ACA Replacement Bill Will Increase Uninsured by 23 Million, CBO Says

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May 24, 2017

The House-approved bill that largely repeals and replaces the Affordable Care Act (ACA) will add 23 million Americans to the ranks of the uninsured by 2026, a slight improvement over the 24-million estimate for the original version of the legislation, the Congressional Budget Office (CBO) said in a much-awaited report today.

However, the CBO also projected that one amendment to the bill, called the American Health Care Act (AHCA), would increase out-of-pocket spending for many individuals and families it would cover. And the bill still would reduce Medicaid spending by more than $800 billion over 10 years.

The CBO's latest analysis, or score, of the AHCA did not mollify the measure's many critics.

"Today's estimates from the nonpartisan Congressional Budget Office show that last-minute changes to the AHCA made by the House offered no real improvements," said Andrew Gurman, MD, president of the American Medical Association (AMA). "Millions of Americans will become uninsured — with low-income families on Medicaid being hit the hardest."

The AMA and other major medical societies as well as the healthcare industry in general lobbied against the bill, which they viewed as rolling back insurance coverage gains under the ACA.

The Republican-controlled House narrowly passed the AHCA on May 4 without the benefit of an updated CBO score, or analysis, of the measure to reflect several last-minute amendments. One would allow states to waive the ACA's community rating provision, which bars insurers from charging consumers more if they have pre-existing conditions. Under another amendment, states could allow insurers on ACA marketplaces, or exchanges, to offer policies that don't include all of the law's essential benefits, such as hospitalization, maternity care, and mental health care. The CBO said that in states permitting skimpier policies some individuals who buy coverage on an exchange would spend substantially more on healthcare because they would have to pay for excluded services out of pocket — that is, if they didn't forego the services as unaffordable.

In addition, the CBO foresees a few million Americans buying policies with so few benefits that they do not meet the agency's definition of health insurance.

The CBO, working together with the Joint Committee on Taxation, framed its estimates of the AHCA's impact by comparing them to what's likely if the ACA remains in effect. For example, the agency projected the number of uninsured Americans aged less than 65 years in 2026 to be 28 million under the ACA and 51 million under the AHCA, for a difference of 23 million. The increase in the uninsured under the AHCA "would be disproportionately larger among older people with lower income — particularly people between 50 and 64 years old with income of less than 200 percent of the federal poverty level."

Like the ACA, the AHCA offers individuals premium subsidies to buy coverage on the exchanges, but they're generally less generous. While the ACA's premium subsidies are based on income, those offered by the AHCA are based on age.

In the original version of the AHCA, House Republicans created a $100 billion Patient and State Stability Fund to help avert hardships created by other parts of the bill. States, for example, could use the money to reduce premiums for policies sold on the exchanges. To provide a cushion against ill-effects of states waiving community rating and ACA essential benefits, lawmakers allocated an extra $38 billion that states could use to shore up coverage.

The CBO said the latest version of the bill would reduce the federal deficit by a smaller amount over 10 years — a net $119 billion compared with the $150 billion that the agency calculated in a March 24 report. The AHCA creates this black ink in part by reducing federal contributions to state Medicaid programs from 2017 through 2026 by $834 billion, somewhat less than the $880 billion originally estimated by the CBO. 

Senate Republicans intend to draft their own legislation to repeal and replace the ACA, incorporating elements of the House bill.

Follow Robert Lowes on Twitter @LowesRobert

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