The Congressional Budget Office report states that under the American Health Care Act (AHCA) 14 million people will lose insurance in 2018 and 23 million will lose insurance by 2026.
The Congressional Budget Office reported that the legislation would reduce federal deficits by $119 billion between 2017 and 2026, mainly because of its cuts to Medicaid and Obamacare insurance subsidies. The final version of the AHCA reduces the deficit by less than $32 billion compared to the previous version.
The House passed the AHCA without a CBO score that would allow lawmakers and the American people to evaluate the bill’s effects on costs and health insurance coverage. Previous versions of the AHCA estimated that 24 million Americans could lose insurance by 2026, while the previous version would save $150 billion over the next ten years.
The CBO believes that there are several factors that the AHCA could contribute to the stability of the individual market, including subsidies to purchase insurance, grants patients for high-risk patients through the Patient and State Stability Fund.
The budget office added, that although the AHCA’s tax credits are less generous compared to Obamacare’s income-based subsidies, the tax credits would lower average premiums enough to attract enough healthy people to stabilize the individual health insurance market.
The House pushed through the AHCA after they added the MacArthur amendment, which allows states to obtain waivers to repeal Obamacare regulations that raise the cost of premiums, known as community ratings and essential health benefits. Essential Health Benefits require that health insurance plans must cover certain services such as doctors’ services, inpatient or outpatient hospital care, prescription drugs, pregnancy, childbirth, and mental health. Community ratings regulations prevent health insurers from varying premiums within a certain area based on age, gender, or health status.
According to the CBO, healthy patients would be able to purchase individual health insurance with relatively low premiums, however, less healthy Americans might have to pay higher premiums, and might lose insurance in states that choose to eliminate Obamacare’s community ratings and essential health benefits regulations.
The CBO projected that in 2018, average premiums would rise by about 20 percent in 2018, and 5 percent in 2019, however, in 2020 states will be able to obtain waivers that would rescind Obamacare regulations. The CBO projects:
- States that would not request waivers for Obamacare’s regulations would experience 4 percent lower premiums in 2026 compared to Obamacare.
- States that make moderate changes to Obamacare regulations would experience roughly 20 percent lower premiums in 2026 compared to Obamacare. Average premiums for younger Americans would become substantially reduced, while premiums for older citizens would lower slightly.
- States that obtain waivers for Obamacare’s essential health benefits and community ratings would experience the lowest average premiums compared to states retain all or some of Obamacare’s essential health benefits and community ratings The CBO did not have an estimate as to how low premiums would drop in states that obtain both waivers.
The CBO estimates that the AHCA will reduce Medicaid spending by more than $834 billion over the next ten years, primarily through ending Obamacare’s Medicaid expansion and creating a per-capita limit on Medicaid payments.
Energy and Commerce Committee Chairman Greg Walden (R-OR) and Health Subcommittee Chairman Michael Burgess (R-TX) released the following statement, saying that the AHCA will reduce premiums and stabilize the health care market. “The American Health Care Act is the first step in our efforts to repeal Obamacare and rebuild our broken health care system. CBO continues to find that through our patient-focused bill, premiums will go down and that our reforms will help stabilize the market,” said chairmen Walden and Burgess. “Our plan puts states and patients in the driver’s seat, creating an innovative fund to help lower premiums and other out-of-pocket costs. As the Senate continues its work on this vital bill, we encourage them to further these critical principles.”
The Department of Health and Human Services released a new report that noted that under Obamacare individual health insurance premiums doubled.
House Republicans passed the AHCA earlier this month without waiting for the CBO score.
Read the rest of the CBO report here: