CBO: Senate healthcare bill leaves 22M fewer insured by 2026, but more deficit-friendly than House's

Posted at 2:45 PM, Jun 26, 2017

DENVER – The nonpartisan Congressional Budget Office (CBO) says the Senate’s health care bill will leave 22 million people who currently have insurance under the Affordable Care Act without it over the next 10 years—a slight improvement on the 23 million people who would lose insurance under the House version of the bill scored in May.

But the CBO estimates that 15 million people will lose insurance next year alone when compared to those insured under the Affordable Care Act. The CBO estimated 14 million people would lose insurance in 2018 under the House version of the bill.

But by 2026, the CBO estimates that 49 million people will be uninsured, compared to just 28 million who would be without insurance if nothing is changed with current law under the ACA.

The legislation would hit older people with low incomes hardest, though people of all ages will see their share of uninsured grow by more than 20 percent over the next 10 years, according to the CBO.

Under the ACA, a 64-year-old can only be charged up to three times as much for coverage as a 21-year-old. But under the Senate’s bill, that could rise to a 5:1 ratio, which the CBO wrote that it anticipates “most states would accept that change.”

The Senate’s draft legislation would decrease the federal deficit by $321 billion over the next 10 years as well—a much greater reduction than the $119 billion the House version would have cut, according to the CBO.

The CBO estimates Medicaid spending under the BCRA would remain relatively flat compared to the ongoing increase in spending for Medicaid under the ACA.

Those cuts will leave 15 million fewer Medicaid recipients in 2026 than the current projection under the ACA, though the CBO accounted for expanded Medicaid over the next four years in its ACA assessment.

And since states won’t get as much back in reimbursement money from the feds for Medicaid, the CBO writes that states would have to finance the program themselves, or make drastic changes to their offerings on the market or payments to medical providers, which could in turn retaliate.

Other ways in which Medicaid spending caps affected enrollees would depend greatly on how states responded to the caps, which would be affected by the particular structure of their program. If states chose to leave their Medicaid program unchanged and instead found other ways to offset the loss of federal funds, enrollees would notice little or no change in their Medicaid coverage. To the extent that states delivered services more efficiently, the health of enrollees would not be affected.

If states reduced payment rates, fewer providers might be willing to accept Medicaid patients, especially given that, in many cases, Medicaid’s rates are already significantly below those of Medicare or private insurance for some of the same services. If states reduced payments to Medicaid’s managed care plans, some plans might shrink their provider networks, curtail quality assurance, or drop out of the managed care program altogether. If states reduced covered services, some enrollees might decide either to pay out of pocket or to forgo those services entirely. And if states narrowed their categories of eligibility or used administrative procedures that made it more difficult to enroll, some enrollees would lose access to Medicaid coverage, although some would become eligible for subsidies for nongroup coverage through the marketplaces or could choose to enroll in employment-based insurance, if it was available.

The CBO also estimates that by cutting the ACA’s tax credit program to help people buy insurance, and the ending of cost-sharing subsidies for insurance companies, will save about $424 billion.

And the Senate's bill eliminates the provision in the ACA requiring large employers with more than 50 employees to offer coverage, which the CBO says could lead to around 4 million people losing their employer-sponsored insurance.

But most of the reduction comes from cutting provisions to Medicaid spending by the federal government, which will be reduced by 26 percent in comparison to current spending starting in 2026, and from cutting taxes for high-income earners, according to the CBO.

The Senate bill also will cut the average subsidies for people in the nongroup market, which will force some out of insurance because they can’t pay, according to the CBO.

But the cuts to Medicaid are expected to have drastic effects. The CBO estimates that enrollment in Medicaid for people under age 65 will decrease by 16 percent by 2026.

It also estimates that $772 billion will be cut from Medicaid by 2026, as the bill reduces or gets rid of altogether the matching money paid out by the federal government to states, and also caps Medicaid payments on a per-capita basis.

And while the bill is expected to lower average premiums in the long run after they are expected to go up under the bill in 2018 and 2019, by 2020, the CBO score says low-income people could be hit with a plan that would “typically be a relatively high percentage of income.”

