by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Most headlines associated with the Congressional Budget Office’s assessment of the proposed American Health Care Act have focused on the likely number of people who would lose health insurance. Ali Meyer of the Washington Free Beacon highlights another less publicized projection.
The American Health Care Act, the Republican replacement to the Affordable Care Act, is estimated to reduce the deficit by $337 billion from 2017 to 2026, according to the Congressional Budget Office’s scoring of the legislation.
During this time, the budget office also projects that spending will be reduced by $1.2 trillion and government revenues will be reduced by $0.9 trillion.
The legislation’s greatest savings come from reducing spending on Medicaid and eliminating the Affordable Care Act’s subsidies.
The budget office says that the new legislation would lower average premiums enough to attract healthy people to stabilize the market, which was one of the reasons why many insurers began to exit the Obamacare exchanges.
“Even though the new tax credits would be structured differently from the current subsidies under current law, the other changes would, in the agencies’ view, lower average premiums enough to attract a sufficient number of relatively healthy people to stabilize the market,” the budget office said.
The budget office projects that average premiums will rise in the short term, rising by 15 to 20 percent in 2018 and 2019. However, by 2026, average premiums will be 10 percent lower than they are now.
In 2018, the budget office projects that 14 million more individuals would become uninsured due to the legislation’s repeal of the individual mandate. These include individuals who may have only bought Obamacare insurance to avoid paying the penalty or those who would avoid purchasing insurance due to higher premiums.
Following 2018, due to changes to the Medicaid program, the budget office projects that by 2026 an estimated 52 million would become uninsured, compared with 28 million that would be uninsured if Obamacare remained in place.
The budget office admits there is uncertainty surrounding these estimates, which has been a popular criticism of the agency in the past.