CBO Estimates Senate ACA Repeal Bill Would Reduce Federal Deficit by $321 Billion, Drop 22 Million From Health Insurance

The Senate Republicans’ bill to repeal and replace the Affordable Care Act (ACA) would result in the loss of health insurance for 22 million Americans in 2026 relative to the number who would be insured under current law, according to the nonpartisan Congressional Budget Office’s (CBO) report. The CBO previously estimated that the House version of the bill, which passed in May, would result in 23 million Americans losing health insurance coverage. The report also found that, as soon as 2018, 15 million more people would be uninsured relative to current law. The legislation would decrease the federal deficit by $321 billion over 10 years.

Senate leaders today postponed a vote on the bill until after the July 4th congressional recess. With Democrats united against the legislation, there can be no more than 2 Republicans voting with Democrats against the motion to proceed. Currently, 4 Republicans have opposed the motion; 2 others have not yet declared opposition, but may also decide to oppose.

Among the key features of the Better Care Reconciliation Act of 2017 (BCRA) are the following:

• If passed, the Senate Republicans’ bill includes a massive cut in Medicaid spending ($772 billion), a 26% decline compared with current law. Cuts to the Medicaid program disproportionately affect children, according to the Children’s Hospital Association, because the program provides insurance to 35 million children—about half of all Medicaid enrollees. The BCRA also would cut $408 billion in reduced subsidies for individuals in the health insurance exchanges.

• Premiums and out-of-pocket expenses would skyrocket for low-income people as well as for older people who are nearing retirement—in the 50- to 64-year-old age group—and not yet eligible for Medicare. The new bill would allow insurers to charge older Americans 5 times as much as they charge younger people for health insurance. (The ACA had capped such rates at 3 times the rate charged to younger people.) For example, a 64-year-old with an annual income of $26,500 would pay, after subsidies, a net premium for a mid-level health plan of $6500. Under the ACA, he would have been charged $1700 for the same plan. For a 64-year-old with an annual income of $56,800, the new premium would average $20,500 per year—3 times higher than under the ACA.

• The Senate bill removes the ACA’s insurance mandate (as well as employer mandates) but penalizes people who go without health insurance by requiring them to wait 6 months before coverage would begin under a newly purchased policy. The waiting period would be imposed on people who lacked coverage for more than 2 months during the previous year, and would further impose a 30% surcharge on premiums for those who went without insurance. The waiting period was added to the bill because the BCRA still retains the ACA’s bar on insurers denying coverage to those with pre-existing conditions, and the waiting period is meant to prevent people from waiting until they get sick to buy a plan.

• Like the House version of the healthcare bill, the Senate bill includes per-capita caps to lower Medicaid spending (with an option for states to choose block grants), and a provision allowing states to impose work requirements on Medicaid recipients. It would also make it much easier for states to get waivers exempting them from federal rules requiring insurers to cover minimum essential health benefits. Approximately half of all Americans could be affected by these cutbacks—which include coverage for maternity care, mental health care, rehabilitation services, and certain drugs.

The BCRA is opposed by many healthcare groups, including the American Medical Association and every major hospital association. Hospitals focused their concerns on proposed cuts to Medicaid, which provides health insurance to 73 million low-income and disabled Americans who would otherwise have no health insurance when they require hospitalization. The National Rural Health Association noted that small hospitals and rural hospitals are already struggling to “keep their lights on” and rely on Medicaid payments to survive.