CBO projections add fuel to both sides of healthcare debate

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The CBO has projected that the American Health Care Act would increase the number of uninsured Americans by 24 million by 2026, but also cut the federal deficit by $337 billion.

After the Congressional Budget Office released its score of the American Health Care Act on Monday, critics seized on the projections as proof that the bill is bad public policy, while the Trump administration said the CBO painted an inaccurate picture.

The much-anticipated score projected that the AHCA would increase the number of uninsured Americans by 24 million by 2026, but also cut the federal deficit by $337 billion.

Department of Health and Human Services Secretary Tom Price disputed the CBO’s findings, saying that for the coverage reduction of 14 million projected for 2018, the CBO would have to assume 5 million Americans on Medicaid will drop off of health insurance and another 9 million will stop participating in the individual and employer markets.

"These types of assumptions do not translate to the real world, and they do not accurately estimate the effects of this bill," he said in a statement. 

The projections also fail account for the regulatory “relief” his agency would take regarding the Affordable Care Act, he noted.

But Jeff Goldsmith, national policy adviser to the consulting firm Navigant, said in an interview that it’s “hard to argue there’s some partisan plot here” given the fact that the head of the CBO was a Republican appointee. While the CBO has missed the mark in the past in its predictions about the ACA’s effects on the private insurance market, “the argument that they don’t know how to forecast Medicaid spending is a lot harder to defend,” he said.

Jeff Goldsmith

However, Goldsmith does take issue with the 24 million projected to lose insurance, questioning how such a sharp drop could result from the AHCA replacing the ACA’s already-weak penalties for individuals and large employers who don’t enroll in or provide coverage with only slightly weaker penalties.

Even so, “if it’s only 17 million people that lose health insurance instead of 24, it’s an enormous political problem for anyone trying to enact a law like this,” he said.

The bigger surprise to Goldsmith—and potentially even more problematic politically for Republicans—are the CBO’s estimates about how much the ACHA will slash Medicaid funding in the long term.

The bill would reduce the federal contribution to the Medicaid program by $880 billion, the CBO report shows. That also would be followed by a reduction in state funding given provisions written into many states’ Medicaid expansion laws, meaning “at least a trillion dollars that will disappear from the Medicaid system, spread out over only six years,” Goldsmith said.

“It’s just like a giant great white shark bite out of the side of a lot of states,” he added.

Republican House Speaker Paul Ryan, though, characterized the reduction in Medicaid spending as “entitlement reform.” He also pointed out that the CBO estimated the AHCA will reduce individual market premiums, and touted the finding that the bill is likely to trim the deficit.

The American Medical Association, however, was concerned about the CBO’s findings, the group’s president, Andrew Gurman, M.D., said in an emailed statement.

“While the Affordable Care Act was an imperfect law, it was a significant improvement on the status quo at the time, and the AMA believes we need continued progress to expand coverage for the uninsured,” he said. “Unfortunately, the current proposal—as the CBO analysis shows—would result in the most vulnerable population losing their coverage.”

The Alliance of Community Health Plans is also worried that the CBO's estimates mean the new healthcare bill could move the country backwards, President and CEO Ceci Connolly said in a statement. "It’s time to take a step back and thoughtfully consider viable alternatives," she said.

House Democratic Minority Leader Nancy Pelosi, meanwhile, joined others in her party in touting the CBO’s estimates as evidence the law will roll back the progress made by the ACA:

For his part, former Centers for Medicare & Medicaid Acting Administrator Andy Slavitt pointed out some of the divergent narratives surrounding the CBO:

Whatever the reactions from either political party, though, Goldsmith’s conclusion is that the CBO’s estimate just made Republicans’ job that much more difficult.

“Even if you can figure out how to tarnish that headline figure of 24 million people lose coverage, if people are leaning away from voting for this before, there’s more people leaning away from voting for it now,” he said.