Goldman Warns CBO Report Will Substantially Delay Obamacare Repeal

Tyler Durden's picture

After CBO's much-anticipated estimate of the GOP's Obamacare replacement proposal showed that the legislation could result in as many as 24 million Americans losing coverage by 2026, we wondered just how much of an additional bottleneck this report would present to the already conflicted passage of the controversial "Trumpcare." We got the answer overnight, when Goldman's government economists Alec Phillips said that the CBO scoring would likely slow the passage of the Obamacare repeal process. Specifically, he said that "CBO’s estimates of the Obamacare replacement legislation's effects on coverage were somewhat worse than expectations and suggest changes are likely to be necessary before the bill can pass the Senate. We continue to expect enactment of ACA replacement this year but probably not by the early April deadline that Republican leaders have highlighted." And since the Obamacare process timeline is closely tied to Trump's tax reform, a delay in the former, will mean yet another delay in the latter, leading to further market disappointments, which however so far have yet to materialize as the "market" seems oblivious of the practical realities of Trump's economic policies.

Here are the main points from Goldman:

CBO Estimates Could Slow Passage of Obamacare Replacement Bill

 

BOTTOM LINE: CBO’s estimates of the Obamacare replacement legislation's effects on coverage were somewhat worse than expectations and suggest changes are likely to be necessary before the bill can pass the Senate. We continue to expect enactment of ACA replacement this year but probably not by the early April deadline that Republican leaders have highlighted.

 

MAIN POINTS:

 

  1. The Congressional Budget Office (CBO) released its estimate of the effect of the American Health Care Act (AHCA). It estimates that the bill, which replaces the Affordable Care Act (ACA, or Obamacare) would reduce the federal deficit by $337bn over the next ten years and would reduce coverage by 24 million by 2026.
  2. The estimates of coverage loss are at the more negative end of expectations. CBO had previously estimated that repeal of the individual mandate would reduce coverage by 15 million by 2026; combined with other changes in the bill, CBO’s new estimate is that 24 million fewer individuals would have insurance coverage than under current law by 2026, or nearly all of the coverage expansion CBO attributed to the ACA. This reduction would occur over several years; in 2018, the coverage decline is estimated at 14 million, due mainly to the proposed elimination of the individual insurance mandate; the subsequent decline would be due mainly to the phase-out of the ACA’s Medicaid expansion.
  3. The fiscal estimates contained few major surprises. The bill as a whole is estimated to reduce the budget deficit by $337bn over ten years (through 2026). Phasing out the Medicaid expansion would reduce spending by $880bn over ten years. Another $673bn in savings is attributed to the elimination of the subsidies in the individual insurance market, but this would be nearly offset by new tax credits, grants to states, and the revenue loss associated with repeal of the individual and employer mandates. The repeal and/or delay of the taxes established by the ACA would increase the deficit by $592bn/10yrs, resulting in net budgetary savings of $337bn.
  4. Individual market premiums are projected to rise and then fall. In the short-run (prior to 2020), the estimate suggests that premiums are expected to rise by 10-15% more than without the legislation. This is a notable finding, since Republican leaders had already raised concerns about high premiums under the program. However, in the longer run (in 2020 and beyond) CBO estimates the bill would lower the average premium by 10% relative to current law, as higher premiums and reduced enrollment for older people would be offset by lower premiums and greater enrollment among younger people. Funding for states to limit the costs to insurers of high-cost patients and the loosening of benefit rules also contribute to the lower estimated premiums.
  5. The details of the CBO report make passage somewhat more difficult, in our view. While few aspects of the CBO estimate are surprising many Republican lawmakers who were already willing to support the bill are likely to continue to support it, the new estimate could lead some uncommitted Republicans to oppose the bill unless additional changes are made. Additional changes to the bill are likely, in our view, before it reaches the House floor the week of March 20. The greater obstacle remains the Senate, where the bill is unlikely to come up for a vote until the week of March 27, at earliest. While it is possible that ACA replacement legislation could reach the President’s desk in April, as Republican leaders have predicted, a delay until May or later continues to look more likely, particularly in light of today’s CBO estimate.

Meanwhile, as the Hill reports this morning, leading House Republicans are "fighting to defend their ObamaCare replacement bill in the face of a Congressional Budget Office (CBO) report that found the measure would result in millions of people becoming uninsured." As expected, Democrats are on the attack, hoping the findings — and the eye-popping estimate that 24 million additional people will be without coverage by 2026 — will stop ObamaCare repeal in its tracks.

