CBO Score Finds 22 Million People Will Lose Health Coverage

June 27, 2017 - UPDATE: GOP Senators delayed the vote on the BCRA until after the July 4th congressional recess. 

The Congressional Budget Office (CBO) released their revised cost estimate on the new ACA repeal bill, the Better Care and Reconciliation Act of 2017 (BCRA), and found that a total of 22 million Americans will lose healthcare coverage by the year 2026 compared to the number who would be insured under current law.

Under the House bill known as the American Health Care Act (AHCA), the CBO estimated that between 21 and 24 million Americans who rely on the Medicaid expansion will become uninsured between 2018 and 2026. Under the new bill that was revised by GOP Senate leaders, that estimate stays more or less the same.

The AMA, AHA, and the Academy of Family Physicians (AAFP) among many others, have voiced their concerns about the impact of the bill on some of the most vulnerable communities in the country.

The Senate bill will also grant states discretionary power to determine what constitutes an essential health benefit, such as cancer or prenatal care, which under the ACA are universally guaranteed for coverage.

READ MORE: The Progress and Challenges of the Affordable Care Act

“We are concerned that by rushing to a mark-up tomorrow in the Energy and Commerce and Ways and Means Committees, there will be insufficient time to obtain non-partisan estimates of this legislation’s impact by the CBO, or for medical organizations like ours and other key stakeholders in the healthcare community to offer substantive input on the bill,” the AAFP said of the House bill.

The BCRA is geared towards a reduction in federal spending.  The CBO acknowledges that the federal budget would benefit from the bill. The CBO and the Joint Committee on Taxation (JCT) estimate that between 2017 and 2026, the legislation would reduce direct federal spending by $1.02 trillion and reduce federal revenues by $701 billion for a net savings of $321 billion.

The largest savings would come from drastic cuts in Medicaid, as the program is expected to decline in spending by 26 percent up to the year 2026. These cuts affect the Medicaid expansion that help those in the lowest income categories, as well children, seniors, and the disabled, to receive coverage.

People with incomes of 175 percent under the federal poverty line (FLP) would pay on average a net premium of $1,600 for coverage, where the plan’s actuarial value could only pay for 58 percent of healthcare services. This means that many low-income people would pay more money for plans that cover fewer healthcare services. Individuals with even lower incomes under the FLP may not purchase a plan because the deductibles by themselves would take up a majority of their incomes.

“Those changes, CBO and JCT estimate, would contribute significantly to a reduction in the number of lower-income people who would obtain coverage through the nongroup market under this legislation, compared with the number under current law,” the CBO said.

READ MORE: AHCA CBO Score Predicts 23M Uninsured, Higher Out-of-Pocket Costs

These Medicaid cuts will require states who voluntarily want to participate in the program to find their own ways to fund it, such as with block grant options, which are capped amounts of Medicaid dollars. States would contribute between 18 and 35 percent of the grant themselves. The bill would also allow states to set work requirements in order to receive Medicaid coverage. Both programs were part of the AHCA.

While cuts to Medicaid s would save the federal government money overall, the BRCA contains provisions that would continue government spending on certain healthcare programs.

Under the BRCA, the federal government would provide some states $8 billion dollar allotments for CHIP programs and $2 billion in grants to combat opioid abuse. Another $4 billion would be spent on the Community Health Center Program which provides support to facilities that give primary and preventative care to patients who can’t afford regular healthcare services.

However, the CBO estimates that the largest increases in deficits come from repealing or altering tax provisions in the ACA that are not directly related to health insurance coverage, including the repeal of surtaxes on net investment incomes and annual fees imposed on health insurers.

In general, CBO and JCT believe that the health insurance market would be stable for relatively healthy people in most of the country, even though premium tax credits to purchase insurance would be smaller than the AHCA tax credits.

READ MORE: Senate Has Released Bill to Revise ACA Repeal Legislation

Either the AHCA or the BCRA will drastically affect how people purchase health care coverage, and whether or not they’ll even have the option to purchase.

“Under both versions of the legislation, about half the population would be in states substantially affected by waivers to provisions of the ACA,” the estimators concluded. “Under this legislation, because many people in the nongroup market would be paying premiums based on their income, CBO and JCT expect that there would be less pressure to try to lower premiums by using waivers to narrow the scope of the essential health benefits than under the House-passed legislation.”