CBO details AHCA impact on marketplace premiums; industry calls on Senate to preserve ACA coverage gains

American Health Care Act document
Though the GOP is focusing on the positives in the CBO report, major provider groups reiterated concerns about its coverage reductions. Getty/designer491

Though the Congressional Budget Office projects that millions could lose their insurance coverage under the American Health Care Act, Republican leaders are focusing on the good news in the report: deficit reductions and lower premiums.

House Speaker Paul Ryan, R-Wis., said in a statement that the CBO’s score reaffirms the bill’s goal, and that the score’s projections for reduced premiums are a “positive step toward keeping our promise to repeal and replace” the Affordable Care Act.

“We are on a rescue mission to bring down the cost of coverage and make sure families have access to affordable care,” Ryan said.

“This CBO report again confirms that the American Health Care Act achieves our mission: lowering premiums and lowering the deficit.”

The CBO estimated that 23 million people would lose their insurance coverage by 2026, a slight decrease from the 24 million estimate for previous versions of the bill. And while it said the premium decreases were likely on average, its projections were not quite so cut-and-dried.

RELATED: CBO releases score for Republican healthcare bill, estimates that 23M will lose insurance by 2026

Beginning in 2020, premiums in the individual markets would be impacted by how states choose to take advantage of waivers for the ACA’s essential health benefits or community rating.

For states that would not take either type of waivers, the CBO estimated that average premiums would be 4% lower in 2026 than they are now. It projects that about half the population lives in states that would not take any waivers for these health plans, and that premiums would decrease more for younger people while likely increasing for older people.

States that make moderate changes to their individual marketplaces would see premiums decrease on average by about 20% by 2026 compared to current levels. This would likely impact about a third of the population, with higher decreases for younger, healthier people and significantly lower decreases for older, sicker enrollees.

The final sixth of the U.S. population lives in states that would likely take both types of waivers, according to the CBO. On average, in these states premiums would be lower, but rates would vary widely between health status and the type of benefits offered, with older, sicker people particularly at risk for skyrocketing premiums. For instance, the report projects that seniors making $26,500 or less in these states could see premiums rise by 800%.

This is an alarming figure, Richard Besser, CEO of the Robert Wood Johnson Foundation, told FierceHealthcare in an interview, especially as the U.S. population is aging. The cost for treating disease goes up as people age, and sharp premium increases like this could leave some of the most vulnerable people in the country priced out of the insurance market.

“We are saying that their health doesn’t really matter,” Besser said.

The AHCA’s supporters are also pointing out that the CBO incorrectly projected the number of people who would gain insurance under the ACA.

“The CBO was wrong when they analyzed Obamacare’s effect on cost and coverage, and they are wrong again,” Department of Health and Human Services Secretary Tom Price said in a statement. “In reality, Americans are paying more for fewer healthcare choices because of Obamacare, and that’s why the Trump Administration is committed to reforming healthcare.”

Industry groups respond to the CBO report

Healthcare industry groups have been less than enthusiastic about the AHCA since its inception, and the CBO score reinforces concerns that many Americans would lose insurance coverage. In a statement, American Hospital Association President Rick Pollack urged the Senate to take an approach to health reform that prevents people from losing coverage.

“As we have said, any health reforms must be guided by ensuring that millions of people across the country don't lose access to their health care coverage,” Pollack said. “We cannot support legislation that the CBO clearly indicates would jeopardize that coverage for millions of Americans.”

RELATED: House gives green light to amended AHCA; hospital, industry executives disappointed but not surprised

American Medical Association President Andrew W. Gurman, M.D., echoed the AHA’s calls for the Senate to preserve the ACA’s coverage gains.

“Today’s estimates from the nonpartisan Congressional Budget Office show that last-minute changes to the AHCA made by the House offered no real improvements,” Gurman said in a statement. “Millions of Americans will become uninsured—with low-income families on Medicaid being hit the hardest.”

American Nurses Association Executive Director Debbie Dawson Hatmaker, R.N., said in a statement to FierceHealthcare that the CBO score “confirms what we’ve known all along.” 

“The AHCA is bad for America’s health and is a step in the wrong direction,” Hatmaker said. “Nurses oppose AHCA. It is departure from ANA’s priorities. We continue to express serious concerns about its failure to make healthcare more affordable and about the 23 million people who stand to lose insurance coverage.”

The Senate is expected to significantly moderate the AHCA in its version of the bill, particularly in regard to sweeping Medicaid cuts, but its GOP members are divided on how to best approach Medicaid and consumer protections in the ACA. Some senators, particularly those that represent states that expanded the program, are trying to find avenues to preserve it.

RELATED: Ted Cruz, GOP senators from Medicaid expansion states will play major role in healthcare bill rewrite

Besser told FierceHealthcare that uncompensated care burdens on providers were shown to decrease under the ACA, so the financial implications of millions of patients losing insurance coverage could be severe.

“You really have to worry about what the impact will be in hospitals in particular that expect more patients who are sicker,” he said.

Another area for concern for providers is the AHCA’s changes to the essential health benefits could decrease access to substance abuse treatment, which is especially worrying in light of the ongoing opioid epidemic across the country. Besser said the opioid problem touches every community in the nation—cities and rural areas, red states and blue states—so reducing access to needed treatment is “unacceptable.”

“We need to ensure that substance abuse treatment, mental health services, all these things are not viewed as add-ons, but as essential parts,” Besser said.

Public reaction to the AHCA has also been quite negative; Public Policy Polling last week reported that just a quarter of American voters view it positively. And voters are growing tired of the ongoing debate about health reform, too, as PPP reports just 29% now want to repeal the ACA and 64% prefer to keep the law in place and instead repair it.

Janet Murguia, president and CEO of the National Council of La Raza, a Hispanic civil rights and advocacy group, said in a statement that “it’s no surprise” that the public also rejects the bill.

“Almost everyone knows someone who has gained coverage through the ACA and has experienced the benefits of health insurance,” she said. “The CBO score is yet another reminder of what is at stake and why we are in this fight.”

“We cannot afford to go back to the days when children were rushed to the emergency room rather than the pediatrician, and when medical bills pushed families into bankruptcy. That’s the vision of America that Donald Trump is fighting so hard to put in place,” she added.