WASHINGTON -- Approximately 14 million people would lose their health insurance in 2018 if the congressional Republicans' proposal to replace the Affordable Care Act (ACA) becomes law, the Congressional Budget Office (CBO) said Tuesday.
The CBO, long considered a neutral arbiter for outlining the effect of legislation, also said the (AHCA) -- currently in the form of two bills, each approved by a different House committee -- would reduce the deficit by $337 billion over the 2017-2026 period.
"The largest savings would come from reductions in outlays for Medicaid and from the elimination of the Affordable Care Act's (ACA's) subsidies for nongroup health insurance," noted. "The largest costs would come from repealing many of the changes the ACA made to the Internal Revenue Code -- including an increase in the Hospital Insurance payroll tax rate for high-income taxpayers, a surtax on those taxpayers' net investment income, and annual fees imposed on health insurers -- and from the establishment of a new tax credit for health insurance."
The Republican proposal would change the current Medicaid program -- under which states are given matching funds by the federal government which vary depending on how much each state spends on its Medicaid program -- to a "per-capita cap" program, in which states would get a fixed amount of federal funds for each Medicaid beneficiary. It would also end the Medicaid expansion launched under the ACA by freezing enrollment in that program starting in 2020.
Most of the increase in the number of uninsured people "would stem from repealing the penalties associated with the individual mandate," the report said. "Some of those people would choose not to have insurance because they chose to be covered by insurance under current law only to avoid paying the penalties, and some people would forgo insurance in response to higher premiums. Later, following additional changes to subsidies for insurance purchased in the nongroup market and to the Medicaid program, the increase in the number of uninsured people relative to the number under current law would rise to 21 million in 2020 and then to 24 million in 2026."
The Trump Administration slammed the report. "The CBO looked at a portion of our plan but not the entire plan," Health and Human Services (HHS) Secretary , said at a press conference. "In fact, the entire plan includes the regulatory apparatus at HHS ... that we want to use to make sure patients are helped and their costs are decreased."
"They also completely ignored the other legislative activities we'll be putting into place to make sure we have an insurance market that actually works. So we disagree strenuously with the report; we below our plan will cover more individual at a lower cost and give them the choices they want for the coverage they want for themselves and their families, not what the government forces them to buy."
The reforms would probably have little effect on the stability of the health insurance market, according to the CBO, which prepared the report along with the Joint Committee on Taxation; the report's authors said they thought the market would remain stable either under current law or with the Republican changes.
As for health insurance premiums, the report estimated that in 2018 and 2019, average premiums for single policy-holders on the individual market "would be 15%-to-20% higher than under current law, mainly because the individual mandate penalties would be eliminated, inducing fewer comparatively healthy people to sign up." However, the report continued, after that the increase would be more than offset because of a grant program in the legislation that the CBO thinks states will use to limit insurers' costs for high-cost enrollees, the elimination of the ACA's "actuarial value" requirement that the plans insurers offer must cover a certain percentage of the benefits' costs, and a younger mix of enrollees.
In addition, the effect on premiums would vary greatly by age group under the replacement plan since insurers would now be able to charge older enrollees five times more than younger ones, instead of three times more as allowed under the ACA, "substantially reducing premiums for young adults and substantially raising premiums for older people," the report said.
The report's conclusions "come as a surprise to no one," said , professor of health management and policy at Drexel University in Philadelphia. "The AHCA fails to address any of the shortcomings in the ACA and simply cuts coverage for millions of people. Now we know how many."
"Building a plan to help millions of people afford healthcare is difficult. Destroying it is easy," he said. "That's because healthcare in complicated. Who knew? Clearly not the people who drafted this law."
, of Harvard University in Cambridge, Mass, said in an email that the report is "a non-partisan reasonable estimate of the impact of the AHCA. It demonstrates that the AHCA does what it was intended to do; it lowers federal spending and reduces the number of people with health insurance. As the report notes, there's a lot of uncertainty. But directionally these results are almost surely right."
These results suggest that congressional Republicans will need to go back to the drawing board on their replacement plan, , a senior fellow at Project HOPE in Bethesda, Md., said in an email. "It's hard to imagine the majority of Republican members of Congress wanting to run in 2018 if these CBO estimates are approximately near correct."