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2 Important Figures You Overlooked in the CBO's Scoring of the GOP Senate Health Bill

An Affordable Care Act plan stamped with the word "Repealed."

Baby steps might be the best descriptor of the Congressional Budget Office's (CBOs) scoring of the recently introduced Better Care Reconciliation Act (BCRA) in the Senate.

House Republicans introduced the American Health Care Act (AHCA) in March as the plan that would repeal and replace Obamacare. The plan, when scored by the CBO, called for 24 million more people to be uninsured by 2026. The initial version of the AHCA never wound up going to vote on the House floor because of disagreements over certain core components within the Republican Party.

An Affordable Care Act plan stamped with the word "Repealed."

Image source: Getty Images.

Less than two months later, a second version of the AHCA was introduced with two new amendments. The first added more funding to help control premium inflation for patients with pre-existing conditions (the Upton Amendment), while the second allowed states to apply for a waiver to the minimum essential health benefits mandate (the MacArthur Amendment). This bill wound up passing by the narrowest of margins and, according to the CBO, would cause 23 million people to lose their insurance by 2026 -- 1 million fewer than the initial version. It also would reduce the long-term deficit (the CBO defines "long-term" as at least 10 years) by $119 billion when compared with Obamacare.

The BCRA is a baby step forward for the Senate GOP

Earlier this week, the CBO released its latest scoring of the Republican Senate's bill, dubbed the BCRA. Though there were some key similarities between the Senate and House bills, such as eliminating the individual and employer mandates associated with Obamacare, as well as the penalty for not purchasing health insurance, there were also some very big deviations . These include:

  • Income-based subsidies: The BCRA reinstitutes income-based subsidies as opposed to age-based tax credits as suggested by the AHCA. However, the subsidies aren't as generous for older adults, and they cap at 350% of the federal poverty level, as opposed to 400% of the federal poverty level under Obamacare.
  • Cost-sharing reductions: The federal government would fund cost-sharing reductions -- the subsidy paid to those earning up to 250% of the federal poverty level that helps reduce their costs of actually seeing a doctor -- through 2019, and then eliminate them. Under the AHCA, they would be gone next year.
  • Medicaid expansion: Medicaid expansion would also stick around through 2020, as intended by Obamacare, with the federal government covering up to 90% of total expenditures. However, each year thereafter there would be a decrease in funding supplied to the states of 5%, and Medicaid expansion would be eliminated by 2023.
  • Essential health benefits waiver: The BCRA allows the state waiver for the clause addressing 10 essential health benefits to remain in place, but it takes away the option to repeal the community rating, which is the provision mandating that people of the same location and age be charged the same premium.
Doctors discussing the fate of healthcare in America.

Image source: Getty Images.

According to the CBO's findings, the latest stab at healthcare by the GOP would result in 22 million fewer insured people by 2026. Once again, baby steps forward by Republican lawmakers. That's 1 million fewer than the second version of the AHCA, and 2 million lower than the initial version, but it's still a lot of people who would suddenly lose their access to health coverage.

In particular, there's concern about what this bill will do to lower-income folks and the elderly. Removing the option to repeal the community rating is a big win for those with pre-existing conditions. Also, keeping cost-sharing reductions and Medicaid expansion on the table for a few extra years is good news for low-income people. However, it doesn't negate the fact that cost-sharing reductions and Medicaid expansion are eventually going away, and Medicaid funding to the states will be done on a per-capita basis and grow at the same rate as the Consumer Price Index beginning in 2025. Long story short: Medicaid funding will fall, and low-income people and families will lose their coverage because of it.

You've overlooked two important figures in the CBO's scoring of the BCRA

Most people are rightly focusing on the big-picture number from the CBO's report of 22 million people left uninsured by 2026. However, if you didn't take the time to read through the impacts of the Better Care Reconciliation Act, you probably missed two additional important figures.

A stethoscope hovering over a pile of cash.

Image source: Getty Images.

First, the CBO predicts that average premiums will be 20% lower by 2026 than they would be under Obamacare in the same year. The House's healthcare bill was expected to yield about a 10% cut in premiums by 2026 . Though the CBO anticipates higher prices in the year or two following its passage, premium costs in 2020 and beyond should fall. The reason? States will have the option of waiving the essential health benefits mandate, thus allowing insurers to set up plans with narrower networks and a smaller number of minimum essential health benefits.

This is a bit of good news and bad news for consumers. On one hand, it means narrower networks should result in lower monthly premiums. If you aren't heading to the doctor often, your costs will probably drop for monthly premiums. The downside is that it allows insurers to more freely pass along out-of-pocket expenses to the consumer through higher deductibles. Thus, young adults who don't head to the doctor often should be paying less out of pocket, while those with pre-existing conditions and the elderly could be handing over even more of their income for medical care.

Second, the Senate healthcare bill provides a long-term deficit reduction of $321 billion compared with Obamacare. You'll note a $202 billion added reduction from the House's health bill. It's no secret that the GOP needs substantial savings from a new healthcare bill to help fund its increased spending on defense, as well as put forward an infrastructure spending package next year. An expected $321 billion in savings would certainly help achieve that goal.

A person cutting through a hundred dollar bill with scissors.

Image source: Getty Images.

More importantly, with the BCRA leaving the AHCA in the dust in terms of deficit reduction, it probably makes the Senate bill the leading candidate between the two bills.

But it's also important to recognize that there could be a mile-wide rift between the House and Senate over changes made to the bill, and there are no guarantees that the Senate even has enough support to pass the current bill without serious compromises. Republican lawmakers are going to have a very difficult time convincing the public that a plan that will leave 22 million more people without health insurance by 2026 is a good move. We may need more of those baby steps from GOP lawmakers before Obamacare's other foot is pushed out the door.

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