Health care bill winners (wealthy) and losers (Medicaid recipients), according to the CBO
Maureen Groppe
WASHINGTON — The nonpartisan Congressional Budget Office’s analysis of the Senate’s plan to overhaul the Affordable Care Act does not offer help to Republicans hoping to get enough votes for passage.
Taxes would be cut, but the ranks of the uninsured would increase. Premiums would go down, but total out-of-pocket costs for health care would go up. And the changes would affect older, poorer people the most.
“Uniquely among any major piece of legislation I can recall, it would produce many more losers than winners," said Drew Altman, head of the nonpartisan Kaiser Family Foundation which has extensively analyzed the legislation.
Here are some of the key points of CBO's review:
What’s the bottom line for taxpayers?
Taxes imposed on the wealthy and sectors of the health care industry to pay for the ACA’s expansion of coverage would be rolled back. But the bill would still end up reducing the deficit by $321 billion over 10 years, mostly because of reductions in Medicaid spending.
The government would spend about 26% less on the joint federal and state program for the poor and disabled than under current law by 2026, a savings of $160 billion that year and $772 billion over 10 years.
A smaller chunk of savings would come from reducing the subsidies that help middle- and lower-income people afford private insurance if they’re not eligible for Medicaid and don’t get coverage through an employer.
How would that affect the number of people who have insurance?
About 22 million fewer people would have insurance than under current law by 2026. Initially, the changes in coverage would come from a mix of Medicaid, the private insurance market and employer-based plans. Some people would choose not to have coverage and some employers would not offer it because the bill would remove the penalties for not doing so. Others would no longer be able to afford coverage because of the substantial cut in subsidies. By 2026, most of the reductions in coverage would in Medicaid, with about 15 million fewer people getting health care through the program.
Who would that affect the most?
The increase in the uninsured would disproportionally affect older people with lower incomes. In particular, it would hurt those 50 to 64 years old who make less than about $24,200.
How would Medicaid change?
The federal government would ratchet down funding for the low-income adults who became eligible for Medicaid under the ACA. The government would also cap the total amount of Medicaid funds a state could receive. Because states would have to pick up a greater share of the cost, some would impose work requirements on able-bodied Medicaid recipients to reduce enrollment, which the Senate bill would allow.
In general, however, states would not have much additional flexibility to run their Medicaid programs the way they want unless they chose to accept even less Medicaid funding through a block grant. That would let states change some benefits and charge patients more.
Over time, there would be increasing pressure on states to spend more of their own funds or to reduce costs through program efficiencies, cutting payments to health care providers and insurance companies that manage the programs, eliminating services or reducing eligibility.
Would there be more private insurance options?
Republicans argue they have to remedy Obamacare because insurers are pulling out of the market for people who aren’t offered coverage through an employer. The Congressional Budget Office says the insurance market will be largely stable whether Obamacare continues or the Senate legislation becomes law. There would be pockets of problems under both scenarios for different reasons. Under current law, some areas could lack participating insurers because of uncertainty about fluctuating federal policy. Under the Senate bill, the reduced subsidies could lead to some areas having no insurance options, or only high cost plans.
Would premiums go up or down?
While premiums would initially be larger than what’s expected under current law, they would later be lower. But that is primarily because of skimpier coverage. Most people in the individual market would pay more in total health costs than under Obamacare because plans would cover a smaller share of benefits. And higher deductibles will keep some from buying insurance, even if they get subsidies to reduce the premiums. For example, a person making $11,400 might pay a meager $300 in annual premiums, but then have to spend half their income on the deductible.
Would pre-existing conditions be covered?
While the bill would still prevent insurers from declining coverage to those with a pre-existing condition, states could get permission from the federal government to loosen insurance rules on minimum benefits and maximum out-of-pocket costs. Coverage for maternity care, mental health and some expensive drugs could be at risk because those services have high costs and are used by few people. Insurance coverage for those services would become extremely expensive in some areas, just as they were before the ACA.
CBO expects about half the states to make changes to insurance rules, which they agency said would increase costs to taxpayers without increasing the number of people with insurance.
What other actions could a state take that would affect private insurance?
Most states are expected to accept a provision in the Senate bill allowing insurers to charge the elderly five times more than youths, instead of the Obamacare limit of three times as much.
About half the population lives in states that are likely to no longer cap how much insurers can profit or spend on their own administration from the premiums they collect. In those states, premiums could rise for lack of competition and the government would have to spend more on premium subsidies.
What happened with Planned Parenthood?
The bill would ban federal funding to Planned Parenthood for one year. While the law already prevents federal funding from being spent on most abortions, the bill would block Planned Parenthood from treating Medicaid patients for other services such as birth control or cancer screenings. This would reduce care to about 15% of women in areas without other health care options for low-income residents and lead to increased spending on births covered by Medicaid.
How does the Senate bill compare to the House version?
The Senate bill would reduce deficits by $202 billion more than the version the House passed in May. The expected drop in the number of people without insurance would be nearly as much as under the House bill.
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