Health and Science

24 million would lose health insurance coverage by 2026 under GOP's Obamacare replacement, new estimate says

CBO: Bill would cut deficit $337 billion over 10 years
CBO: Bill would cut deficit $337 billion over 10 years

Many more Americans would be uninsured, and insurance premiums would temporarily spike under the leading Republican proposal to repeal and replace Obamacare, according to a new estimate that also projects the plan would cut the federal deficit.

Fourteen million more people would become uninsured next year if the American Health Care Act is signed into law, the Congressional Budget Office estimated.

By the year 2026, a total of 24 million more Americans would be uninsured than they would be under Obamacare, the CBO said.

The estimates starkly contrast with the Trump administration's claims that more people would be insured under the Republican bill than would be if Obamacare was kept in place. And they portend possibly even steeper obstacles to getting the bill passed and signed into law.

The projected loss in coverage next year alone equals about 70 percent of the 20 million or so people who have gained insurance as a result of the Affordable Care Act, as Obamacare is formally known.

The total loss in coverage over the next decade would wipe out Obamacare's gains in coverage, and then some.

"In 2026, an estimated 52 million people would be uninsured, compared with 28 million who would lack insurance that year under current law," according to the CBO's report.

Much of the reduction in the number of people who have health coverage next year would result from the bill's proposed repeal of Obamacare's individual mandate, which requires most Americans to have insurance of some form or face a tax penalty.

But reductions in insurance coverage between 2018 and 2026 "would stem in large part from changes in Medicaid enrollment — because some states would discontinue their expansion of eligibility, some states that would have expanded eligibility in the future would choose not to do so, and per-enrollee spending in the program would be capped," the CBO report said.

The Republican bill also would reduce the federal deficit by $337 billion over the next decade, the CBO estimated in an analysis of the embattled proposal, which is currently working its way through the House of Representatives.

That reduction represents the difference between a $1.2 trillion decrease in direct spending and a reduction of $883 billion in revenues.

The CBO also estimates that premiums for individual health plans in next year and in 2019 would on average by 15 to 20 percent higher than what they would be under Obamacare.

But by 2026, average premiums would be about 10 percent lower than they would be if Obamacare remained intact, the office said.

However, that would just an average, and there would be wide variation in premiums across different age groups, because the bill would allow insurers to charge older customers up to five times the premiums charged to younger customers. A 21-year-old customer in 2026, for example, would see premiums that would be 20 to 25 percent lower than under Obamacare, but a 64-year-old would be looking at premiums that would be 20 to 25 percent higher, the CBO said.

And because the bill would eliminated subsidies for lower-income customers' out-of-pocket health costs, their share of those costs would increase.

Ryan: CBO report confirms bill will lower premiums
Ryan: CBO report confirms bill will lower premiums

The CBO said the lower average premiums over time are expected to "attract a sufficient number of relatively healthy people to stabilize" the individual plan insurance market, even though the tax credits offered to customers by the GOP plan are "less generous" and structured differently than under Obamacare.

The forecasts by the non-partisan CBO are certain to be used by a number of GOP lawmakers as ammunition to defeat the controversial bill, which they have strongly criticized despite it being touted by leaders of their own party.

The estimates also will be heavily cited by Democrats who oppose not just this particular GOP replacement plan, but any legislation that would gut and replace Obamacare.


"We disagree strenuously with the report," Health and Human Services Secretary Tom Price said. "The CBO report's coverage numbers defy logic."

But House Speaker Paul Ryan, R-Wisc., greeted the CBO estimates, saying, "This report confirms that the American Health Care Act will lower premiums and improve access to quality, affordable care."

"CBO also finds that this legislation will provide massive tax relief, dramatically reduce the deficit, and make the most fundamental entitlement reform in more than a generation," Ryan said.

"These are things we are achieving in just the first of a three-pronged approach. It's important to note that this report does not take into consideration additional steps Congress and the Trump administration are taking that will further lower costs and increase choices."

However, Leslie Dach, director of the Protect Our Care Coalition, said the loss of insurance by up to 24 million would be "a tragedy for our nation.

"But even more traumatic are the millions of individual nightmares that will play out if this bill becomes law – parents with sick children who won't be able to afford care, older Americans who will see their premiums skyrocket, and every person worried about paying for their prescription drugs," Dach said.

"This isn't giving people more freedom," Dach said. "This is President Trump and the Republican leadership in Congress taking away people's health care. This is a decision the Republican leadership is making -- no person would make this decision for their family."

The CBO report contradicts claims by the Trump administration that Obama is so-called death spiral, with skyrocketing premiums and falling enrollment. The report says the individual health plan market likely would remain stable in most areas of the United States under either Obamacare or the Republican plan.

The CBO's analysis is an uncomfortable, but long-expected, reminder to Republican leaders, including President Donald Trump, about the potential political perils of getting rid of Obamacare. The ACA has been credited with driving down the nation's uninsured rate to record low levels, from 18 percent of Americans in 2013 to 10.6 percent in the last quarter of 2016.

The CBO's estimates about the number of people who would lose coverage reflect the effect of the Republican bill's revocation of the Obamacare requirement that most Americans have some form of health coverage or pay a fine, as well the bill's rollback of funding for the expansion of Medicaid starting in 2020.

