On Monday, March 13th, the Congressional Budget Office (CBO) announced that the American Health Care Act (AHCA) will reduce healthcare enrollments by 24 million by 2026 with 14 million coming off of the health insurance rolls by 2018. The CBO Estimate of the AHC also stated that the AHCA would reduce the federal deficit by $337 billion over the next ten years.
According to the report, the reduction in the number of insured Americans is primarily due to the elimination of the individual and corporate mandates and the roll back of Medicaid expansion. Said another way, healthy individuals who purchased health insurance specifically to avoid a tax penalty for not carrying insurance may drop the coverage now that the financial penalty for not having coverage has been eliminated.
In addition, individuals who became Medicaid eligible during the Medicaid expansion which occurred with the implementation of the Affordable Care Act (ACA), may also opt out of carrying health insurance once their Medicaid eligibility is rolled back. The $337 billion deficit reduction is attributed to a forecasted dramatic decrease in outlays for Medicaid and to the elimination of the ACA’s subsidies for non group health insurance.
Obviously, the headline that 24 million people will lose their health insurance under the American Health Care Act is not a good headline for President Trump who campaigned on all Americans being insured. The media’s discussion of the CBO’s analysis of premium costs under the AHCA has also been damaging.
An analysis of the 37-page report by The Washington Post points out that with the new plan “a 21-year-old making $68,200 would pay an average of $1,450 for a year’s worth of insurance premiums after the new tax credits, compared with $5,100 under the current law.” However, a 64-year-old making $26,500, would see his healthcare costs skyrocket from $1,700 to $14,600.
The White House has tried to downplay the findings of the non-partisan CBO. Health and Human Services Secretary Tom Price described the healthcare enrollment figures cited by the CBO’s as “not believable” and also stated that they did not take the full plan into account when preparing their analysis.
Enhancements such as the ability to purchase health care across state lines will be implemented with phase 2 and phase 3 of the plan. “We think that CBO simply has it wrong,” Price told reporters at a joint press conference on Monday with Office of Management and Budget Director Mick Mulvaney who described the CBO as “terrible at counting coverage.”
“The report does estimate an eventual 10 percent decline in premiums, but the short term view shows premiums spiking 15 to 20 percent,” Mulvaney added.
My prediction is that we are going to see a lot more analysis of the CBO report before the American Health Care Act even makes it to the full House vote.
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