CBO Sees 24 Million More Uninsured, $337 Billion Deficit Cut in Coming Decade With GOP Health Plan

Health CareThe Wall Street Journal

The number of Americans without health insurance would grow by 24 million under a House Republican proposal to topple most of the Affordable Care Act, according to a nonpartisan report that is likely to complicate GOP lawmakers’ efforts to unite around the plan.

Continue Reading Below

The report, released Monday by the Congressional Budget Office, rattled some centrist Republicans in the Senate who have said they won’t support legislation that leaves a large number of people without coverage. House Republicans hoping to push the legislation through both chambers by early April already face a revolt from conservative GOP lawmakers who assert that the proposal doesn’t do enough to roll back the ACA.

The CBO also found the legislation would reduce the federal deficit by $337 billion over the next decade and would lead insurance premiums to increase at first, then shrink.

The rise in the number of Americans without coverage appears to contradict earlier statements by President Donald Trump, who has said everybody would be covered under a new plan.

By next year, an additional 14 million people would be uninsured, compared with conditions if the Affordable Care Act were allowed to stand, according to the CBO report. In 2026, that figure would reach 24 million, bringing the total number of uninsured Americans to 52 million.

Republicans strongly disputed some of the report’s findings. Tom Price, secretary of Health and Human Services, and Mick Mulvaney, director of the White House Office of Management and Budget, told reporters they “strenuously” disagreed with the CBO.

“It’s just not believable,” said Dr. Price, a former orthopedic surgeon. He added that the CBO didn’t examine steps his agency would take through administrative action, nor did it take into account other congressional legislation that would drive down insurance costs.

But Sen. Lindsey Graham (R., S.C.) said Republicans shouldn’t reject the CBO report because they don’t like every element of it. “Let’s say the CBO is half right—that should be cause for concern,” Mr. Graham told reporters. “The prudent thing for the party to do is to look at the CBO report and see if we can address some of the concerns raised.”

The nonpartisan estimate sets the stage for the next round of intraparty negotiations on Capitol Hill. If centrist Republicans balk at the rise in uninsured people, they may press GOP leaders to take steps to cut that number.

Democrats and other critics said the CBO score confirmed predictions that the GOP bill would tear insurance from millions of people.

“In the year 2017, Republicans want to throw 24 million people off health insurance, raise premiums for older people, and at the same time provide $285 billion in tax breaks for the top 2%,” Sen. Bernie Sanders (I., Vt.) told reporters Monday. “I think that legislation is disgusting, it is immoral, and it should not see the light of day.”

The Republicans push to repeal and replace the ACA is forging ahead. The House budget committee is scheduled to begin voting on the GOP bill Thursday—one day later than planned because of the snow storms complicating lawmakers’ travel. Republicans leaders are on a tight timetable, aiming to get the legislation through both chambers by early April, using a budget process in the Senate that requires only a simple majority to pass the legislation.

CBO’s estimate that the House GOP bill would squeeze $880 billion from federal Medicaid spending over 10 years is likely to be brought up in the coming debate, not only by Democrats but also by Senate Republicans uneasy over the proposed changes to the federal-state safety-net program.

The fate of Medicaid’s expansion under the ACA is likely to remain a major sticking point. The House proposal would freeze funding in 2020 for the 31 states that expanded the program.

Monday’s report highlights the trade-offs Republicans are making: They hope the political blow they suffer from the estimates of millions more without insurance will be offset by moves to undo the ACA’s least popular elements, including its mandates and taxes.

“When you don’t force people to buy a product they don’t want, then more people will choose not to buy that product,” Sen. John Cornyn of Texas, the second-ranking Senate Republican, told reporters. “The only way you’re going to get better numbers is to force people to buy a government-approved product or penalize them if they don’t.”

The CBO report says 14 million more people would be without insurance in 2018 under the proposal because it repeals a requirement that most Americans pay a penalty for not having insurance. It pegs the rise to 24 million more people without coverage in 2026 to lower coverage under Medicaid.

The analysis also says that over time, fewer employers would offer health insurance because the proposal changes their incentives to do so.

The legislation would reduce the federal deficit by $337 billion by 2026, the CBO found, largely by lowering spending for Medicaid and ending the ACA’s tax credits. In its calculations, CBO used an estimate that the bill would be enacted by May 2017.

The Affordable Care Act was estimated to reduce federal deficits by $124 billion by 2019, according to a March 2010 estimate by the CBO before the law was enacted. CBO has in recent years stopped estimating the continuing effect on the deficit from the ACA.

The path of rising insurance premiums—another heated topic—is mixed, according to the report.

Premiums in the individual market would tend to increase before 2020, rising up to 20% higher than under the ACA, in large part because of the demise of the penalty for not having coverage. Premiums would then go down: In 2026, average premiums for a single person in the individual market would be about 10% lower than under the health law now.

The actual premium amounts would vary significantly based on age, with older people paying more. Tax credits available to people on the ACA health exchanges are based on income and would be ended by the House legislation. Instead, the Republican proposal would provide credits based on age, although they phase down for higher-income earners.