The Congressional Budget Office has spoken. The enigmatic number-crunching office has finally released an updated score on the American Health Care Act, just three weeks after the Republican Obamacare replacement passed the House without a score.
Despite the suspense, speculation that the law wouldn’t save enough to pass muster under Senate reconciliation rules, and an entertaining waiting game on Twitter, the CBO score shows a law that will go to the next chamber almost precisely as broken as it was after its first score, even after key fixes to high-risk pools that Republicans claimed would help the sickest Americans.
First, the numbers. The CBO estimates that the new-and-improved AHCA will save the government $119 billion by 2026, and will increase the number of uninsured people by 23 million over estimates for that same period under current law. That’s about a third of the federal savings of $337 billion under the draft of the AHCA scored in March, but only a decrease of 1 million over its estimate of 24 million people losing insurance by 2026. To summarize the top-line differences between the two versions of the bill, the final version the House voted on spent an additional $218 billion to insure 1 million additional people.
Much of the substantial changes in the final version of the House bill came from amendments that expanded funding for state high-risk pools in the Patient and State Stability Fund, as well an amendment from Representative Tom MacArthur that would provide additional Patient and State Stability Fund money to states that waive certain aspects of essential health benefits and community rating. That amendment proved controversial because it essentially allows states to permit barebones insurance packages in exchange markets, and gives insurers some limited flexibility to price out people for pre-existing conditions or discontinue coverage for services like maternity care. These provisions were expected to have a net effect of decreasing overall premiums while potentially increasing them for certain vulnerable groups in some states.
The CBO score finds that the AHCA amendments would do just that. Overall, the CBO finds employers would be more likely to provide coverage in states that chose to waive some essential benefits, which means more healthy and young people would be able to sign up for insurance coverage than under the original draft. But on balance, fewer people overall would sign up for coverage in the exchange markets. Most of them would have slightly lower premiums than under the original law, but sicker people or those in need of services excluded in state waivers would face much higher premiums. “Such services include coverage for maternity care, mental health care, substance abuse, rehabilitative and habilitative treatment, and pediatric dental care,” according to the CBO.
In lowering average premiums for healthy people and increasing coverage via employers, the new additions to the AHCA obscure just how dramatically it warps insurance coverage for sicker people. Under the original draft, premiums for older, low-income people in exchanges could increase by as much as eight times their current amounts. The new AHCA doesn’t change that increase much in waiver states that choose to bolster their high-risk pools, and actually increases the spike in states that choose not to modify their essential health benefits:
Additionally, the newly-amended law provides more avenues for price-gouging and denial of people who need more services, including for maternity care, mental-health services, and even hospitalizations. The bolstered Patient and State Stability Fund and its state high-risk pools are simply not even close to enough to offset premium increases for the sickest people, and for those unable to afford care. These changes, of course, come in addition to drastic cuts to the Medicaid program that would diminish the health safety net and would be less able to absorb sick people who can’t afford private insurance.
The amendments not only fail to solve the original AHCA’s problems; they also have the potential to make things much worse. The CBO report finds that under the MacArthur amendment’s waivers, “about one-sixth of the population resides in areas in which the nongroup market would start to become unstable beginning in 2020.” For sicker people, community-rated premiums in states that choose to waive federal insurance protections would increase, to the point where they “would ultimately be unable to purchase comprehensive nongroup health insurance at premiums comparable to those under current law, if they could purchase it at all—despite the additional funding that would be available under H.R. 1628 to help reduce premiums.”
In layman’s terms, the CBO predicts that about 54 million people live in places where under the AHCA people with pre-existing conditions and severe illnesses won’t be able to afford insurance on the exchanges at all within a matter of years.
As Mark Mazur of the Tax Policy Center notes, the new AHCA “looks a lot like the old one.” The core of the law is still a major tax break for wealthier families that offsets their lost revenues by making health insurance unavailable or unaffordable for many people with the highest health-care costs. Though highly touted, reforms like high-risk pools and state waivers don’t change the internal logic of the law, even if they slightly ameliorate the law’s large increases in uninsured people. Indeed, in many places and for many people with pressing health needs, the AHCA that will go on to the Senate is somehow a worse bill than the AHCA in March.