Congressional accountants confirmed today what independent experts long expected: The Republican plan to repeal the Affordable Care Act will leave many Americans facing higher costs and millions will lose their coverage.
All told, 24 million fewer Americans would have health insurance over the next decade, and premiums on individual healthcare insurance would increase as much as 20% in the next two years, according to a new report (pdf) from the Congressional Budget Office.
The analysis counters extremely rosy perspectives from the bill’s supporters—one of whom, White House budget director Mick Mulvaney, said on NBC over the weekend, “I firmly believe that nobody will be worse off financially in the process that we’re going through.”
The CBO found that a 21-year old earning $21,000 a year would in effect receive $950 less each year for health insurance via the tax credits proposed in the Trump plan. A separate analysis performed by the consultants Oliver Wyman found that individual costs will increase significantly, especially for elderly people and rural residents.
The bill, backed by president Donald Trump and largely authored by Republican speaker of the House Paul Ryan, is designed to repeal many of the measures put in place by the health-care overhaul that Congress and the Obama administration enacted in 2010.
That bill mandated individuals to buy health insurance, created new subsidized markets for them to buy it on, and put in place rules requiring private insurers to offer a certain standard of care. The law also pushed for cost savings in Medicare, the government-sponsored health insurance for seniors, and expanded Medicaid, government health insurance for the poor.
The new bill, known as the American Health Care Act, ends the individual mandate and the subsidized marketplaces, replacing them with tax credits. It cuts Medicaid spending and repeals rules that prevent insurance companies from charging elderly people more money and from selling health care plans that don’t cover key kinds of care. Finally, it will repeal the tax increases that allowed the government to pay for new coverage under Obamacare.
How will this affect Americans? Almost immediately, by 2018, 14 million Americans would find themselves without coverage, the CBO finds, due to higher premiums or because they are no longer required to obtain insurance by law. Roughly 6 million will leave the individual market, about 5 million will be cut from the Medicaid roles, and 2 million fewer will have insurance provided by an employer. By 2026, a total of 24 million previously insured people would be without insurance, leading to worse health overall and more medical bankruptcies.
Indeed, in 2018, premiums on individual policies would be 15% to 20% higher than they would be otherwise. This highlights the curious position of the White House: While president Trump has repeatedly promised to give more people access to cheaper health care both on the campaign trail and in office, this bill would do the exact opposite.
“We’re going to have insurance for everybody,” the then president-elect told the Washington Post in mid January. “There was a philosophy in some circles that if you can’t pay for it, you don’t get it. That’s not going to happen with us.”
His plan is finding one way to cut costs. The CBO says that premiums in 2026 will be 10% lower than under Obamacare. Mostly, that will be because insurers will no longer be required to offer comprehensive coverage for basics like emergency-room visits or pre-natal care.
The bill does have one set of winners: It will eliminate $900 billion in government revenue, about $300 billion of which will come in the form of tax cuts for the highest earners. However, because it also cuts spending on health care by $1.2 trillion, the CBO expects it to reduces overall US borrowing by $337 billion over a decade.
This saving, however, is intended to mask a bigger set of tax cuts that Republicans hope to tee up in the fall, should they succeed in enacting this bill.