GOP health plan to boost uninsured by 24 million, CBO says
About 24 million more people would be uninsured under the Republican plan to replace Obamacare, according to the nonpartisan Congressional Budget Office, creating a daunting political impediment for a proposal that would reduce the deficit by more than $300 billion.
The coverage estimate is a setback for President Donald Trump, who promised that “insurance for everybody” would replace Obamacare, which used government subsidies and an expansion of Medicaid to bring coverage to 20 million people. But Republicans trying to pass the legislation without Democratic support argued that any reduction in the rolls of the insured isn’t as important as what they say will be cheaper coverage.
The CBO, the official scorekeeper of the budgetary effects of proposed legislation, said the GOP proposal would reduce the deficit by $337 billion over 10 years. Trump touted the plan Monday before the CBO score was released.
“More competition, less regulation will finally bring down the cost of care,” Trump said. “It takes a while to get there because you have to let that marketplace kick in and it is going to take a little while to get there. Once it does, it is going to be a thing of beauty.”
The coverage losses would begin even before many parts of the Republican plan go into effect. CBO estimates that next year about 14 million fewer people would have insurance, largely because they’d no longer choose to buy it. The losses in coverage after 2018 mainly come from Medicaid, CBO said. By 2026, about 52 million people would be without health insurance. If the Affordable Care Act instead continued, 28 million would be uninsured.
Insurance premiums will be 15 percent to 20 percent higher over the next couple of years, before the GOP replacement plan goes fully into effect. They’d fall after, thanks to more young people signing up and a provision in the bill that lets insurers offer fewer benefits, CBO says. In a decade, premiums are estimated to be 10 percent lower than they would have been under Obamacare.
House Speaker Paul Ryan is trying to skirt opposition from the conservative wing of the party, which has derided the measure as “Obamacare Lite,” and moderates facing angry constituents who face losing care. Several key Republican senators have said they can’t vote for the bill in its current form. Ryan has tried to steel party members against the office’s estimate.
“I’ve been telling our members, just get ready, this is always what happens with CBO,” Ryan told radio host Hugh Hewitt on Friday. “You’re never going to win a coverage beauty contest when it’s free market versus government mandates.”
The push to kill the Affordable Care Act comes after seven years of quixotic votes against it, each vetoed by President Barack Obama. Republicans have said throwing out the law would fulfill key campaign promises and set the stage for a broad rewrite of the tax code. But the measure faces opposition from the American Medical Association and top trade groups for physicians and hospitals, who say it will leave more people uninsured or with limited coverage. And many in the newly empowered party are having second thoughts now that they will be blamed for any failures.
The legislation, called the American Health Care Act, repeals Obamacare’s mandate that everyone must have insurance or pay a penalty. It also provides age-based tax credits to help people purchase coverage, though they’re lower than the income-based subsidies offered under current law. The bill will also wind down Obamacare’s expansion of Medicaid in 2020. About 12 million people gained coverage in the 31 states that expanded Medicaid.
The cost of the new tax credit for health insurance to be established in 2020 is estimated at $361 billion through 2026, according to the CBO. The biggest spending reduction comes from Medicaid, where CBO estimates funding will be reduced by $880 billion over a decade. That’ll lead to about a 17 percent reduction in Medicaid coverage, or 14 million fewer people covered by the program by 2026.
Two key House committees approved the act on Thursday after marathon sessions in which Democrats offered amendments rejected by Republicans. The bill will head next to the Budget Committee before being considered by the full House of Representatives.
Republicans who have downplayed the CBO’s role point out that the office overestimated by several million the number of people who would sign up for insurance through the Obamacare marketplaces.
“They have been woefully underperforming when it comes to evaluating health systems,” Health and Human Services Secretary Tom Price said Friday on MSNBC. “And that’s not because they are bad folks, it’s because this is challenging stuff.”
Still, the CBO did correctly predict other aspects of Obamacare, including premium levels and the cost of subsidies to help people buy insurance, said Douglas Elmendorf, CBO director when the office estimated the effects of Obamacare, which Congress passed in 2010.
Republicans hand-picked the current CBO director, Keith Hall. And Price praised Hall in April 2015, after he and other congressional Republicans had just installed him in the post.
“Keith Hall will bring an impressive level of economic expertise and experience to the Congressional Budget Office,” Price said in a statement at the time. He went on to note Hall’s background in providing Congress with nonpartisan economic analyses at the U.S. International Trade Commission. Hall also served as chief of George W. Bush’s Council of Economic Advisers.
“His vast understanding of economic and labor market policy will be invaluable to the work of CBO and the important role it will continue to play as Congress seeks to enact policies that support a healthy and growing economy,” Price had said.