by Katherine Restrepo
Director of Health Care Policy, John Locke Foundation
The non-partisan Congressional Budget Office (CBO) has just released its score of the American Health Care Act, the House GOP Obamacare repeal bill. The 28-page document reports that, over a ten-year projection, AHCA will reduce federal deficits by $337 billion. It also estimates that a total of 52 million people by 2026 would be uninsured, compared to 28 million uninsured if Obamacare is still intact at that point in time.
A $935 billion in savings largely comes from changes to Medicaid’s financial design – the state-federal health insurance program that provides medical assistance to low-income children, parents, aged, and disabled. For example, starting in 2020, North Carolina will no longer be able to receive two dollars from the federal government for every one state dollar spent on medical care for certain patient groups. Rather, the feds will begin to cap funding for some patients. Other significant federal deficit reductions come from repealing the federal health law’s cost sharing and premium subsidies for health insurance plans purchased by people who don’t receive benefits through their jobs.
Meanwhile, the $599 billion in costs account for substituting Obamacare’s premium subsidies with age-based refundable tax credits for people without job-based health insurance, and reversing cuts to supplemental payments for hospitals that serve an overwhelming amount of Medicare and Medicaid patients. Scrapping the tax imposed on people and employers for not purchasing federally qualified health coverage is also a cost – resulting in a revenue loss of $210 billion.
The reasons for a major reduction in the number of Americans with health insurance are because states will begin to shoulder a larger amount of Medicaid patient costs for traditional enrollees (children, parents, elderly, disabled), and the federal government plans to phase out its generous “match” rate to pay for new Medicaid expansion enrollees (low-income adults without children) starting in 2020. The end of both the individual and employer mandates is also projected to add to the total increase in the uninsured rate, along with the fact that CBO Director Keith Hall discounts “skimpy” health insurance plans as adequate coverage.
The CBO analysis has arrived in the midst of the first of three necessary parts to enact a new version of health reform.
You can access the full document here. More details to follow…