On May 24, the Congressional Budget Office (CBO) released its analysis - or “score” - of H.R. 1628, the American Health Care Act (AHCA), as passed by the House on May 4, 2017. The CBO score projects that the AHCA would reduce the deficit by $119 billion over 10 years, with the largest savings - $834 billion – coming from reductions in Medicaid spending. For 2018, the CBO calculates that 14 million more individuals would be uninsured as compared with current law, rising to 23 million uninsured by 2026. The increase in uninsured individuals is estimated to be largest among individuals between 50 and 64 years of age with incomes below 200 percent of the Federal Poverty Line (FPL). The CBO forecasts an increase of $43 billion over 10 years for Medicare disproportionate share payments to hospitals.
The Senate Parliamentarian will use this CBO score to evaluate the AHCA for compliance with budget reconciliation requirements, referred to as the “Byrd rule” and named for its author, the late Senator Robert Byrd (D-WV). The “Byrd rule” specifies that only provisions relating to the deficit reduction goals of the budget reconciliation process may be included in reconciliation legislation. This principle may potentially exclude certain insurance reforms that do not affect the Federal budget – such as the purchase of health insurance policies in different States – from being included in the bill.
Republican Senators have been meeting to find a path to 50 votes, and while the House and Senate are not in session this week, staff for the Senate Republican Leadership and for the Committees on Budget; Finance; and Health, Education, Labor, and Pensions are using this time to begin drafting the Senate version of legislation to repeal and replace the Affordable Care Act (ACA). Under the rules of budget reconciliation, any Senate ACA repeal bill will need to save at least as much as the House AHCA bill does, or $119 billion over 10 years.
It is unclear whether the Senate, in crafting its bill, will include the AHCA provision authored by Representative Tom MacArthur (R-NJ) that would give States flexibility to waive essential health benefits, age rating restrictions, and the prohibition on pricing based on health status for applicable plans in that State. The CBO estimates half of the U.S. population resides in States that would not request waivers, resulting in a four-percent lower premium in 2026 than under current law. One-third of the population lives in States that CBO projects would make “moderate changes to market regulations” and would see overall premium reductions of 20 percent in 2026 as compared with current law, “primarily because, on average, insurance policies would provide fewer benefits.” For one-sixth of the population residing in States that opt out of the essential health benefits and community ratings requirements of the ACA, “community-rated premiums would rise over time, and people who are less healthy (including those with preexisting or newly acquired medical conditions) would ultimately be unable to purchase comprehensive non-group health insurance at premiums comparable to those under current law, if they could purchase it at all – despite the additional funding that would be available under H.R. 1628 to help reduce premiums.”
As mentioned above, the CBO estimates that the bill as currently drafted would result in significant drop in coverage for adults ages 50 and 64 with incomes below 200 percent of the FPL – as those individuals could potentially experience rate increases related both to age and health status, while receiving a static level of funding in available tax credits.
The CBO also projected that more than four million individuals would shift from participation in the individual market to employer-based health plans by 2026, receiving coverage through a family member’s employer or through their own.
The updated CBO report on H. R. 1628 is available here.
