CBO Report on Health Bill: What It Is and Why It Matters -- Update

By Stephanie ArmourFeaturesDow Jones Newswires

What is the CBO report and why is it so important?

The Congressional Budget Office is a nonpartisan agency that provides budget analysis on economic and budget decisions. Its reports are now helping lawmakers evaluate how the Republican health bills would affect the number of uninsured people, premiums and the federal deficit. That last part is key: Because of the complex budget process the Senate is using, the health overhaul bills cannot increase the deficit beyond the 10-year budget window.

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Didn't the CBO already report on the Republican health plan?

Yes, it did -- back in March. That report found the House GOP health plan would cut the federal deficit by $337 billion over a decade, and would result in 24 million more uninsured people by 2026 compared with the Affordable Care Act. But since that report, House Republicans changed their bill to attract more support. So the CBO now must re-evaluate it, even though the House passed that revised version without waiting for the CBO's report.

What impact does the report have?

Senators now working to craft their own bill to knock down most of the ACA will likely rely on the CBO analysis to guide their own plan. If it shows a lot of people would wind up uninsured under the House bill, senators could seek ways to soften that effect. If it says the House bill would lower premiums due to reduced regulations, that could embolden Senate conservatives to insist on deregulation in their bill. And either way, the report is likely to supply fresh ammunition to Democrats who say millions could lose care under any of the Republican plans.

Why is figuring this out so difficult?

The CBO staff has a tough task partly because the revised House bill would let states get waivers from some ACA requirements. Those states could let insurers charge higher premiums to people with pre-existing health conditions who let their coverage lapse. Such states also could roll back the ACA requirement that insurers provide specific benefits. The tricky part: No one knows how many states would seek the waivers. The waivers also could mean that some people are covered by less-robust plans, and it is unclear whether CBO will score that as reduced coverage.

What are the most important numbers to look at?

Under budget rules, the health bill must cut the federal deficit (the House's first version did that to the tune of $337 billion), so that is an important number. It is also important to look at how much of the budget savings would come from reduced Medicaid spending, because steep cuts mean more people without insurance. That is another key figure: the increase in the uninsured compared with leaving the ACA in place. The more uninsured, the harder it may be for Republicans to sell their plan to the public. And effects on premiums matter, since Senate GOP lawmakers have said their main goal is to bring down premium costs.

Write to Stephanie Armour at stephanie.armour@wsj.com

(END) Dow Jones Newswires

May 24, 2017 18:10 ET (22:10 GMT)