CBO: GOP Obamacare replacement bill will increase uninsured by 24 million

The American Health Care Act, the Republican-backed bill to repeal and replace Obamacare, will cause 24 million Americans to lose their health coverage and raise insurance premiums by double digits for older people, according to the non-partisan Congressional Budget Office.

The CBO projected that, if passed by Congress and signed by President Donald Trump, the Obamacare replacement bill will increase the number of uninsured Americans by 14 million in 2018, 21 million in 2020, and 24 million in 2026. As a result, the number of Americans without health insurance will nearly double to 52 million by 2026.

Devised by Republican House Speaker Paul Ryan and backed by Trump, the bill would raise the “average premium for single policyholders” by 15% to 20% in 2018-19, according to CBO’s analysis.

The bill would repeal the Obamacare provision protecting older Americans from being gouged and would allow insurance companies to “charge five times more for older enrollees than younger ones”.

“By 2026, CBO and JCT project premiums in the non group market would be 20% to 25% lower for a 21-year-old, and 8% to 10% lower for a 40-year-old, but 20% to 25% higher for a 64-year-old”, according to the analysis.

The bill would replace current Obamacare subsidies to help middle-income individual afford health coverage with new refundable tax credits, “significantly increasing out-of-pocket costs for non-group insurance for many low-income enrollees”.

Lower-income individuals are projected to receive nearly 27% less tax credit, from $3,400 to $2,450, while higher income individuals currently ineligible for tax credit under Obamacare would be eligible for a $2,450 tax credit.

“[I]ndividuals’ cost-sharing payments, including deductibles, in the non-group market would tend to be higher than those anticipated under current law”, according to CBO.

In addition, the bill would cut Medicaid spending by 25%, approximately $880 billion, from 2017-2026. As a result, more than 14 million low-income Americans would lose their Medicaid coverage, according to CBO projections.

Fewer people would be enrolled in the Medicaid program because the bill would replace the current federal matching rate for enrollees with a “per capita-based cap” – or a block grant to each state – indexed to the consumer price index in 2020.

“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 whether to reduce spending by cutting payments to health care providers and health plans, eliminating optional services, restricting eligibility for enrollment”, according to CBO.

Overview of the American Health Care Act:
* eliminate the insurance coverage mandate penalty;
* reduce the federal matching rate for Medicaid enrollees and cap payments to CPI indexed in 2020;
* repeal subsidies and replace with refundable tax credit;
* repeal Obamacare regulation that “prevents insurers from charging older people premiums that are more than three times larger than the premiums charged to younger people”;
* remove requirement “that insurers…must offer plans that cover at least 60% of the cost of covered benefits”
* repeal the surtax on high-income taxpayers’ net investment income;
* repeal the increase in the hospital insurance payroll tax rate for high-income taxpayers;
* repeal the annual fee on health insurance providers.

Learn More:

cbo.gov: Congressional Budget Office Cost Estimate – American Health Care Act – March 13, 2017 (PDF)

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