The CBO Scored the Latest Draft of the Senate's Health-Care Bill

The budget agency found the Senate’s new version of its Obamacare-replacement plan would leave the same number of people uninsured as the original.

Mitch McConnell, the Senate majority leader
Senate Majority Leader Mitch McConnell, who's been lobbying his fellow lawmakers on the plan (Mark Wilson / Getty)

Keeping up with the Congressional Budget Office can be tough these days. While Congress itself is often slowed by gridlock and party obstruction, the legislators’ independent budgetary agency has done yeoman’s work this year, churning out funding and coverage analyses for six different laws either repealing or replacing Obamacare.

On Thursday, the CBO released another, finding that a revised version of the Senate’s replacement plan isn’t all that different from the draft they scored before. It would increase the number of uninsured people by 15 million in 2018 and by 22 million over the next decade, and would decrease the federal deficit by $420 billion over the same time period.

This new analysis comes amid a flurry of legislative work around Obamacare, as well as corresponding CBO activity. In January, the agency evaluated a 2015 law that would repeal Obamacare with a delay of two years. Then there were three rounds of amendments to a House replacement plan that needed scoring. Then there was a score for the Senate’s version of that plan, the Better Care Reconciliation Act, plus an additional supplement for its long-term effects. And when senators balked at amendments to that plan, the CBO stepped into the breach with a re-score of repeal-and-delay.

Thursday’s report takes a look at the latest amendments to the BCRA—amendments that several Republican senators rejected recently. The CBO did not include an analysis of the controversial amendment offered by Texas Republican Ted Cruz, which would allow insurers that provide eligible coverage on the exchanges to also provide subsidized barebones plans off the exchanges. Minus that more radical change, the tweaks that the CBO evaluated don’t constitute major differences over the BCRA baseline.

Congressional Budget Office

The new BCRA gives $45 billion to states to fight opioids, adds an additional $70 billion to the original bill’s $112 billion fund to stabilize premiums, and allows people to use exchange tax credits on catastrophic coverage. It also cancels the original draft’s repeal of Obamacare’s tax on high-income investment earnings and its hospital insurance payroll tax.

With those changes, the CBO found relatively small shifts in the big-picture outcome of the BCRA. Both the one-year and the 10-year increases in the number of uninsured Americans are identical to the 15 million and 22 million under the original BCRA. That’s because both drafts create somewhat less generous tax credits for the exchanges than Obamacare did, roll back the Medicaid expansion over the next three years, and create per capita caps with declining long-term growth rates for Medicaid funding.

The CBO included a more detailed model of deductibles and cost-sharing under the draft than they have in previous scores, and it appears that more sophisticated analysis accounts for the identical coverage numbers, even in the face of a $70 billion addition for lowering premiums. The BCRA undermines the effect of additional premium-stabilizing funds because it also allows exchanges to sell plans with lower actuarial values than under the current law. That means that premiums would be on average lower with all other things held constant, but deductibles would also rise sharply. In some cases, low-income people and the elderly would face deductibles that exceed current yearly maximums for out-of-pocket spending and approach 3 percent of their total incomes—amounts that would surely induce fewer people to purchase coverage, even with more affordable premiums.

The key difference in the long-term effects between the two drafts is that the new BCRA wouldn’t repeal two major taxes on high-income people, a change that both improves its impact on the deficit and makes it less of a naked redistribution of wealth than previous iterations.

In all, the CBO finds this draft of the BCRA would not blunt its predecessor’s mass coverage losses, and would decrease premiums even as it increases deductibles. But those effects would likely be made moot by the Cruz amendment, since it would take the $70 billion in additional funding appropriated in this draft and use it to attempt to stabilize its own effects on exchanges. Those effects would be large and would likely splinter exchange risk pools between sicker and healthier people. That means exchange plans would cover fewer people, all while being more expensive for the remaining ones. It’s unclear if the Cruz amendment will be scored in the future, but it appears the provision is still among the policy options being considered by Republicans.

Congressional Budget Office

Of course, this bill might already be too dead for a score to matter. Moderate Republican Senators Jerry Moran of Kansas and Susan Collins of Maine already refused to support the new BCRA because of its Medicaid cuts and coverage decreases, and by the CBO score, nothing’s changed on that front.

Senator Rand Paul of Kentucky has been disenchanted with the idea of any law that replaces Obamacare instead of outright repealing it, and Senator Mike Lee of Utah has balked at Majority Leader Mitch McConnell’s softening of the Cruz amendment—two problems that this draft and score don’t fix. The main source of hope for attracting moderates is the extra $100 billion of deficit space carved out in the new draft, which McConnell could use to entice them with more premium and cost-sharing assistance.

Although it might not make a difference in an already splintering Senate Republican caucus, the CBO score and its predecessors highlight the limits to how far McConnell can contort policy to appease the wings of his party. It’s almost impossible under the policymaking strategies Republicans have employed to reduce spending, reduce premiums, and avoid large-scale coverage losses and market disruptions. That’s the reality facing Republicans now, and the hard choice facing party leadership desperate to repeal Obamacare soon.