As expected, the amended version of the House Republican bill to replace the Affordable Care Act would achieve less than half the budgetary savings of the original bill over a decade, with the same coverage losses, the nonpartisan Congressional Budget Office reported Thursday.
Federal Medicaid spending reductions would dip from $880 billion over 10 years in the original version of the proposed American Health Care Act to $839 billion.
But the revised bill would still result in a similar sharp decline in the number of Americans with health insurance—14 million more uninsured in 2018 and 24 million more uninsured by 2026, the CBO estimated.
The updated CBO findings offer no solace to House and Senate Republicans who are nervous about lots of their constituents losing their private insurance or Medicaid coverage under the GOP bill. And the reduced budgetary savings could make the bill less appealing to conservative fiscal hawks, some of whom already oppose the bill on the grounds that it's too expensive.
The CBO did not score a provision that House Republicans reportedly want the Senate to insert in the bill to boost coverage among people aged 50 to 64. It would establish a “reserve fund” of about $90 billion for tax credits to help Americans in that age group, whom the CBO said would suffer big coverage losses under the AHCA because the new tax credits would not be nearly as generous as the ACA's.
The proposed American Health Care Act with the so-called manager's amendments released last week would reduce federal deficits by $150 billion over the 2017-26 period, compared with deficit reduction of $337 billion under the original bill.
Savings would be reduced by earlier repeal of the ACA's taxes, a higher Medicaid spending cap for elderly and disabled beneficiaries, and a lower threshold for determining the medical care deduction on people's income tax returns.
The savings reductions would be somewhat offset by an amendment to require Medicaid beneficiaries to satisfy work requirements, which would lead to fewer people receiving Medicaid coverage. In addition, the federal government would save more money than under the original bill by letting states receive Medicaid payments in the form of block grants rather than per capita allocations.
The manager's amendments would:
• End most of the ACA's taxes at the end of this year, one year earlier than in the original bill.
• Bar any new states from expanding Medicaid to low-income adults and receiving enhanced federal funding for that population.
• Establish a work requirement for adult Medicaid enrollees who aren't disabled, elderly or pregnant.
• Give states the option to receive federal Medicaid funding in the form of fixed block grants (not based on number of enrollees) or per capita allocations.
• Increase the growth rate of capped federal payments to the states for elderly and disabled beneficiaries by the medical component of the Consumer Price Index plus 1 percentage point; the growth rate for other beneficiary groups would be the medical component of CPI.
• Delay implementation of the ACA's excise tax on high-value employer health plans for an additional year, from 2025 to 2026.
• Penalize New York state for requiring some counties to contribute to Medicaid funding.
The CBO projected that the decline in Medicaid coverage after 2020 would be smaller than in its previous estimate, mainly because of the revised bill's slightly higher cap on federal payments to states for aged, blind and disabled enrollees. The agency had estimated that 14 million people would lose Medicaid coverage over a decade because of the original bill's provisions.
But the agency said other amendments in the bill's Medicaid provisions would work in the opposite direction, reducing coverage. Those include letting states establish work requirements for beneficiaries; allowing states to receive federal payments in the form of block grants; and reducing per capita payments to New York state in proportion to any payments the state receives from counties.
The CBO did not consider another amendment the White House proposed to House ultra-conservatives Thursday. It would repeal the ACA's requirement that all fully insured plans in the individual and group markets offer 10 categories of minimum essential benefits.
Conservatives argue that this would reduce federal spending by lowering health plan premiums paid for with the bill's premium tax credits. But some Republicans fear that provision would boost federal spending on tax credits by making premiums more affordable and inducing more people to use the credits.
It's uncertain how the CBO would score the coverage impact of eliminating the ACA benefit requirements, because the agency previously has said that it wouldn't consider people covered if their insurance was too skimpy.