Politics

Senate GOP Obamacare replacement would lead to 22 million more uninsured in 2026, CBO estimates

Key Points
  • The nonpartisan Congressional Budget Office estimates that 22 million more people would be uninsured in 2026 under the Senate's Obamacare replacement bill.
  • Average premiums are expected to fall in 2026 after initially rising.
  • The CBO's estimate of the plan's effect on the number of uninsured Americans could influence whether Republican senators support it.
  • Senate leaders are aiming to quickly gather the votes needed to pass the plan.
CBO releases score of Senate health-care draft
VIDEO1:4401:44
CBO releases score of Senate health-care draft

The Senate's Obamacare replacement bill would lead to 22 million more Americans uninsured in 2026, while average premiums are expected to fall after climbing at first, according to a Monday report from the nonpartisan Congressional Budget Office.

The CBO's estimate of the plan's effect on the number of uninsured Americans could influence whether Republican senators support it, as GOP leaders walk a thin line in trying to win the votes needed to pass their plan. The estimated growth in the number of uninsured Americans is slightly lower under the Senate plan than the bill that passed the House last month, which the CBO said would lead to 23 million fewer covered in 2026.

Average premiums for single individuals would rise by 20 percent and 10 percent in 2018 and 2019, respectively, relative to current law, according to the CBO. By 2026, average premiums in most of the country are expected to be about 20 percent lower under the plan than they would be under current law.

Senate Republicans last week released a draft of their secretive Obamacare replacement bill, called the "Better Care Reconciliation Act of 2017." The plan would repeal Obamacare taxes, restructure subsidies to insurance customers that are based on their incomes and phase out Medicaid's expansion program. It contains some key differences from the version the House passed last month.

Shortly before the CBO released the score, Senate Republicans unveiled a revised version that appears aimed to deter younger, healthier people from dropping insurance. The updated bill would impose a six-month waiting period on individuals who buy insurance but let their coverage lapse for more than 63 days in the prior year.

That provision, an apparent response to Obamacare's individual mandate, would start in 2019. It would "slightly increase" the number of people with insurance in the 2018 to 2026 period, the CBO said.

Before the CBO released the score for the Senate plan, five GOP senators said they will not back it in its current form. Republicans, who control 52 seats in the Senate, can only lose two votes to pass the plan. They face difficulties in winning over skeptical senators, as tweaks to appease conservatives could alienate moderates, or vice versa.

Here are some of the key conclusions from the CBO report:

  • An estimated 15 million more people would be uninsured next year than under current law, "primarily because the penalty for not having insurance would be eliminated."
  • Lower spending on Medicaid than under current law and "substantially smaller average subsidies" in the individual market would lead to more Americans being uninsured in the following years. Enrollment in Medicaid is expected to fall by about 16 percent by 2026, the CBO estimated.
  • The Senate plan would lead to an estimated $321 billion in deficit reduction from 2017 to 2026. Most of those savings would come from a drop in spending on Medicaid, which the CBO expects will fall 26 percent by 2026, relative to current law. That deficit reduction is higher than the estimated $119 billion saved by the House plan.
  • While average premiums are expected to fall, out-of-pocket costs could rise for many Americans "because nongroup insurance would pay for a smaller average share of benefits under this legislation."
  • States can also waive Obamacare's essential health benefits requirement, which covers things like mental health and substance abuse treatment. About half of Americans would live in states modifying EHBs, and could "experience substantial increases in supplemental premiums or out-of-pocket spending on health care, or would choose to forgo the services."
  • Nongroup insurance markets "would continue to be stable in most of the country," according to the CBO. Premium tax credits would "provide insulation from changes in premiums through 2021 and in later years," according to the report.

Gathering votes

Senate Majority Leader Mitch McConnell aims for a vote this week, but it is not clear if he can rally the support needed to do so.

"Americans need relief from the failed Obamacare law," McConnell said in a statement issued after the CBO report was released. "The Senate will soon take action on a bill that the Congressional Budget Office just confirmed will reduce the growth in premiums under Obamacare, reduce taxes on the middle class, and reduce the deficit. The American people need better care now, and this legislation includes the necessary tools to provide it."

But the White House issued a statement questioning the report's findings, saying that "the CBO has consistently proven it cannot accurately predict how health-care legislation will impact insurance coverage."

As of right now, it is difficult to gauge how much support the bill has.

Four conservative senators — Rand Paul of Kentucky, Ted Cruz of Texas, Mike Lee of Utah and Ron Johnson of Wisconsin — argue the Senate proposal does not go far enough to dismantle the Affordable Care Act.

Moderate Republican Susan Collins of Maine said Monday night she would vote "no" on the motion to proceed with the bill. In a tweet, Collins said she wants to work with Republicans and Democrats to "fix the flaws" in Obamacare, but the "Senate bill won't do it."

Paul also said Monday he would oppose a motion to proceed without changes. Johnson said he "would highly doubt" he would support the motion.

Also on the GOP's so-called moderate wing, Sen. Dean Heller of Nevada has opposed the bill as written, slamming its rollback of Medicaid expansion. Heller is up for re-election next year in Nevada, a state where Medicaid expansion provided coverage to about 210,000 people, according to its Republican Gov. Brian Sandoval.

After the CBO report's release, Sen. Bill Cassidy, (R-La.), told CNN that he had not seen the CBO report but that, as described by the network, it made him "more concerned." He added that he remains "uncommitted."

House Republicans barely managed to muster enough votes with a series of last-minute amendments before the chamber passed its highly criticized Obamacare replacement plan last month. That chamber, too, faced opposition from both conservative and moderate pockets.

Democrats slam plan 

As expected, Senate Democrats and independents immediately bashed the Republican plan. Senate Minority Leader Chuck Schumer of New York criticized the waiting period provision, saying that it "would pour salt in that wound, locking American families out of health insurance for even longer."

Democratic National Committee Chairman Tom Perez called it a "disaster for women, older Americans and people with pre-existing conditions."

— CNBC's Dan Mangan contributed to this report

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