Repeal & Replace Watch

CBO Deals Blow To Senate Health Bill With Estimate Of 22 Million More Uninsured

From left: Sen. John Barrasso (R-Wyo.), Senate Majority Leader Mitch McConnell (R-Ky.) and Sen. John Cornyn (R-Texas) (Bill Clark/CQ Roll Call via Getty Images)

Senate Republicans’ legislation to overhaul the Affordable Care Act would leave an additional 22 million people without health care coverage over the next decade and cut the federal deficit by $321 billion, according to a Congressional Budget Office analysis released late Monday.

By 2026, an estimated 49 million people would be uninsured, compared with about 28 million who would lack coverage under current law.

The Senate’s bill — the Better Health Care Act, which GOP leaders hope to put to a vote later this week — comes nearly two months after the House passed its plan to overhaul the Affordable Care Act. That measure would cut about $834 billion from Medicaid and leave an additional 23 million people without coverage in 2026, according to CBO. It would reduce the federal deficit by $119 billion.

Earlier in the day, before the nonpartisan budget office’s score was released, Senate Majority Leader Mitch McConnell (R-Ky.) described the GOP plan as preserving “access to care for patients with preexisting conditions.” He also said it would “strengthen Medicaid,” give “Americans more power to control and reduce their medical costs and out-of-pocket expenses” and give “states significant new tools to drive down premiums.”

Yet it was unclear if Republicans, who have a razor-thin Senate majority, could garner the 50 votes necessary for the measure to pass. The budget office’s findings added to this uncertainly.

Sen. Susan Collins (R-Maine), a moderate who has been on the fence about the bill, tweeted late this afternoon that she could not support the current bill based on the CBO score. “I want to work with my GOP and Democratic colleagues to fix the flaws in ACA. CBO analysis shows Senate bill won’t do it. I will vote no” on bringing the bill to the Senate floor, she announced.

Senate Democrats were also swift to react.

“The CBO report should be the end of the road for Trumpcare,” tweeted Senate Minority Leader Chuck Schumer (D-N.Y.). And, in a statement, Sen. Ron Wyden (D-Ore.) said it was “abundantly clear [Republicans] are going in the wrong direction.”

Sen. Bernie Sanders (I-Vt.) pointed to the analysis and said the GOP plan was “a cynical and immoral proposal.”

Detailing The Medicaid Numbers

Under the GOP measure, federal spending on Medicaid would drop by 26 percent over current spending projections, or $772 billion, over the next decade, according to the analysis.

The drop in spending would occur mainly because the Senate plan phases out federal funds for states to expand Medicaid and it puts annual caps on federal Medicaid dollars to states. Currently, federal Medicaid matching payments to states are open-ended.

By 2026, the budget office predicted, 15 million fewer people would be enrolled in Medicaid than projected under the ACA. Currently, more than 74 million low-income and disabled people are Medicaid beneficiaries.

How Medicaid beneficiaries are affected by these caps depends on how states respond to them, the CBO notes.

“With less federal reimbursement for Medicaid, states would need to decide whether to commit more of their own resources to finance the program at current-law levels or to reduce spending by cutting payments to health care providers and health plans, eliminating optional services, restricting eligibility for enrollment through work requirements and other changes,” according to the analysis.

The Medicaid funding provisions are a key reason several influential health groups say they cannot support the bill.

“Access to care for some of the most vulnerable members of our society — including those who require treatment for opioid-use disorder — would be endangered by the Senate proposal’s arbitrary, unsustainable, and shortsighted formula for funding Medicaid,” David Barbe, president of the American Medical Association, said in a statement posted on the organization’s website.

And even before the CBO report was issued, the National Association of Medicaid Directors was on record with its concerns. “The Senate bill does formalize several critical administrative and regulatory improvements, such as giving Medicaid Directors a seat at the table in the development of regulations that impact how the program is run, and the pathway to permanency for certain waiver programs,” the group said. “However, no amount of administrative or regulatory flexibility can compensate for the federal spending reductions that would occur as a result of this bill.”

Other organizations, such as Families USA and the American Public Health Association, said the CBO’s findings show the Senate proposal did “devastating harm” and would “seriously jeopardize the health of America.”

Cost And Coverage

The budget scorekeepers also concluded that, for the individual insurance market, premium costs would go down under the Senate plan, but so would the amount of coverage provided.

Because these plans “would pay for a smaller average share of benefits under this legislation, most people purchasing it would have higher out-of-pocket spending on health care than under current law,” CBO said.

In 2017, an estimated 12 million people bought health coverage through the ACA’s marketplaces. Most bought silver-level plans, which covered 70 percent of health care costs.

Under the Senate’s plan, the average premiums for an individual in 2020 would be about 30 percent lower. But these policies would cover about 58 percent of costs on average.

According to the CBO, “a combination of factors would lead to that decrease – most important, the smaller share of benefits paid for by the benchmark plans and federal funds provided to directly reduce premiums.”

The CBO also analyzed the Senate bill provision that would allow states to use waivers to modify the health law’s essential health benefits that include items like prescription drugs, maternity coverage, mental health and substance abuse. In states where such waivers were granted, consumers could experience substantial cost increases for supplemental premiums or out-of-pocket spending, or choose to forgo services. Nearly half the population, the CBO estimates, would reside in states that seek these waivers.

In addition, the ACA’s ban on lifetime and annual limits on covered benefits would no longer apply to health benefits not defined as essential in a state.

Note: This story was updated to correct the party affiliation of Sen. Ron Wyden. He is a Democrat. 

Categories: Cost and Quality, Insurance, Repeal And Replace Watch, The Health Law

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