Health and Science

CBO's report card on Obamacare repeal bill could add more fuel to health-care debate

Key Points
  • Prior versions of the Obamacare replacement bill were projected to result in 24 million more people being uninsured.
  • The House may have to re-vote on the GOP bill if the report doesn't show big enough budget savings.
  • The Senate is considering writing its own version of a new health-care law.
Did the CBO scorecard just signal an incoming quagmire for health care in America?
Did the CBO scorecard just signal an incoming quagmire for health care in America?

A long-awaited report on the expected effects of the revised Republican Obamacare

replacement bill is being issued Wednesday, as senators continue discussions on what to keep and what to scrap from that legislation.

Most closely watched will be the number of people expected to lose health insurance coverage under the current bill, and how much premium prices will change in coming years if the bill becomes law.

Both sets of numbers are expected to provide Obamacare defenders with ammunition to fight the repeal-and-replace effort.

The report, from the nonpartisan Congressional Budget Office, could also determine whether the House of Representatives will be forced to vote again on the controversial bill after passing it by just a single "yes" vote on May 4.

That revote would come if the latest version of the American Health Care Act isn't expected to save at least $2 billion for the federal government, as required by arcane Senate rules.

The House passed the AHCA — which would make major changes to Obamacare rules — without having first seen the CBO's analysis of the current version of the bill. Since that vote, the bill has not been formally sent to the Senate because of the potential need to vote again. However, a group of senators is still meeting to discuss how to craft their own version of the bill.

"I think the CBO score is going to be worse" for the current bill, said Kevin Counihan, who until January was CEO of, the federal Obamacare market that sells individual health plans in most of the United States.

It's game on politically: Expert
It's game on politically: Expert

Counihan said he expected the new CBO report to show an even bigger drop in the number of insured Americans than had been previously projected.

If that is the case, Counihan said, getting the bill passed by the Senate "becomes more problematic" because it will "re-energize" public opposition to the unpopular bill.

"But I think [the bill] is problematic to begin with," he added.

Earlier CBO reports on prior versions of the same bill estimated that 24 million more people would be uninsured by 2026 if it becomes law than would the case if the Affordable Care Act remained in effect. Most of those coverage losses would come in 2018, when 14 million more people would become uninsured, the reports found.

The projected drops in coverage result from the elimination of Obamacare's rule requiring most people to have some form of insurance or pay a tax penalty, as well as expected higher premiums due to the new law. Later reductions in numbers of uninsured people stem from changes made to how people are subsidized for purchasing individual plans, and reductions in federal support for Medicaid.

The CBO also projected that in 2018 and 2019, average premiums for individual plan would be an average of 15 to 20 percent higher than they would be under Obamacare. Again, that would result from elimination of the Obamacare mandate requiring people to have insurance.

However, "by 2026, average premiums for single policyholders in the nongroup market would be roughly 10 percent lower than under current law," CBO said.

That does not mean that premiums would be 10 percent lower than what they currently are.

The new report — which will be the third CBO analysis of the bill — will factor in the effects of a major amendment tacked onto the legislation that helped win approval for it from conservatives in the House.

The so-called MacArthur amendment would allow states to apply for waivers from the federal government to let insurers charge people with pre-existing health conditions higher premiums for their plans than healthier people. Obamacare currently prohibits such discrimination. States that applied for the waivers would have to operate "high-risk pools" or other programs that would offer coverage to people with pre-existing conditions who faced being priced out of the individual market.

The same amendment also would let states seek waivers for rules mandating that insurers offer a certain minimum set of "essential health benefits" in their plans.

Craig Garthwaite, an associate professor for the Kellogg School of Management at Northwestern University , said he expects "maybe there's going to be a slight decline in the number of uninsured people" in the new CBO report compared with the prior reports.

But Garthwaite does not expect any such change to significantly affect the debate over the Republican bill.

He said he has told friends that even if the number of people who would become uninsured under the new bill is cut in half, it would still be in the "double-digit" millions, and risk political blowback.

Obamacare, despite itself being controversial, is credited with expanding health coverage to 20 million Americans since 2010, reducing the uninsured rate to around 9 percent of the population. When President Barack Obama signed the ACA into law in 2010, the uninsured rate stood at 16 percent.

Garthwaite said there might be a "slight decline in the premium" prices in the new CBO report relative to the prior reports.

"But again, you're going to get those premiums from covering less" benefits and people, Garthwaite said. "If I buy a crappier car, I pay less."

Garthwaite said CBO analysts have "a Herculean task" in the new report, because they will have to project how many states will apply for a waiver under the MacArthur amendment, and how the insurance markets in those states would be affected if waivers are granted.

"They're going to make some guesses," he said. "I think it's really hard to have a lot of confidence" in the related projection based on those guesses, he said.

Highlights of the GOP bill

  • Increase the amount of premium subsidies for younger adults, and reduce the amount for older adults, while allowing subsidies to be used to buy individual plans outside Obamacare exchanges.
  • Allow older adults to be charged premiums that are five times higher the premiums charged younger adults, instead of the 3-to-1 ratio established by Obamacare.
  • Impose a premium penalty for people who do not maintain continuous health coverage.
  • Convert Medicaid funding for states to a block grant system.
  • Give states power to request waivers for insurers that allow them to charge people with pre-existing health conditions higher premiums if they let coverage lapse.
  • Establishes funding for states that can be used for "high-risk" individuals, or other purposes.

Watch: 23 million fewer insured under GOP health plan

CBO: 23M fewer insured under revised GOP health care bill
CBO: 23M fewer insured under revised GOP health care bill