CBO Analysis Endangers GOP Health-Care Bill

The report from the Congressional Budget Office found the proposal would leave 22 million uninsured, seeing little difference in impact from the House-passed American Health Care Act.

J. Scott Applewhite / AP

Updated on June 26 at 7:35 p.m. ET

The Senate Republican health-care bill would increase the ranks of the uninsured by 22 million over a decade, the Congressional Budget Office found on Monday in an analysis that could determine the proposal’s fate on Capitol Hill.

The CBO’s highly-anticipated report projected just a slight difference in impact between the measure that GOP Senate leaders wrote in secret and a widely-criticized plan the House narrowly passed last month. A key group of undecided senators said the analysis by the non-partisan budget office could determine their votes this week, and the CBO’s finding of steep coverage losses and cuts to Medicaid over the next decade could make it even more difficult—if not impossible—for Majority Leader Mitch McConnell to assemble the 50 votes he needs to pass the bill. Barely two hours after the report’s release, critics of the bill appeared to have enough votes to block McConnell from bringing it to the Senate floor barring a last-minute agreement on changes to the proposal.

Senators Susan Collins of Maine, Rand Paul of Kentucky, and Dean Heller of Nevada all indicated they would vote against a procedural motion to start debate on the bill, effectively stalling it. With 52 seats, Republicans can lose no more than three votes to advance legislation with a simple majority.

The Senate is beginning a potentially decisive week in the GOP’s long-running and arduous attempt to roll back the Affordable Care Act. McConnell and other GOP leaders have thus far rejected pleas from several Republican senators for more time to consider and revise the bill released last Thursday; they are determined to finish the bill before Congress breaks for a July 4 recess and are gambling that wavering Republicans will ultimately fall back in line rather than torpedo the party’s top legislative priority in a climactic vote.

“I am closing the door,” Senator John Cornyn, the second-ranking Republican, tweeted on Monday morning after earlier suggesting a vote could wait until July. “We need to do it this week before double digit premium increases are announced for next year.”

In perhaps the most damaging finding for Republicans, the CBO projected that the number of uninsured people would spike by 15 million in a single year if the Senate bill, titled the Better Care Reconciliation Act of 2017, became law. That number would grow to 22 million by 2026. Average premiums would also go up initially before dropping over time. They would be 30 percent lower in 2020 than under current law, the CBO found, and 20 percent lower in 2026.

Republicans can point to more favorable findings from the CBO in other areas. The legislation would reduce the deficit by $321 billion over a decade, as the steep cuts in government spending outweigh the elimination of taxes in Obamacare. That could give GOP leaders breathing room to add money sought by moderates, either to reduce the cuts to Medicaid or to bolster support for states combatting the opioid epidemic. Under Senate budget rules, the legislation cannot add to the deficit over a 10-year window.

As to the broader stability of the insurance market, the CBO saw the Senate bill as having less of an impact than either its critics or defenders have claimed. The budget office wrote that despite rising premiums and GOP assertion’s that Obamacare is “collapsing,” the individual insurance market remains stable in most part of the country. And the Senate bill would do little to change that. But it did warn that after 2019, “a small fraction of the population” would reside in areas where “no insurers would participate in the nongroup market or insurance would be offered only with very high premiums.” The CBO also found that even though average premiums would drop, out-of-pocket costs would rise for many people because plans would cover fewer services and have higher deductibles. “As a result, despite being eligible for premium tax credits, few low-income people would purchase any plan,” the report predicted.

By comparison, the House’s American Health Care Act would have resulted in 23 million fewer people having insurance after a decade, the CBO estimated last month, with a large chunk of those losses resulting from a $834 billion cut to Medicaid. That finding—along with polls showing the bill to be deeply unpopular—prompted Republicans in the Senate to start over and write their own bill to partially repeal and replace the Affordable Care Act. But the CBO on Monday confirmed that the proposal Senate leaders came up with was broadly similar to the House bill.

