ACA stabilization bill would lower deficit by $3.8B, CBO says

A calculator up close
The Congressional Budget Office released its analysis of the budgetary effects of the Alexander-Murray bill on Wednesday.

The Senate HELP Committee’s bipartisan Affordable Care Act stabilization bill would lower the federal deficit by $3.8 billion from 2018-2027, according to the Congressional Budget Office.

The CBO released its analysis (PDF) on Wednesday, even as the fate of the bill authored by Sen. Patty Murray, D-Wash., and Sen. Lamar Alexander, R-Tenn., remained uncertain. President Donald Trump has not outright endorsed it, and two GOP lawmakers recently introduced an alternative proposal.

RELATED: CBO says ending cost-sharing reduction payments will increase premiums, federal deficit

Still, the CBO’s estimate could strengthen the argument for passing the bill. Here’s a brief rundown of some of the agency’s key predictions:

  • Allowing more individuals to purchase catastrophic plans starting in 2019 would slightly lower premiums for other individual market plans, reducing the federal cost for ACA subsidies by $1.1 billion from 2019-2017.
  • Since the bill wouldn’t be enacted before the upcoming open enrollment period begins, it would not affect premiums for 2018 plans. Premiums for 2019 would also not change under the legislation, relative to the CBO’s baseline assumption that cost-sharing reductions would be fully funded for that year.
  • However, if there is uncertainty about CSR payments in 2020, the agency expects that insurers would increase premiums in that year relative to its baseline projections.
  • The changes that the bill would make to the rules for state innovation waivers would likely increase the number of applications and their likelihood of approval, but not substantially affect the federal budget.
  • Similarly, while the bill’s additional funding for ACA outreach might increase enrollment and draw in more healthy consumers—thus lowering premiums—the CBO says it doesn’t have a basis to estimate how that might affect the deficit.

Further, the CBO says that the Alexander-Murray bill wouldn’t substantially change the number of people with health insurance—a stark contrast to its estimates for previously introduced ACA repeal bills, which predicted coverage reductions in the tens of millions.

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