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June 13, 2017 01:00 AM

CMS actuary predicts GOP repeal bill will reduce coverage by 13 million

Harris Meyer
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    The CMS Office of the Actuary on Tuesday estimated that the House-passed American Health Care Act would reduce insurance coverage by 13 million people by 2026 —10 million less than the Congressional Budget Office's prediction.

    But the actuary estimated that average net premiums paid by consumers in the individual insurance market in 2026 would be about 5% higher than under current law, and that average cost-sharing amounts would be about 61% higher.

    The CMS actuary's report projected that the AHCA, narrowly passed by House Republicans last month with no Democratic votes, would reduce federal Medicaid spending by $383.2 billion from 2017 through 2026. The spending reductions would stem mainly from repealing the Affordable Care Act's Medicaid expansion to low-income adults. That's far less than the $834 billion in Medicaid cuts projected by the CBO.

    There would be 8 million fewer people covered by Medicaid in 2026 compared with current law, according to the report from Paul Spitalnic, the chief actuary. The CBO projected a Medicaid coverage decline of 14 million.

    The CMS actuary said the AHCA would reduce federal spending by $328 billion over 10 years, mainly due to lower Medicaid expenditures. The CBO projected that the bill would reduce federal deficits by $119 billion.

    While the coverage losses projected by the CMS actuary were lower than those projected by the CBO, Democrats and other critics of the House GOP bill, including healthcare providers, still will argue that millions fewer Americans would have coverage under the legislation.

    By 2026, 43 million people would be uninsured, compared with 31 million under current law, according to the CMS actuary. The CBO, headed by Republican-appointed economist Keith Hall, projected that 51 million would be uninsured under the AHCA, compared with 28 million under current law.

    In addition, the AHCA would cause the Medicare Hospital Insurance Trust Fund for inpatient care to become insolvent in 2026, two years earlier than under current law. That's because the AHCA would repeal the ACA's additional Medicare payroll tax on wealthy Americans and increase Medicare disproportionate-share payments to hospitals because they would be serving more uninsured patients.

    The CMS actuary predicted that 25% of states would seek waivers under the AHCA from Obamacare's requirements that all insurers offer essential health benefits and not consider applicants' pre-existing conditions in setting premiums.

    The Office of the Actuary said it's possible that such waivers "could result in a deteriorating or possibly failing market depending on how a state chose to implement the waiver."

    That's consistent with the CBO's prediction that waivers could create instability in the individual insurance market, make premiums unaffordable for people seeking to buy comprehensive health plans, and substantially hike out-of-pocket costs for people seeking maternity, mental health and substance abuse services.

    The AHCA's per capita cap on total federal Medicaid spending would lead to a 0.5 percentage point cut per year in federal payments to the states, according to the actuary.

    The reduction from the per capita cap would total $64.9 billion over 10 years, while the reduction from the repeal of Medicaid expansion funding would total $274.8 billion.

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