CBO report predicts 24 million would lose coverage by 2026 under American Health Care Act

An estimated 14 million people would lose coverage under the American Health Care Act, a number that would rise to 24 million by 2026, according to a Congressional Budget Officer report released Monday afternoon.

Most of the initial loss would be due to repeal of the federal mandate for individuals to buy coverage, due to lack of a financial penalty and higher premiums.

Uninsured numbers would rise due to the bill's repeal of Medicaid expansion. Some states would discontinue the expansion. Also per beneficiary spending caps would affect coverage, the CBO said.

Health and Human Services Secretary Tom Price, MD, said the CBO's findings are inaccurate and make assumptions that do not translate to the real world.

"The CBO report's coverage numbers defy logic," Price said by statement. "They project that zeroing out the individual mandate – allowing Americans to choose whether to have insurance – will result in 14 million Americans opting out of coverage in one year. For there to be the reductions in coverage they project in just the first year, they assume five million Americans on Medicaid will drop off of health insurance for which they pay very little, and another nine million will stop participating in the individual and employer markets."

The CBO report does not incorporate two-thirds of the healthcare reform plan, which are regulatory relief and additional legislative reforms Congress will be pursuing, he said.

"Our three-pronged approach will free patients to purchase coverage that works best for them at a price they can afford," Price said. "Doctors and patients understand that, especially under current law, having coverage is not the same thing as having access to the care one wants or needs. Our approach will provide Americans with relief from the collapsing healthcare law, which never delivered on the benefits projected by the Congressional Budget Office in the first place."

The CBO report said that due to a lack of subsidies for insurance purchased in the nongroup market and to the Medicaid program, the increase in the number of uninsured people would rise to 21 million in 2020 and then to 24 million in 2026, the CBO said.

"In 2026, an estimated 52 million people would be uninsured, compared with 28 million who would lack insurance that year under current law," the CBO said.

Premiums are expected to rise 15 to 20 percent in 2018 and 2019.

Older Americans would pay five times the amount on their premiums as compared to younger enrollees.

However starting in 2020, the increase in the average premium would be offset by factors that would decrease premiums, the CBO said.

This includes grants to states from the Patient and State Stability Fund to limit costs to insurers of beneficiaries who have very high claims. Insurers would no longer have a requirement to offer plans covering a portion of the cost of covered benefits, and a younger mix of enrollees is projected.

By 2026, average premiums in the nongroup market are projected to be about 10 percent lower than they are currently, the CBO said.

[Also: GOP plan would cause 15 million to lose coverage, report says]

The CBO did its report based on House committee hearings last week approving to move forward the American Health Care Act as a repeal and replacement bill to the Affordable Care Act.

Democrats were swift to react to the CBO's findings.

Ways and Means Committee Ranking Member Richard Neal of Massachusetts and Energy and Commerce Committee Ranking Member Frank Pallone, Jr. of New Jersey released a joint statement.

"Today's CBO report now confirms what we already knew: despite promises that 'everyone would be covered' and 'no one would be worse off,' this Republican bill would rip away health insurance from 24 million Americans over the next decade and ask millions to pay more for less coverage," they said. "Despite warnings from independent experts like CBO and others, Republicans continue to recklessly jam this bill through Congress without so much as a single hearing on what effects their plan will have on middle-class families. This report also reaffirms that the Republican plan does absolutely nothing to control costs or protect consumers. Instead, it guts Medicaid, raises costs on older Americans, and pulls billions of dollars from Medicare, all in order to pay for tax cuts for the rich."

[Also: House Committees advance Republican healthcare bill after pulling all-nighters]

House Speaker Paul Ryan said, "This report confirms that the American Health Care Act will lower premiums and improve access to quality, affordable care.  CBO also finds that this legislation will provide massive tax relief, dramatically reduce the deficit, and make the most fundamental entitlement reform in more than a generation."

The report does not take into consideration additional steps Congress and the Trump administration are taking to further lower costs and increase choices, Ryan said.

There will be a stable transition so that no one has the rug pulled out from under them, Ryan said.

"I recognize and appreciate concerns about making sure people have access to coverage," he said. "Under Obamacare, we have seen how government-mandated coverage does not equal access to care, and now the law is collapsing. Our plan is not about forcing people to buy expensive, one-size-fits-all coverage. It is about giving people more choices and better access to a plan they want and can afford."

The CBO and the Joint Committee on Taxation estimate that the legislation would reduce federal deficits by $337 billion between 2017 and 2026.

Outlays would be reduced by $1.2 trillion over ten years and revenues by $0.9 trillion.

[Also: Fact-checking GOP claims about the American Health Care Act]

The largest savings would come from a reduction in Medicaid spending from the elimination of the Affordable Care Act subsidies for nongroup health insurance.

The largest costs would come from repealing changes in the ACA to the Internal Revenue Code, including an increase in the hospital insurance payroll tax rate for high-income taxpayers, a surtax on those taxpayers' net investment income, and annual fees imposed on health insurers - and from the establishment of a new tax credit for health insurance, the CBO said.

Other reactions to the bill:

American Medical Association:

"Today's estimates from the nonpartisan Congressional Budget Office underscore the AMA's concerns about the AHCA as it is written: If this bill were to become law, CBO projects 14 million Americans who have gained coverage in recent years could lose it in 2018. For the AMA, that outcome is unacceptable. While the Affordable Care Act was an imperfect law, it was a significant improvement on the status quo at the time, and the AMA believes we need continued progress to expand coverage for the uninsured. Unfortunately, the current proposal – as the CBO analysis shows – would result in the most vulnerable population losing their coverage."

American Hospital Association:

"The CBO number reinforces our concerns about the importance of maintaining coverage for those vulnerable patients who need it. As we said in our letter to Congress last week, any changes to the ACA must be guided by ensuring that we continue to provide health care coverage for the millions of people who have benefited from the law. We cannot support a bill that the CBO and others clearly indicate would reduce coverage for so many people."

America's Essential Hospitals:

"Coverage is vital, not only for the health and well-being of patients but also for our hospitals. If coverage declines as CBO predicts, the likely rise in uncompensated care costs would fall hardest on hospitals for vulnerable patients--essential hospitals. These hospitals, which already operate with little or no margin, could not sustain these additional costs. Fewer services and workforce reductions almost certainly would follow in many communities. The estimated coverage losses in the CBO report are unacceptable. Patients and providers will suffer, and the cost shift will strain state and local government budgets. Given this estimate from CBO--a trusted, bipartisan source--we must halt the repeal process until we can ensure those who have coverage now can keep it."

Small Business Majority:

"Small employers don't want or need another healthcare overhaul, especially one that takes so many insured Americans out of the market. Instead, entrepreneurs need quality, affordable health coverage for themselves and their employees so that they can focus on running their businesses. As the CBO's estimate shows, lawmakers would be wise to abandon this proposal in favor of policies that will actually help America's job creators."

Twitter: @SusanJMorse