Some top Republicans have cast doubt on the CBO’s credibility and contested its coverage findings. Tom Price, the secretary of health and human services, said Sunday during a forum hosted by The Atlantic at the Aspen Ideas Festival that the CBO’s projection of insurance losses was “not accurate.” Other Republicans, including House Speaker Paul Ryan, have cherry-picked the analysis, highlighting more favorable projections on deficit reduction and premiums while disputing the rest. That’s the approach McConnell took on Monday afternoon. “The Senate will soon take action on a bill that the Congressional Budget Office just confirmed will reduce the growth in premiums under Obamacare, reduce taxes on the middle class, and reduce the deficit,”the majority leader said in response to the report. “The American people need better care now, and this legislation includes the necessary tools to provide it.”

But the Senate Republicans that McConnell now needs the most—Collins, Lisa Murkowski of Alaska, Ron Johnson of Wisconsin, and Rob Portman of Ohio among them—have all said they would look to the CBO in assessing the bill’s impact on their constituents. And they did not like what they saw. “I want to work w/ my GOP & Dem colleagues to fix the flaws in ACA. CBO analysis shows Senate bill won't do it,” Collins tweeted, adding that she would vote against procedural motion to begin debate on the bill. Several other Republicans similarly voiced concerns with the CBO report, while Johnson and Paul appeared to intensify their opposition to a vote this week. Heller, who is up for reelection next year, came out against the proposal on Friday.

Conservatives have been more critical of the CBO’s analysis, but they, too, were looking to the report for clues as to whether the Senate bill would fulfill their stated priority of lowering premiums for most consumers. Senators Paul, Ted Cruz of Texas, and Mike Lee of Utah are all pushing to move the bill further to the right so that it would eliminate or allow states to opt out of Obamacare’s prohibition on insurers charging higher rates to people with preexisting conditions. They blame that core protection in the current law for forcing companies to raise premiums across the board to compensate for the higher cost of covering sicker people. “At this point, we need to do considerably more to lower premiums,” Cruz said after the release of the CBO’s analysis, according to Bloomberg. “Significant work remains to be done.”

The CBO released its analysis hours after Republicans added a provision that would lock people out from insurance coverage for six months if they were previously uninsured for more than 63 days. The change was designed as an incentive to replace Obamacare’s individual mandate forcing people to pay a tax penalty if they go without coverage. Without the provision, analysts predicted the bill would send insurance markets into a death spiral because younger, healthier people would take advantage of protections for people with preexisting conditions and wait until they got sick to purchase  coverage.

Prior to the report’s release, McConnell was already facing opposition that could prove insurmountable. The American Medical Association joined other health-industry organizations in opposing the bill, writing in a letter that it violates the central precept of medicine to “first, do no harm.” And Johnson, one of the more surprising Senate holdouts, embarked on a public campaign to delay consideration of the bill beyond this week.

“They’re trying to jam this thing through,” Johnson complained to the conservative commentator Hugh Hewitt in a combative radio interview, during which Hewitt begged the senator to support the bill in the name of party unity. Johnson outlined his concerns with the bill in The New York Times, saying it ignores the “plight” of people suffering under Obamacare, “relies too heavily on government spending, and ignores the role that the private sector can and should play.”

Johnson reportedly reiterated his concerns with the process after the CBO report came out, warning that he might vote against even bringing up the bill for debate if McConnell moved too fast. Another undecided Republican, Senator Bill Cassidy, said on CNN: “It certainly makes me more concerned.”

Republican leaders are also likely to face challenges persuading the Senate parliamentarian that some provisions in their bill pass muster under the chamber’s complex reconciliation process, which requires that legislation stick to taxes and spending rather than general matters of policy. The new waiting period along with measures aimed at restricting taxpayer funding of abortion could in jeopardy when the parliamentarian rules later this week.

Taken together, the criticisms levied by Johnson, Paul, Collins, Heller, and others would appear to be irreconcilable. McConnell can lose no more than two Republicans, and the seven or eight that have fundamental issues with the bill are attacking it from opposite directions. But none of them have yet ruled out supporting the proposal with changes, giving GOP leaders some hope they can win their support in the coming days.

The CBO’s finding on Monday, however, made that effort more difficult.