22 Million More Uninsured Under Senate GOP Health Care Bill, CBO Reports

Senate Republicans want to pass this legislation this week.

Twenty-two million fewer people would have health coverage over the next 10 years under legislation that Senate Republicans aim to bring to the floor for a vote this week, according to the Congressional Budget Office.

The measure would dramatically scale back federal funding for Medicaid and financial assistance that low- and middle-income people receive to make private health insurance affordable. The hundreds of billions of dollars saved would mostly be transferred to wealthy people and health care companies in the form of tax cuts. And the bill would reduce the federal budget deficit by $321 billion over the coming decade.

Senate Majority Leader Mitch McConnell (R-Ky.) wants the upper chamber to pass the bill, called the Better Care Reconciliation Act, as soon as Thursday. To date, at least five Republican senators have expressed opposition to the legislation, along with a variety of health care and patient groups, including the American Medical Association, the American Hospital Association and AARP.

Senate GOP leaders, who just released the text of the bill last Thursday, have already made major revisions, adding provisions that would lock people out of the health insurance market for six months if they go without health coverage for more than 63 days. That part of the bill is intended to prevent people from waiting until they develop costly illnesses or injuries to sign up for coverage.

The CBO score includes an evaluation of the six-month lockout. But further changes made to win over votes from reluctant Republican senators and amendments made on the floor likely won’t be analyzed before the expected vote ― meaning senators will probably have to take a position on the measure before they know all the facts about it.

The findings eradicate any reasonable hope that the Republican Congress would advance health care legislation that wouldn’t result in massive losses of coverage and a major retrenchment of the safety net. Twenty-two million more uninsured than under current law reflects a meager change from the 23 million more the budget agency projected for the House-passed bill and the 24 million more it predicted would result from an earlier version of the House legislation.

Since the Affordable Care Act coverage expansion began in 2014, an estimated 20 million previously uninsured people have gained coverage, and the national uninsured rate fell to a historic low. The Senate bill essentially would erase those gains. By 2026, 49 million Americans would be uninsured, compared with 28 million if the Affordable Care Act were left in place, the CBO concluded.

Coverage losses would begin almost immediately, according to the CBO. Next year, 15 million more people would be uninsured, mainly because the Senate bill repeals the ACA’s individual mandate that most people obtain health coverage. The numbers would climb in later years, reaching 19 million in 2020 and 22 million in 2026.

People currently enrolled in Medicaid or who would become eligible for that program over the coming decade make up most of the coverage losses. Between repealing the ACA expansion to that program and making deep cuts in federal funding for everyone who qualifies ― including children, people with disabilities, pregnant women and elderly nursing home residents ― Medicaid would cover 4 million fewer people next year and 15 million fewer by 2026, the CBO estimates.

The CBO noted that Medicaid coverage losses would be even larger after 2026 as the gap between federal funding and the cost of caring for the Medicaid population grew, although the agency said it could not provide specific estimates of how large those coverage losses would be.

An additional 7 million people over the next decade who would’ve had health insurance they purchased directly from an insurer or via a health insurance exchange would remain uninsured.

The Senate legislation would take $772 billion out of Medicaid and reduce spending on tax credits for private health insurance by $408 billion, the CBO estimated. The Medicaid cuts amount to more than one-quarter of the program’s projected spending under current law, including the ACA.

On the other side of the ledger is $541 billion in tax cuts for wealthy families, pharmaceutical companies, health insurers medical device manufacturers and other health care provides, the CBO report says.

Republicans have said over and over again that a primary goal of their proposed legislation is to reduce premiums for people buying coverage on their own rather than through an employer. Initially, their legislation would actually have the opposite effect, the CBO predicted, because so many healthy people would opt not to get coverage when there’s no individual mandate in place to compel them ― leaving insurers with sicker pools of beneficiaries that would, on average, drive up their costs.

By 2020, however, average premiums actually would come down relative to where they would be under current law. They’d drop by 30 percent initially, then settle at 20 percent below where they would be if the Affordable Care Act remained law.

But, the CBO warned, premiums would come down because people would have plans with higher out-of-pocket costs. In other words, the insurance would cost less every month because it would cover less, leaving patients to bear a larger share of their medical expenses.

“Most people ... would have higher out-of-pocket spending on health care than under current law.”

- Congressional Budget Office report on Senate bill

Thanks to the way the Senate bill changes financial assistance for people buying coverage, tax credits for buying coverage would shrink overall, making it difficult for people to buy more generous coverage. In addition, some states would start allowing insurers to leave out benefits, such as mental health coverage, that the ACA requires. The Congressional Budget Office expects a large number of states would drop the required coverage under pressure to bring premiums down.

“Because nongroup insurance would pay for a smaller average share of benefits under this legislation, most people purchasing it would have higher out-of-pocket spending on health care than under current law,” the CBO concluded.

This would be difficult for people with serious medical problems, the CBO warned, as they would face crippling medical expenses. And for low-income people ― many of whom, under Obamacare, qualify for Medicaid ― the prospect of such out-of-pocket costs make coverage essentially worthless. “Few low-income people would purchase any plan,” the CBO said.

Older, poorer insurance buyers would see higher prices because insurers could charge them five times more than what younger customers pay. It was up to three times more under the Affordable Care Act. Coupled with smaller tax credits for private health insurance, poor people in their 60s would be hit hardest. Moreover, since older people tend to have greater health care needs, insurance policies with fewer benefits and larger deductibles would leave them on the hook for more costs.

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