“Numbers are quite eloquent things; they speak very clearly,” said House Democratic Leader Nancy Pelosi (D-Calif.) Monday evening after the CBO’s report was released.  “I would hope that they would pull the bill,” she added. “It’s really the only decent thing they could do.”

 

Republicans had long expected that the CBO score would produce uncomfortable headlines that could sap support. The task ahead, for Speaker Paul Ryan (R-Wis.) and his lieutenants, is to weather the storm.  Ryan went on Fox News soon after the report was released and said he was “encouraged” by the findings. He pointed to items like the deficit reduction and decrease in premiums that the report found, while seeking to downplay the coverage losses.

 

Much of the change in the uninsured rate, Ryan said, would simply be due to people choosing not to buy coverage once the mandate for having coverage is repealed. "What I’m encouraged [by] is, once our reforms kick in, what the CBO is telling us is, it’s going to lower premiums — it will lower premiums 10 percent. It stabilizes the market. It’s a $1.2 trillion spending cut, an $883 billion tax cut, and $337 billion in deficit reduction,” Ryan said. “So of course the CBO is going to say if you’re not going to force people to buy something they don’t want to buy, they won’t buy it.“

Confirming the Goldman take, many Senate Republicans were already voicing skepticism of the House bill before the CBO score was released. They are urging their colleagues to slow down on the legislation. Sen. Bill Cassidy (R-La.) called the score “awful.” 

Sen. Susan Collins (R-Maine) said it  “should prompt the House to slow down and reconsider certain provisions of the bill.” Added Sen. Lindsey Graham (R-S.C.): "If half of the CBO is true I think we should slow down.”

Trump himself has expressed doubts about the political wisdom of pressing ahead, repeating his frequent musing again Monday that it would be easier to just let ObamaCare fall under its own weight.  “The best thing you could do politically is wait a year, cause it’s going to blow itself off the map,” Trump said. “But that’s the wrong thing to do for our country. It’s the wrong thing to do for our citizens.”

But House Republican leaders are pressing ahead. The House Budget Committee is set to hold a final markup of the legislation on Thursday, setting the stage for a floor vote next week that could turn into a cliffhanger. “This week, a third House committee will debate the American Health Care Act as part of an open, transparent process,” Ryan said in a statement.

“We have set out a clear goal — to give every American access to quality, affordable care — and a clear plan to achieve it. Now we must keep our promise and deliver.”

The only question is when, and after how many changes.

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buzzsaw99's picture

the CBO is a BAD JOKE. not because of this, but, because, well, they are.

Chris Dakota's picture
Chris Dakota (not verified) buzzsaw99 Mar 14, 2017 7:42 AM

Slow down and get it right.

Genetic testing is in that bill the allows employers to demand genetic testing of freaking employees or be fired.

Get rid of the fine for not buying it.

single payer would be better than this shit.

Beam Me Up Scotty's picture

"Obamacare replacement proposal showed that the legislation could result in as many as 24 million Americans losing coverage by 2026"

There is a difference between LOSING coverage, and CHOOSING not to carry coverage.  A healthy young person might have plenty of income to afford health insurance, they might CHOOSE to forgo it because they are healty---why waste the money??  That is NOT the same as LOSING your coverage.  How many of those 24 million fall into this category??  They say it as if to tug at everyone's heart strings----oh the poor uninsured, how will they ever get healthcare???

You could inherit millions, and have no income---poor you!!  You would LOSE your coverage.   Already a downvote---by an emotional snowflake.  USE SOME LOGIC!

ne-tiger's picture

It only works until it's not. What happened if a young person got into accident? It's a shame this country of self claiming example of the world and spending trillions on wars forcing other countries to conform cannot fucking make its healthcare system right.

froze25's picture

You know what really grinds my gears? The fact that the world kept turning and society functioned before the ACA, so what the hell is wrong with a straight up repeal of it and a return to how it was before it?

ne-tiger's picture

Have you lived before ACA? Premium has been rising in double digits long before. This was the reason Hillary clinton was trying to do something at beginning of Bill's term, except she fucked up. Our unique system dominated by for profit insurance/drug companies is the problem.

Yes We Can. But Lets Not.'s picture

Do you want gubmint in your healthcare?

>>> Yes

>>> No

Beam Me Up Scotty's picture

"Have you lived before ACA? Premium has been rising in double digits long before."

Now they are boderline TRIPLE digit increases.  The rate of increase has been FAR HIGHER since Obamacare was passed, than it was prior.  I personally know people who's rates increased north of 80% this year.  That never happened pre-Obamacare.

odatruf's picture

I wish ZH would stop parroting the X number of million will "lose" coverage bullshit. The right way to describe is that X would no longer be covered.

