CBO: Republican healthcare bill would reduce federal deficit—but millions fewer would have insurance coverage

The Congressional Budget Office on Monday released its highly anticipated score of House Republicans’ healthcare bill, finding that it would increase the number of uninsured individuals by millions, but also lower individual market premiums in the long run and decrease the federal deficit.

Congress uses the CBO’s cost estimates to evaluate the effects of any major legislation, and policymakers were particularly eager to get its estimate for the American Health Care Act given the high political stakes associated with the bill.

Here’s a brief rundown of the CBO’s estimates:

  • In 2018, 14 million more people would be uninsured under the GOP bill than under the Affordable Care Act—mostly due to the repeal of the individual mandate penalties. By 2026, that number would swell to 24 million because of changes to subsidies in the individual market and in the Medicaid program.
  • Relative to projections for the ACA, the Republicans’ bill would lead to higher average premiums in the individual market before 2020—15% in 2018 and 20% in 2019—and lower average premiums after that. The CBO notes, though, that premium changes under the new proposal would differ “significantly” for people of different ages, given the bill’s provision that allows insurers to charge older customers up to five times more for coverage.
  • Enacting the legislation would reduce federal deficits by $337 billion from 2017 to 2026, with the largest savings coming from reductions in Medicaid spending and eliminating the ACA’s subsidies for individual market customers. The largest costs, on the other hand, would come from the bill’s elimination of many of the ACA’s taxes and its creation of a new tax credit for health insurance.
  • The CBO estimates that the individual market would probably be stable in most areas under either the ACA or the AHCA. While tax credits under the newly proposed bill would be less generous than the ACA’s subsidies, other changes such as grants to states from the Patient and State Stability Fund would lower average premiums enough “to attract a sufficient number of relatively healthy people to stabilize the market,” the agency said.

Before the score emerged, the Trump administration had already cast doubt on the merits of the CBO’s projections. White House Press Secretary Sean Spicer pointed out during a press briefing Monday that the agency had originally projected 24 million people would be enrolled through the Affordable Care Act exchanges as of 2016, but the number ended up being only about 10.4 million.

“The CBO was off by more than half last time,” he said.

Later, he acknowledged that some senators are likely to look at the CBO’s score when evaluating the American Health Care Act, and it’s important to remind them of the agency’s past track record.

Previously, The Commonwealth Fund issued an analysis that sought to dispel such criticism of the agency’s estimates about the ACA. It concluded that while the CBO overestimated marketplace enrollment and costs and underestimated Medicaid enrollment, overall its projections were “reasonably accurate,” and closer to realized experience than the estimates of many other prominent forecasters.