Meade: CBO numbers gives GOP flexibility
Meade: CBO numbers gives GOP flexibility

The estimates on the impact on the federal budget deficit reflects the savings that would accrue from a reduction in federal spending on Obamacare subsidies to millions of customers, which would be offset on the revenue side somewhat by elimination of ACA-related taxes.

The CBO's projections come days after the Brookings Institution estimated that the the bill would increase the number of uninsured Americans by more than 15 million, and the Joint Committee on Taxation estimated it would cost the federal government an additional $600 billion over a decade.

In anticipation of the estimates about the loss of insurance by millions, backers of the bill sought to delegitimize the CBO's analysis.

That critique of the CBO conflicts with the fact that members of Congress of both parties for the past four decades have depended on the office to provide analyses of budgetary and economic issues.

"If you're looking to the CBO for accuracy, you're looking in the wrong place," White House press secretary Sean Spicer said last week.

Mick Mulvaney, director of the White House Office of Management and Budget, said, "If the CBO was right about Obamacare to begin with, there'd be 8 million more people on Obamacare today than there actually are."

"Sometimes we ask them to do stuff they're not capable of doing, and estimating the impact of a bill of this size probably isn't the best use of their time," Mulvaney said.

The CBO's analysis comes a week after the bill was introduced by Republican leaders in the House of Representatives, and passed by two committees. The bill is headed to review by the House Budget Committee this week.

The American Health Care Act is being supported by Ryan and other key members of the House, in addition to Trump.

Trump, Ryan the other leaders in the past week have repeatedly described Obamacare as a failing program that has led to skyrocketing insurance premiums, and millions of people being unable to use their coverage because of unaffordable deductibles.

Before the CBO released its score for the replacement plan, Trump tweeted new criticism of Obamacare.


Andy Slavitt, who oversaw Obamacare as head of the federal Centers for Medicare and Medicaid Services in the Obama administration, said the CBO report "seems like one of the first major domestic leadership tests for President Trump."

"Does he give in to traditional D.C. political pressures and push a bill that there is now strong evidence would harm millions of Americans in small towns and big cities around the country, or does he show the leadership to step back and figure out what's best for the American public?" Slavitt asked.

While many Republicans agreed with Trump's broad critique of the Affordable Care Act, the Republican bill has been greeted by criticism from many GOP conservatives, in addition to liberal supporters of Obamacare.

The conservative case against the bill is that it does not go far enough in repeal in the ACA because it would continue to issue subsidies, albeit in reduced amounts, to people to help them buy individual health insurance plans. Conservatives also do not want to delay the rollback of Medicaid funding until 2020.

But in the Senate, several GOP senators have said they will not support a replacement bill that does not protect coverage gains made by Medicaid under Obamacare. Other Republican senators object to defunding of Planned Parenthood, as the GOP bill would do.

Tom Price, the secretary of the Department of Health and Human Services, said on NBC's "Meet the Press" on Sunday that, "There are a lot of people that are worse off right now when they're paying for health care and they aren't getting the care that they need," Price said.

"Again, the premiums are up and deductibles are up. If you're an individual out there making fifty, sixty thousand dollars and your deductible is eight, ten, twelve thousand bucks you may have that insurance card, but you don't have coverage," Price said.

"And I hear from my former colleagues all the time about patients who come into their office and they recommend something for them, and they're not able to get it because the deductible is so high."

Price also said he did not expect that the Republican plan would result in higher costs of insurance, and that he does expect an increase in the number of people with health insurance.

"I firmly believe that nobody will be worse off financially," Price said. "There's coverage that's going to go up."

When asked about the Brookings Institution estimate that more than 15 million people would become uninsured as a result of the GOP plan, Price said, "I'll tell you that the plan that we've laid out here will not leave that number of individuals uncovered."

"In fact I believe, again, that we'll have more individuals covered," Price said.

Obamacare led to unprecedented drops in the nation's uninsured rates through a combination of measures.

The first measure to take effect was the provision that allows people under the age of 26 to be covered by their parents' health plans.

The ACA's so-called individual mandate requires most people to have health coverage of some kind — such as through a job, an individual insurance plans, Medicare, Medicaid, or military insurance — or pay a tax penalty. For the 2016 tax year, that penalty is the higher of $695 or 2.5 percent of household income.

Obamacare also authorized the creation of government-run insurance marketplaces, which sell individual plans offered by private insurance companies. Customers of those marketplaces, also known as exchanges, can get federal subsidies that lower the cost of their monthly premiums if they have low and moderate incomes. Lower-income customers can get additional subsidies for their out-of-pocket health expenses.

Medicaid expansion has been credited with having the largest impact on reducing the number of uninsured people.

More than 10 million Americans are estimated to have gained coverage through the ACA provision that allows states to loosen eligibility requirements for their Medicaid programs so that nearly all poor adults can sign up for them. Thirty-one states, along with the District of Columbia, have expanded their Medicaid programs.

Watch: Uncertainty in CBO scores

A lot of uncertainty in CBO scores: Pro
A lot of uncertainty in CBO scores: Pro