors would lead to that decrease — most important, the smaller share of benefits paid for by the benchmark plans and federal funds provided to directly reduce premiums,” the CBO said. “That share of services covered by insurance would be smaller because the benchmark plan under this legislation would have an actuarial value of 58 percent beginning in 2020.”
The estimates show the nongroup insurance market would remain stable throughout most of the country, with premium tax credits insulating changes in premiums “through 2021 and in later years.”
Senate Majority Leader Mitch McConnell has repeatedly said that he would like to see a vote on the measure before Congress’ July 4 recess, a difficult feat for the Kentucky Republican despite plans to use the reconciliation process, which only requires a simple majority to pass the upper chamber. Currently, five GOP senators — Sens. Rand Paul of Kentucky, Ron Johnson of Wisconsin, Ted Cruz of Texas, Mike Lee of Utah and Dean Heller of Nevada — said they don’t support the measure in its current form.
If the bill passes, it will be sent back to the House for a second vote.
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