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Congressional Budget Office Score Of Health Care Bill Is More Bad News For GOP

congress-healthcare

The Congressional Budget Office came out with its score for the revised version of the American Health Care Act, the replacement for the Affordable Care Act that barely passed the House of Representatives earlier this month, and it’s most assuredly not good news for the bill:

WASHINGTON — A bill to dismantle the Affordable Care Act that narrowly passed the House this month would leave 14 million more people uninsured next year than under President Barack Obama’s health law — and 23 million more in 2026, the Congressional Budget Office said Wednesday. Some of the nation’s sickest would pay much more for health care.

Under the House bill, the number of uninsured would be slightly lower, but deficits would be somewhat higher, than the budget office estimated before Republican leaders made a series of changes to win enough votes for passage. Beneath the headline-grabbing numbers, those legislative tweaks would bring huge changes to the American health care system.

In many states, insurance costs could soar for consumers who are sick or have pre-existing conditions, while premiums would fall for the healthy, the new estimate concludes.

The forecast by the nonpartisan Congressional Budget Office, Capitol Hill’s official scorekeeper, is another potential blow to efforts to undo Mr. Obama’s signature domestic achievement. Republican senators have said they will make substantial changes to the measure passed by the House, but even Senator Mitch McConnell of Kentucky, the majority leader, sounds uncertain about his chances of finding a majority to repeal and replace the health law.

“I don’t know how we get to 50 at the moment,” Mr. McConnell told Reuters on Wednesday. “But that’s the goal.”

In states that obtain waivers from certain health insurance mandates, “premiums would vary significantly according to health status and the types of benefits provided, and less healthy people would face extremely high premiums,” the budget office said.

In addition, it said, “out-of-pocket spending on maternity care and mental health and substance abuse services could increase by thousands of dollars.”

The new report is sure to influence Republican senators, who are writing their own version of the legislation behind closed doors. The report provided fresh ammunition for Democrats trying to kill the repeal bill, which they have derided as “Trumpcare.”

House Republican leaders, who pushed the bill through their chamber before the budget office could complete its final estimate, focused on the deficit reduction still on offer. The House bill would reduce federal budget deficits by $119 billion over a decade, less than the $150 billion in savings projected in late March for an earlier version of the bill, but still substantial, Republicans said.

Republicans in Congress generally focus more on reducing health costs than on expanding coverage. Their proposals will inevitably cover fewer people than the Affordable Care Act, they say, because they will not compel people to buy insurance.

But critics zeroed in on a bifurcated health care system that the bill could create: Those who are sick, at risk of getting sick or nearing retirement would pay more, while those who are young and healthy would pay less. In states that obtain waivers from rules mandating essential health coverage at uniform rates, the legislation could put insurance economically out of reach for some sick consumers.

“Unless you’re a healthy millionaire, Trumpcare is a nightmare,” said Senator Chuck Schumer of New York, the minority leader. “This report ought to be the final nail in the coffin of the Republican effort to sabotage our health care system.”

Insurance is, by definition, a pooling of risks, but the budget office said the House bill could cause a fragmentation of the market.

The budget office report indicates that the House bill would wipe out gains in coverage made in the last three

“In 2026,” it said, “an estimated 51 million people under age 65 would be uninsured, compared with 28 million who would lack insurance that year under current law.”

(…)

The new report tends to validate criticism of the House Republican bill by AARP and other advocates for older Americans. “For older people with lower income, net premiums” — after tax credits — “would be much larger than under current law, on average,” the budget office said. As an example, it said, for a typical 64-year-old with an annual income of $26,500, the net premium in 2026 would average about $16,000 a year, compared with $1,700 under the Affordable Care Act.

The bill would reduce projected spending on Medicaid, the program for low-income people, by $834 billion over 10 years, and 14 million fewer people would be covered by Medicaid in 2026 — a reduction of about 17 percent from the enrollment expected under current law, the budget office said.

