One doesn’t have to read very far into the Congressional Budget Office’s eagerly awaited assessment of the impact of the House GOP’s Obamacare repeal bill that was released Monday afternoon. It’s right there on Page 2: With the repeal, 52 million Americans would be uninsured by 2026, compared to 28 million under the current law.
Translation: The GOP repeal would cost 24 million Americans their health insurance.
Moreover, premiums would rise by 15% to 20% in the first two years after repeal, the CBO says. They would fall thereafter, compared to their level under current law. But that’s largely because the repeal measure would allow insurers to offer junkier insurance by eliminating requirements that qualified plans cover a specified percentage of medical costs.
For anyone believing in the principle that the goal of government healthcare reform should be decreasing the ranks of the uninsured, this report looks devastating. The American Health Care Act, which is the GOP’s moniker for its repeal plan, would reduce insurance coverage sharply and drive up costs. Although the CBO says premiums would moderate after a few years, it explains that would happen only because insurance benefits would shrink and deductibles and co-pays would rise.
This is the essence of saving money for the wealthy, whose taxes pay for most of the federal budget, by soaking the middle class and the poor. The reduction in insurance coverage would be especially severe among lower-income families, the CBO says.
Because the GOP repeal eliminates the individual mandate penalties that encourage younger, healthier Americans to buy insurance, in the individual market, “enrollment in 2018 would be smaller than that in 2017 and … the average health status of enrollees would worsen.”
You can expect Republicans to cherry-pick these findings, underscoring the reduction in the deficit and skating over the increase in the ranks of the uninsured and the higher prices many will pay for skimpier health plans. But the GOP knows the findings are bad; that’s why they’ve spent the last week denigrating the professionalism of the CBO.
In its report, issued in conjunction with the Congressional Joint Committee on Taxation, the CBO notes that premium increases are likely to be more severe for older Americans. The reason is that the GOP bill expands the range of premiums that can be charged to customers based on age. The Affordable Care Act allows older buyers to be charged no more than three times the rate of younger buyers; the Republican bill expands that to 5 to 1, “substantially reducing premiums for young adults and substantially raising premiums for older people,” according to the CBO.
Here’s the good news, at least as Republicans see it: The repeal would reduce the federal budget deficit by $337 billion over 10 years. Most of that would be the result of a stunning $880-billion reduction in Medicaid outlays, delivered in part by zeroing out the ACA’s Medicaid expansion over time, and in part by converting traditional Medicaid to a block-grant program that would squeeze states more every year.
In other words, the reduction in the federal budget would come from throwing the neediest Americans off Medicaid and forcing reduced benefits for those who are left.
Another $673 billion in budget reductions would come from reducing and eliminating tax subsidies for individual insurance. That’s another way that the GOP plan would appear to save money, only by imposing more costs on those least able to afford them. The CBO points out that one result from the repeal plan is that co-pays and deductibles would be likely to rise, even as subsidies for those items for the poorest buyers — those earning less than 250% of the poverty level (or $61,500 for a family of four this year) — are totally eliminated, starting in 2020.
The agency puts the impact of these changes in stark terms. The CBO estimates that a 21-year-old with income at 175% of the poverty line (about $21,000 this year) would receive a premium subsidy of about $3,400 under the ACA, but only $2,450 under the repeal. Although under the GOP repeal subsidies would be based on a buyer’s age — higher for older buyers — rather than on income, as is the case under the ACA, the higher subsidies for seniors wouldn’t be enough to cover their relative increase in premiums:
“Under the legislation, premiums for older people could be five times larger than those for younger people in many states, but the size of the tax credits for older people would only be twice the size of the credits for younger people.”
Here’s how the change would affect low income 64-year-olds, according to the CBO. Under Obamacare, they pay about $1,700 a year for coverage. Under the GOP plan, they’d pay $14,600 — for coverage about three-fourths as good.
Do you need to know much more than that?