The CBO has scored the Senate version of the healthcare bill, which was passed by the House as H.R.1628, and found a few more modest improvements relative to its scoring of the Healthcare Bill as of May 24 . Here are the apples to apples comparisons with the last proposed version of the bill:
- Under the Senate Bill, the US budget deficit would be reduced by $321 billion between 2017 and 2026, which is $202 billion better than the House version, which would have cut the cumulative deficit by $119 billion. This
- The CBO also found that the number of Americans expected to lose their health coverage would rise to 22 million in 2026, which is 1 million fewer than the 23 million forecast in the May scoring of the House bill. It is also a little over 100% more than are currently enrolled in Obamacare.
- The CBO concludes that in 2026, an estimated 49 million people under age 65 would be uninsured, compared with 28 million who would lack insurance that year under current law. Under the last CBO estimate, the number of Americans wihtout insurance in 2026 was 51 million of Americans under 65, so an improvement of 2 million.
- Under the Senate bill, average premiums for benchmark plans for single individuals would be about 20% higher in 2018 than under current law, mainly because the penalty for not having insurance would be eliminated, Those premiums would be about 10 percent higher than under current law in 2019.
- However, in 2020, average premiums for benchmark plans for single individuals would be about 30 percent lower than under current law.
Below is the "bridge" of the budget deficit reduction from the CBO. Of note: virtually all of the $541 billion in cumulative increase in deficits due to "non-coverage provisions" shown below, is the result of "repeal or delay of taxes on high-income people."
Some quickly highlighted the only two categories that matter:
And comparing budget outlays in the Senate bill and current legislation:
The White House took aim at the CBO's forecasting skills, although it appears to have launched another round of mockery regarding what base the White House's 100% comparison was referring to.
The key highlights from the official score:
- CBO and JCT estimate that, over the 2017-2026 period, enacting this legislation would reduce direct spending by $1,022 billion and reduce revenues by $701 billion, for a net reduction of $321 billion in the deficit over that period (see Table 1, at the end of this document):
- The largest savings would come from reductions in outlays for Medicaid— spending on the program would decline in 2026 by 26 percent in comparison with what CBO projects under current law—and from changes to the Affordable Care Act’s (ACA’s) subsidies for nongroup health insurance (see Figure 1). Those savings would be partially offset by the effects of other changes to the ACA’s provisions dealing with insurance coverage: additional spending designed to reduce premiums and a reduction in revenues from repealing penalties on employers who do not offer insurance and on people who do not purchase insurance.
- The largest increases in deficits would come from repealing or modifying tax provisions in the ACA that are not directly related to health insurance coverage, including repealing a surtax on net investment income and repealing annual fees imposed on health insurers.
Some other observations from the CBO, first a chronology of major proposed changes:
- In 2018, the legislation would provide funding to health insurers to stabilize premiums and promote participation in the marketplaces.
- In 2019, four major coverage provisions would take effect:
- Appropriating funding for grants to states through the Long-Term State Stability and Innovation Program.Requiring insurers to impose a six-month waiting period before coverage starts for people who enroll in insurance in the nongroup market if they have been uninsured for more than 63 days within the past year.
- Setting a limit whereby insurers would charge older people premiums that are up to five times higher than those charged younger people in the nongroup and small-group markets, unless a state sets a different limit.
- Removing the federal cap on the share of premiums that may go to insurers’ administrative costs and profits (also known as the minimum medical loss ratio requirement) and effectively allowing each state to set its own cap.
- In 2020, the following additional major coverage provisions would take effect:
- Changing the tax credit for health insurance coverage purchased through the nongroup market and repealing current-law subsidies to reduce cost-sharing payments. People with income below 100 percent of the federal poverty level (FPL) who are not eligible for Medicaid would become eligible for the tax credit, and people with income between 350 percent and 400 percent of the FPL would no longer be eligible. The maximum percentage of income specified by the bill that people would pay at different ages toward the purchase of a benchmark plan would be lower for some younger people and higher for some older people. The benchmark plan used to determine the amount of the tax credit would have a lower actuarial value.
- Capping the growth in per-enrollee payments for nondisabled children and nondisabled adults enrolled in Medicaid at no more than the medical care component of the consumer price index (CPI-M) and for most enrollees who are disabled adults or age 65 or older at no more than the CPI-M plus 1 percentage point, starting in 2020 and going through 2024. Starting in 2025, the rate of growth in per-enrollee payments for all groups would be pegged to the consumer price index for all urban consumers (CPI-U).
- Starting in 2021, the bill would reduce the federal matching rate for funding for adults made eligible for Medicaid by the ACA; that rate would decline 5 percentage points per year through 2023 and then fall to equal the rate for other enrollees in a state in later years.
And most importanly, Effects on Premiums and Out-of-Pocket Payments
- The legislation would increase average premiums in the nongroup market prior to 2020 and lower average premiums thereafter, relative to projections under current law, CBO and JCT estimate. To arrive at those estimates, the agencies examined how the legislation would affect the premiums charged if people purchased a benchmark plan in the nongroup market. In 2018 and 2019, under current law and under the legislation, the benchmark plan has an actuarial value of 70 percent—that is, the insurance pays about 70 percent of the total cost of covered benefits, on average. In the marketplaces, such coverage is known as a silver plan.
- Under the Senate bill, average premiums for benchmark plans for single individuals would be about 20 percent higher in 2018 than under current law, mainly because the penalty for not having insurance would be eliminated, inducing fewer comparatively healthy people to sign up. Those premiums would be about 10 percent higher than under current law in 2019—less than in 2018 in part because funding provided by the bill to reduce premiums would affect pricing and because changes in the limits on how premiums can vary by age would result in a larger number of younger people paying lower premiums to purchase policies.
- In 2020, average premiums for benchmark plans for single individuals would be about 30 percent lower than under current law. A combination of factors would lead to that decrease—most important, the smaller share of benefits paid for by the benchmark plans and federal funds provided to directly reduce premiums.
- That share of services covered by insurance would be smaller because the benchmark plan under this legislation would have an actuarial value of 58 percent beginning in 2020. That value is slightly below the actuarial value of 60 percent for “bronze” plans currently offered in the marketplaces. Because of the ACA’s limits on out-of-pocket spending and prohibitions on annual and lifetime limits on payments for services within the EHBs, all plans must pay for most of the cost of high-cost services. To design a plan with an actuarial value of 60 percent or less and pay for those high-cost services, insurers must set high deductibles—that is, the amounts that people pay out of pocket for most types of health care services before insurance makes any contribution. Under current law for a single policyholder in 2017, the average deductible (for medical and drug expenses combined) is about $6,000 for a bronze plan and $3,600 for a silver plan. CBO and JCT expect that the benchmark plans under this legislation would have high deductibles similar to those for the bronze plans offered under current law. Premiums for a plan with an actuarial value of 58 percent are lower than they are for a plan with an actuarial value of 70 percent (the value for the reference plan under current law) largely because the insurance pays for a smaller average share of health care costs.
And looking all the way at the end of the 10 year horizon:
By 2026, average premiums for benchmark plans for single individuals in most of the country under this legislation would be about 20 percent lower than under current law, CBO and JCT estimate—a smaller decrease than in 2020 largely because federal funding to reduce premiums would have lessened. The estimates for both of those years encompass effects in different areas of the country that would be substantially higher and substantially lower than the average effect nationally, in part because of the effects of state waivers. Some small fraction of the population is not included in those estimates. CBO and JCT expect that those people would be in states using waivers in such a way that no benchmark plan would be defined. Hence, a comparison of benchmark premiums is not possible in such areas.
Full estimate is below (link)