The difference being that people like me will again choose to not be covered. I'm not losing anything, rather I'm regaining the freedom I once had. Fuckwits.

I'm sure some will lose coverage by their current plans, but how many was that also true for with the ACA? Fuckwits.

And stop the bullshit about the plans being more expensive. They won't be. It's that now your friends and neighbors will pay less of your bill for you. Fuckwits.

MalteseFalcon's picture

Have the government pay for catastrophic coverage for specified dread diseases for everyone.

The point of the coverage would be to keep a medical event from bankrupting.

The trigger should be fortuitous occurrences and not life-style based, so the coverage cannot be "gamed".

End of life care should be clearly defined and reasonably limited, so no "death panels".

Everyone is covered, the cost would be far lower than universal single payer.

Then whoever wants to buy private coverage for other circumstances or to use an HSA would be free to do so.

8774_44887's picture
8774_44887 (not verified) MalteseFalcon Mar 14, 2017 11:00 AM

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... http://bit.ly/2jdTzrM

Chris Dakota's picture
Chris Dakota (not verified) froze25 Mar 14, 2017 8:05 AM

Once you give something almost for free it becomes an entitlement, then if you take it away millions fill the streets to protest.

The thing that is wrong with this system is it jacks the cost up for those making ordinary income 65K per year for two people.

For me the insurance company wants $2K per month for two, that is $30K per year pre tax, so more than half your income for health insurance.

I say cut these fuckers out and go single payer for all but Illegals.

It brings the cost down especially for drugs, the government tells the drug companies how much they are going to pay, not the other way around.

Healthcare is a right for a rich nation!

If you are sitting around not working and getting Obamacare for $50 per month you should be made to work in a clinic doing what ever you are qualified for.

ne-tiger's picture

 Europe countries spend half of the money and have longer life expertance

Beam Me Up Scotty's picture

"Healthcare is a right for a rich nation!

If you are sitting around not working and getting Obamacare for $50 per month you should be made to work in a clinic doing what ever you are qualified for."

Thats the whole problem right there.  There are a whole bunch of people not contributing one iota to "society", but are using resources like crazy.   Do you realize the price of EVERYTHING is higher because of Obamacare?  Not just healthcare??  Food in grocery stores, in restaurants, the clothes you buy---EVERY SINGLE THING, is higher because of Obamacare.   There is NO INCENTIVE to be healthy and save money.  You are darn right, though, if you are an able bodied person, you shouldn't get one thin dime for nothing---even if it means cleaning garbage out of ditches.  Laying on the couch eating all day and collecting a check isn't going to work anymore.

Oh Please.  3 downvotes, and not one rebuttal.  You snowflakes are amazing.

 

pazmaker's picture

Beam me up, I've been on ZH for over 6 years now and boy has the crowd changed....either that or we have a bunch of trolls on here now.  It appears all the independent thinkers have left the building...beam me up Scotty!!!

ne-tiger's picture

I followed the dude since his seekingalpha days.

Gohigher's picture

BMUS
"Laying on the couch eating all day and collecting a check isn't going to work anymore."

Laying on the couch eating all day and collecting a check isn't work anymore. There FIFY .....

I am not in favor of cutting off whole sections of the demographic. I am in favor of them receiving those welfare checks at the end of the work week when the able are rebuilding infrastructure projects and the like.

Workfare, bitch. WPA was not all that bad back in the day...

Chris Dakota's picture
Chris Dakota (not verified) Chris Dakota Mar 14, 2017 8:25 AM

Cut the military budget, it is known that 50% is waste and fraud now...like kickbacks...

Contractor prices in kickback to Senator McCain, its how you get the $700 toilet seat.

Drain the swamp, use the money for healthcare for all, run it like a business.

Don't increase the military budget by $54 billion, cut it in half!

tip e. canoe's picture

the thing that is wrong with the system is that medical monopolies and big pharma are running a giant extortion racket with opaque predatory pricing and the insurance companies have absolutely no incentive to bring costs down because they make $ on the vig.

moral hazard is a bitch.

tip e. canoe's picture

there's those Russell Conjugations again.   funny how a few choice words can radically change a qualitative analysis of quantitative information.

FrozenGoodz's picture

How many senators saying it's dead on arrival did GS need to conclude this?

 

Not to worry ... we're slowly getting used to disappointment and low expectations

CJgipper's picture

Just.

Repeal.

It.

Already.