In a separate report, the congressional Joint Committee on Taxation said Wednesday that the House bill would cut taxes for high-income people by $230 billion over 10 years. The bill would repeal provisions of the Affordable Care Act that increased the payroll tax rate for many high-income taxpayers and imposed a surtax on their net investment income.

Under the House bill, the budget office said, uninsured people could keep $38 billion that they would otherwise have to pay in penalties over the next 10 years. The bill would also eliminate penalties for larger employers that fail to offer coverage to their employees, and as a result, the budget office said, the government would lose $171 billion in penalty payments from them.

These numbers aren’t really much of a surprise, of course, and they aren’t very different from the initial score of the AHCA that was released in March. In that report, the CBO estimated that 24 million people would lose health insurance coverage under the Republican plan, in some cases because they would voluntarily choose not to purchase it but in others because they would be priced out of the market. This estimate reduces that number slightly to 23 million, but that, of course, is still a substantial number that is unlikely to help Republicans trying to sell the plan to an already skeptical public. Additionally, the revised bill actually reduces the amount by which the bill would cut the deficit from $150 billion over ten years to $119 billion over the same period. This would happen at the same time that the bill would provide a substantial tax cut to wealthy Americans. Finally, as Jennifer Rubin and FiveThirtyEight both note, the bill would substantially increase the cost of insurance for people with pre-existing conditions notwithstanding the alleged fix contained in the revised bill that would allow states to set up high-risk pools to cover insurance costs for such persons.

Politically, this is all bad news for Republicans, as Chris Cillizza notes:

There are two big bottom line numbers in this CBO report: 23 million and $119 billion. The question is which matters more: The delta between how many people Obamacare is covering and how many Trumpcare is projected to cover OR the money the country is saving on the debt.

One of these things is an esoteric number. The other is a real-world one. And the latter beats out the former every single time in campaigns.

Consider that for the average person our national deficit is a very, very hard concept to grasp. Sure, we owe lots of money. And, sure, owing that money — particularly to China! — is a bad thing. But, the size of the deficit is not something that has a day in, day out impact on most peoples’ lives. In fact, I’d be willing to wager a large sum of money that the vast majority of people in the country don’t think about the federal deficit more than once a year — if that.

Health care — particularly access to it — is something that touches large swaths of the country on a weekly or monthly — if not daily — basis. It’s something that every single person in the country has experience — and often frustration — with. The idea that 23 million people who would have health care if President Trump and Congressional Republicans do nothing will lose it under Trumpcare is going to be an extremely difficult case to make.

Add to that the fact that House Republicans passed the bill without even knowing how much it would cost or how many people it would leave uninsured makes it all the worse politically speaking.

Imagine this ad running against and endangered House Republican who voted for the AHCA: “Congressman X voted for Donald Trump’s health care plan before he even knew what the bill would do. Now, a non-partisan budgeting agency say the legislation will eliminate health care options for 23 million people.”

Pretty damning, right?

In reality, of course, this score is somewhat irrelevant. It’s already clear that the House bill is “dead on arrival” in the Senate and that the upper chamber is going to have its own say regarding health care reform. At this point, it’s not even clear that Republicans will be able to get the votes they need to pass such a bill, but whatever passes will most likely resemble the AHCA in name only. The manner in which the House bill treats the pre-existing conditions coverage mandate, for example, seems unlikely to survive in the Senate. Additionally, several Republican Senators have expressed concern about the manner in which the House bill would impact the expansion of Medicaid in states that have already chosen to take advantage of that part of the Affordable Care Act. Under the House version of the bill, the financial burden for that portion of the bill would essentially be shifted to the states, most of whom would be unable to afford the additional costs of covering millions of people while at the same time balancing their budgets as required by law. Finally, it’s likely that the extent to which the House bill represents more of a tax cut for the wealthy than a health care reform bill is likely to come under scrutiny. For all of these reasons, the score we’re seeing now from the CBO score is really rather irrelevant. What will matter will be the score for whatever bill the Senate manages to put together if it can even get that far, and then the score for whatever compromise bill makes it through a House-Senate Conference Committee, again assuming that ever happens.

