CBO Projects 24 Million Would Lose Coverage by 2026 Under Republican Health Plan

Up to 24 million people would lose health coverage under the American Health Care Act, the Republican plan to replace the Affordable Care Act (ACA), according to a report released today by the Congressional Budget Office (CBO). That would include up to 14 million in the first year alone, or two-thirds of the 21 million who have gained coverage under the ACA.

The CBO and the staff of the Joint Committee on Taxation found that the bill, which has cleared 2 House committees, would reduce the deficit by $337 billion by 2026. Spending would be reduced by $1.2 trillion and revenues by $900 billion, according to the report. Most of the savings would come from changes to Medicaid and the end to the ACA’s subsidies for buying coverage on the exchanges, which are based on income.

Premiums would rise as well, with average costs for single policyholders in the individual market rising 15% to 20% due to the loss of the subsidies. Fewer healthy people would sign up, the report finds, which has been one of the problems insurers have found under the current ACA. The report estimates that while average premiums would rise until 2020 and then start falling, the effects would vary by age group because of the AHCA’s provision to allow insurers to charge older Americans 5 times as much as younger ones, instead of the cap at 3 times the amount under the current law.  The combination of the changes in premium ratios, the loss of subsidies, and the modest tax credits would hit hardest on those age 50 to 64. While couched in language of "reference premiums," the results are stark: a 64-year-old single person of modest means paying $1700 a year today could see her premium jump to more than $14,000 a year.

One of ACA’s chief benefits was Medicaid expansion, which gave states generous matching funds to extend benefits to those earning up to 138% of the federal poverty line. That rate started at 100% and is still at 90%, and accounts for 12 million of those who gained coverage under the ACA. The Republican plan cuts off the more generous matching rate after December 31, 2019, and the CBO estimates that if the Republican plan passes, 5 million fewer people will be enrolled in Medicaid by 2026, and fewer states that offered Medicaid expansion will continue to do so. The plan also calls for converting Medicaid to a per capita grant program with fewer restrictions.

The report finds that the continuous coverage provision, the bill’s solution to replace the individual mandate, would cause 1 million people to buy coverage in 2018, but would have a different effect after that. Beyond 2018, about 2 million fewer people would by coverage because they would have to pay a surcharge of 30% or provide documentation about previous coverage. And those deterred would be healthier than those who would be willing to pay the higher price or hunt down the paperwork to be insured.

Enrollment Mix. The CBO finds that while the changes in age rating might attract some younger and healthier people to the market in 2019, there would also be a one-year change in the premium tax credits. While the combined effect would improve the risk pool–a goal of insurers–it could also mean they might be challenged to set accurate premiums in 2019 because they would have less experience with this new customer mix.

Reactions Pour In. Georges C. Benjamin, MD, executive director of the American Public Health Association, said the CBO analysis shows that the Republican plan is “a health policy disaster,” and pointed to other elements that call for cuts to the Prevention and Public Health Fund, run by CDC.

“Coverage matters when it comes to preventing disease and ensuring health and well-being. Unfortunately, this bill as written will result in more people losing coverage they desperately need than gained coverage under the Affordable Care Act. We know that the absence of health insurance translates into premature death for many,” he said.

House Energy and Commerce Ranking Member Frank Pallone, D-New Jersey, and Ways and Means Ranking Member Richard Neal, D-Massachusetts, released the following statement: “Today’s CBO report now confirms what we already knew: despite promises that ‘everyone would be covered’ and ‘no one would be worse off,’ this Republican bill would rip away health insurance from 24 million Americans over the next decade and ask millions to pay more for less coverage. … This is a major step backwards for millions of Americans who now enjoy the benefits and protections of the Affordable Care Act.”

While HHS Secretary Tom Price, MD, said his department “strenuously" disagrees with the report, House Speaker Paul Ryan focused on the findings about deficit reduction.

“I recognize and appreciate concerns about making sure people have access to coverage. Under Obamacare, we have seen how government-mandated coverage does not equal access to care, and now the law is collapsing,” Ryan said. “Our plan is not about forcing people to buy expensive, one-size-fits-all coverage. It is about giving people more choices and better access to a plan they want and can afford. When people have more choices, costs go down. That’s what this report shows. And, as we have long said, there will be a stable transition so that no one has the rug pulled out from under them.”