 

 

Trump should be holding rallies in all of the RINO home districts to put them on notice that he's willing to campaign against them (like they did him) if they don't get on board with what we elected them to do.

ne-tiger's picture

Single payer system using medicare is the good solution. 

Beam Me Up Scotty's picture

Sure, until government is taking away everything from everyone for healthcare until finally no one is working and nothing is produced.  How are you going to eat then idiot??  Socialism fails when it runs out of OTHER PEOPLE'S money. 

ne-tiger's picture

If government needs to do something, healthcare/education is the one instead of fucking bogus wars wasting trillions. All other developed countries are doing better on this.

Beam Me Up Scotty's picture

Oh I agree with that.  All those "developed" countries, aren't spending money on their militarys, we are for them.  I'm all for pulling our military from around the world and making those countries spend their own money on their own defense.  Wonder how good their healthcare will be then??

doctor10's picture

Big whoop. Re-branding a pig into boar doesn't make it any less porcine

americanreality's picture

Why would Republicans want to repeal the ACA when it is a Republican plan to begin with?  

Romney care, Heritage foundation.  It's the right wing solution, designed to head off single payer.  

It won't be repealed.  You're being played for fools.  Naturally. 

Arnold's picture

You mistake Romney from Massachusetts as something he never was.
RINO is the correct term.

VinceFostersGhost's picture

 

 

End the Ryan mandates.....this is what tyranny looks like!

Arnold's picture

It might provide enough cover for those Half assed Iggie congress critter assholes to do a good job with reform.

Before the pizza is delivered.

BandGap's picture

The CBO is a tool and it did as it was told to do.

Just lay out a date, six months in the future, where SoetoroCare is repealed. Just pass a law where insurance is portable across state lines. Then let the people and the insurance companies work it out. Or not.

Get the fucking government out of my life.

highwaytoserfdom's picture

 

Boehner Ryan.   Soros and Romney HCA criminalize him

wmbz's picture

CBO. What a pant load of crap. It didn't stop/slow down Obozocare in the first place. So now it's important?

Bullshit!

Arnold's picture

So many Grubers.
So few rounds.

ToSoft4Truth's picture

Paper tigers don't bite. 

VinceFostersGhost's picture

 

 

It didn't stop/slow down Obozocare in the first place. So now it's important?

 

Hell of a point there...

bamboojay's picture

But CBO had no concern when the this worthless pos of Obamacare was first created.  

ToSoft4Truth's picture

Trump will repeal, really. 

VinceFostersGhost's picture

 

 

A pox on his house if he doesn't.....be a damn shame.......those are some good looking people.

Robert Trip's picture

Neither the Democrats or most Republicans wanted Trump to win the Presidency.

Even the Democrats would have preferred Bush.

Now, the end game all along becomes crystal clear.

Stop Trump in his tracks from getting anything passed in a Congress with a 9% approval rating still staffed with the same dickheads that gave Obama everything he wanted.

We're about to get fucked big time but not by the President but by the traitorous bastards in our own Party such as Ryan and McCain.

refill6times's picture

...traitorous bastards in our own Party such as Ryan and McCain.

You read Zerohedge and still think there is a difference between Democrat and Republican?

 

There is another topic on the front page that has posters like you gushing over that Tulsi Gabbard, thinking she is "a good Democrat, she's on our side".

 

Fuck. You. All.

Wigglesworth's picture

Obamacare repeal?  I haven't seen it.

VinceFostersGhost's picture

 

 

You probably can't see it.......but I'm tapping my foot furiously.

 

Tick tock.......let's freakin go here boyz!

OrangeyTheAssHat's picture
OrangeyTheAssHat (not verified) Mar 14, 2017 7:50 AM

Hey wasn't Hillary going to Jail? WTF happened???

DingleBarryObummer's picture

Nope.  Jeff Sessions is going to put harmless pot smokers in private prisons for smoking a doobie instead.

pc_babe's picture

How many of these uncovered lives are the result of ending the Individual mandate?
.
.
.
... the obama/democrat mandate that says your government orders you to buy insurance from us [the government] and if you don't, you will pay a fine and are subject potentially to jail.
.
.
.
the wettest of LIBTARD wet dreams.

Everybodys All American's picture

Just let the Brown Clown's signature bill implode. Bring to light the fact that this obama administration and specifically obama used Freddie and Fannie Mae to criminally fund Obamacare otherwise it would be dead already.

Arnold's picture

I heard that Obama's first Executive Order was to seal all historical and academic history that he had.
It's in the Bull Pen, warming up.

http://www.politico.com/story/2008/02/michelle-obama-thesis-was-on-racia...

http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&u...