All of that being said, the immediate politics of this score are likely to work against Congressional Republicans who put their necks on the line to pass a bill that isn’t going to survive the Senate to begin with. For the next several months at least, they’ll be asked at town halls and other venues to defend a bill that will result in tens of millions of people losing insurance and will result in increased insurance and health care costs for people with pre-existing conditions. With polls already showing Republicans on the defensive across the country, this is hardly going to make things easy for the GOP, and is likely to make many Members of Congress wonder why they bothered to support a bill that had no chance of survival to begin with.

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About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May, 2010 and also writes at Below The Beltway. Follow Doug on Twitter | Facebook

Comments

  1. Scott says:

    You hit all the highlights (or are they lowlights) here. A few other comments:

    Medicaid takes the big hit. What is not highlighted is that a substantial part of Medicaid is nursing home care. The low income elderly take a big hit here.

    As pointed out, this is a tax cut bill disguised as a healthcare bill. A lot of bleating goes on about passing on debt to the grandchildren yet we are talking about tax cuts. This from the same crowd who has refused to pay for 15 years of warfare through taxes. Kind of pointless to demonstrate the hypocrisy here.

    One thing I’ve never bought into is that the states can do a better job on the healthcare front because they are closer to the people. Why in the world should my healthcare be dependent on which state I’m in. Watching our Texas legislature wind down there biennial session, there is no way I would trust those yahoos in Austin with my healthcare.

    Like or Dislike: Thumb up 9 Thumb down 0

  2. David M says:

    It’s worth mentioning the AHCA is much more of a one size fits all solution than the current system. It basically ignores insurance differences between coverage areas, and won’t be able to handle differences in Medicaid needs.

    Like or Dislike: Thumb up 3 Thumb down 0

  3. Daryl's other brother Darryl says:

    @Scott:

    One thing I’ve never bought into is that the states can do a better job on the healthcare front because they are closer to the people.

    The most dangerous aspect of this is the race to the bottom. Whatever state produces the laxest regulations is where the insurance companies will go. There is a reason all the credit card companies are in Delaware. The Republican bill makes this outcome explicit.

    Like or Dislike: Thumb up 3 Thumb down 0

  4. Pete S says:

    This report was completely expected, there was a very good reason why they wanted to rush the passage. No reasonable person would expect a couple of tweaks to materially change the impact of the legislation. I still don’t think it is bad news for the GOP. For the GOP to lose support we would need to see a large number of GOP voters who:

    a. Read the report or see a summary from an honest source.
    b. Understand the information.
    c. Get upset enough to not vote for their GOP candidates.

    How many people are we really talking about here? The full effects of this bill won’t be felt for 10 years or more. By that point it will be too late to be showing images of Donald Trump and his party dancing on the White House lawn after they passed this monstrosity.

    Like or Dislike: Thumb up 9 Thumb down 0

  5. Moosebreath says:

    @Scott:

    “The low income elderly take a big hit here.”

    Given that nursing home care can run upwards of $60,000 per year, it’s not just the low income elderly who take the hit.

    Like or Dislike: Thumb up 9 Thumb down 0

  6. al-Alameda says:

    … Meanwhile Paul Ryan can hardly contain his glee, he’s out there telling us that he’s very pleased with the deficit and premium reduction aspects of the bill.

    Like or Dislike: Thumb up 4 Thumb down 0

  7. Gromitt Gunn says:

    @Moosebreath: Very few Americans truly understand the economics of end-of-life care in the U.S. until they experience it first hand. The vast majority of elderly Americans will end up drawing down their assets and putting themselves into poverty in order to qualify for perpetual home healthcare and/or to live in a skilled nursing facility for their last few days / weeks / months.

    This will only accelerate as fewer and fewer companies are willing to issue long term care policies due to the inability to effectively contain costs while complying with the contract provisions. The only decent alternative is to save enough money to buy into a Continuing Care Retirement Community, which is cost prohibitive for many people. $250,000 – 500,000 upfront buy in costs, in addition to monthly charges, are not uncommon.