People on nongroup plans are also expected to pay higher out-of-pocket costs than they currently do, and the CBO says that “out-of-pocket spending would also be affected for the people—close to half the population, CBO and JCT expect—living in states modifying [essential health benefits]” that are required to be covered by companies under the ACA. 

If states opt for the waivers to limit essential health benefits, the CBO estimates that in some instances, “coverage for maternity care, mental health care, rehabilitative and habilitative treatment, and certain very expensive drugs could be at risk.”

It also estimated that there might be “insufficient” funding to provide coverage in states that opt out of the essential health benefits coverage.

“The agencies expect that insurance coverage for high-cost services would become extremely expensive in those areas, as it was in some places before the enactment of the ACA in 2010,” the CBO wrote. “A state is required to have mechanisms to reduce the chance of such outcomes as part of its waiver program under current law, but would not be under this legislation."

The nonpartisan Colorado Health Institute estimates that in Colorado, there will be 628,000 fewer Coloradans covered by 2030 because of the rollback in Medicaid expansion funding—about half the state’s current Medicaid population.

The state itself would lose more than $15 billion in federal money by 2030 as well, and people in rural Colorado counties that are more dependent on Medicaid than the state’s urban centers would “struggle with affordability” in paying for insurance, CHI said.

CHI also said the Senate’s bill would make less incentive for young people to get insurance when the individual mandate is dropped.

And though the individual mandate is dropped, Senate Republicans released a new bill Monday that will allow insurers to deny coverage for 6 months to anyone who has had a lapse in insurance coverage for more than 63 days starting in 2019, which the CBO says could be beneficial in some cases, and could lead to some who need coverage to go without it in other cases.

A CHI analysis of the differences between the ACA, AHCA, and BCRA can be seen below or by clicking here.

Senate Majority Leader Mitch McConnell is pushing the Senate to vote on the bill later this week to the chagrin of many Democrats and health care groups.

He needs 52 votes to pass the legislation, though some Republicans, including Nevada's Dean Heller and Maine's Susan Collins, have said they won't support the bill as it stands.

It's also unclear exactly what provisions of the BCRA and AHCA will go into the final bill, or if one chamber will just accept one bill or another without changes and forward it to President Trump's desk, as the House could do with this Senate version.

Sen. Michael Bennet, D-Colo., offered a statement regarding the CBO score, and Sen. Cory Gardner, R-Colo., had a spokesman offer comment.

“Today’s CBO score only confirms how disastrous the Republican health care bill would be for Coloradans,” Bennet said. “It would hurt children on Medicaid, those seeking treatment for opioid addiction, seniors in nursing homes, and so many more Americans who would be forced to pay more for lower quality care. If this score is not enough to dissuade Republican senators from opposing the bill, then the voices of Coloradans and the 22 million Americans who stand to lose their coverage should be.”

Gardner's spokesman, Casey Contres, told Denver7 "the CBO report that was just released is part of the discussion" that he is having with "constituents, healthcare professionals, and his colleagues."

"There are going to be modification made to the draft legislation introduced last week and the senator will also be reviewing these to see how they would impact any final bill that would be voted on in the near future," Contres said.

Follow-up questions to Contres were not returned.

Gardner has been under fire from Colorado Democrats after being part of the working groups putting the Senate's bill together, but not having seen a text version of the bill a day before it was released on Friday.

Rep. Diana DeGette, D-Colo., said the bill’s added six-month coverage gap “could be a death sentence.”

“To quote President Trump himself, this bill is ‘mean.’  It will force families to pay higher premiums and deductibles, provide less coverage for tens of millions of people, gut key protections and impose a crushing Age Tax. It’s hard to imagine why anyone would support that,” she said.

“The nonpartisan, objective analysis of the Republican healthcare plan is out, and the news is devastating, as we expected.  It takes us backward, rolling back any and all progress achieved under the Affordable Care Act,” Rep. Jared Polis, D-Colo., said.