This Afternoon's Managing Health Care Costs Number is 24 million
The Congressional Budget Office has weighed in -and projects that the American Health Care Act would lead to 14 million additional Americans uninsured in 2018, and 25 million more uninsured by 2026 after the full impact of the Medicaid cuts take hold.
The report makes it clear that the CBO has used the most forgiving measures in evaluating the AHCA. The reality if the bill is passed as currently drafted would likely be far worse.
- The CBO assumes that the individual market will remain "stable." despite the pretty dramatic cuts in subsidies coupled with the much weaker penalty for not being insured. Even with their approach premiums rise 15-20% with the AHCA.
Even though the new tax credits would be structured differently from the current subsidies and would generally be less generous for those receiving subsidies under current law, the other changes would, in the agencies’ view, lower average premiums enough to attract a sufficient number of relatively healthy people to stabilize the market.
Insurers might be less likely to offer plans with high actuarial values out of a fear of attracting a greater proportion of less healthy enrollees to those plans, although the availability of the Patient and State Stability Fund grants in most states would reduce that risk.
- The analysis assumes that the "Cadillac Tax" will go into effect in 2025- and thus counts the revenue from a tax highly unlikely to be implemented. This helps the bill meet the technical requirements for reconciliation by not leading to increases in the deficit beyond the 10 year window.
- The 24 million new uninsured Americans doesn't show the full impact on health security, since uninsurance will increase among the older population - the population most likely to need the coverage. The CBO is especially optimistic about increase in insurance rate among the young.
CBO and JCT expect that roughly 1 million more people would enroll in coverage obtained through the nongroup market as a result of the change in the structure of premium tax credits. That increase would be the net result of higher enrollment among younger people and lower enrollment among older people.
- The CBO assumes that states will use the Patient and State Stability Fund Grants to subsidize insurance - but they could use these funds for other purposes. States also could balk at the requirement to provide matching funds for these Grants.
- The CBO assumes that premiums will decrease in the nongroup market after 2020 due to the elimination of actuarial value requirements. This will make the out of pocket costs for those having these plans higher - which will make the insurance less attractive. Frankly -it's no surprise that insurance would cost less in the AHCA - since the CBO estimates that the actuarial value of the plans will decrease by 18% for those at 175% of FPL.
- The CBO chose to show illustrative premiums for 21,40 and 64 year olds at 175% and 450% of FPL. The AHCA provides full premium tax credits (less than the ACA) up to $75,000 in income ($150,000 for families - for singles this is 630% of FPL, and for families this ranges from 936% of FPL for a family of 2 to 367% for a family of 8) - so using the 450% of FPL as one of the illustrative points gives a misleading impression that a lot of Americans will gain higher subsidies.
One other point - the CBO analysis helps us understand just how devastating the requirement for continuous enrollment will be to federal funding of Medicaid.
CBO projects that fewer than one-third of those enrolled as of December 31, 2019, would have maintained continuous eligibility two years later. Under the legislation, the higher federal matching rate would apply for fewer than 5 percent of newly eligible enrollees by the end of 2024, CBO estimates.
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