    Like or Dislike: Thumb up 3 Thumb down 0

  8. john430 says:

    The devil is always in the details. Like: The principal author of the CBO report is Patricia Holly Harvey. who helped write Hillarycare. Additionally, the CBO is using the “uninsured” baseline of March 16 which they had already acknowledged was “totally off”.

    In other news, Blue Cross is pulling out of Obamacare in MO after losing $100 million in 3 years.

    Poorly-rated. Helpful or Unhelpful: Thumb up 0 Thumb down 15

  9. Gromitt Gunn says:

    @john430: Yes, clearly it is the Democrats’ (who hold no power at the moment) fault that the Congressional Budget Office wrote a fact-based report. /eyeroll

    Like or Dislike: Thumb up 9 Thumb down 0

  10. David M says:

    @john430:

    Keith Hall is the head of the CBO. He is a Republican and took office in 2015, and was picked by the GOP. Obviously a Democratic plant.

    The current Obamacare problems are primarily due to GOP sabotage.

    Like or Dislike: Thumb up 10 Thumb down 0

  11. Hal_10000 says:

    @john430:

    Obamacare having problems does not make the AHCA acceptable. The GOP needs to work the problem, not play around in fantasyland. One thing I’ve heard rumors is automatic enrollment — that is automatically enroll uninsured young people in very basic insurance plans for a premium equal to the tax penalty. If the GOP can get their own caucus on board, the Democrats would probably go for it. And it would go a long way toward fixing Obamacare’s problems, or at least stave off collapse for more fixes.

    As for the CBO and their projections … I’m an astronomer. I frequently deal with models of complex systems. What I like to say is that those models are sometimes wrong but they are frequently illuminating. They allow you to figure out important problems, realize which issues matter and which don’t. They’re not designed to predict anything perfectly; they’re designed to give you broad ideas about what questions are important.

    CBO is the same way. Their projections are frequently off (as they acknowledge) but they are also illuminating. They’re a guess, but an educated one. Maybe 23 million people won’t lose insurance. But it’s very likely to be a lot of people. And they cast serious doubt on the GOP’s high-risk-pool plan for pre-existing conditions.

    Like or Dislike: Thumb up 6 Thumb down 0

  12. Scott says:

    @john430: People who say CBO numbers are off or are not accurate must present their own numbers. And show their work.

    Like or Dislike: Thumb up 9 Thumb down 0

  13. john430 says:

    @David M: GOP sabotage? What color is the sky on your world?

    Like or Dislike: Thumb up 0 Thumb down 7

  14. Pch101 says:

    So Republicans don’t understand business, finance, insurance, healthcare or economics. Who knew?

    Like or Dislike: Thumb up 4 Thumb down 0

  15. David M says:

    @john430:

    It’s well known. Refusing to appropriate funds for CSR payments, delaying the risk corridor payments, not expanding Medicaid, constantly threatening to repeal it and throw the insurance markets into chaos..

    Like or Dislike: Thumb up 9 Thumb down 0

  16. DrDaveT says:

    @Pch101:

    So Republicans don’t understand business, finance, insurance, healthcare or economics. Who knew?

    You forgot physics, biology, chemistry, sociology, psychology, history, and arithmetic.

    Like or Dislike: Thumb up 4 Thumb down 1

  17. Franklin says:

    @Scott:

    … nursing home care. The low income elderly take a big hit here.

    Well maybe those a-holes should work harder and pay their own way! What have they ever done to deserve this “health care” thing?

    Like or Dislike: Thumb up 2 Thumb down 0

  18. Mikey says:

    @Franklin: No shit. It’s their own fault for getting old in the first place. Why should we young people be responsible for their mistake?

    Like or Dislike: Thumb up 3 Thumb down 0

  19. Pete S says:

    @DrDaveT: I think they are a little weak on religion too, most claim to be Christian but there is no evidence of it in their policies.

    Like or Dislike: Thumb up 0 Thumb down 0

  20. john430 says:

    @Scott: Why should I spoon feed your pablum to you? Get off your arse and investigate the reality of things.

    Like or Dislike: Thumb up 0 Thumb down 0