Monday, June 26, 2017

CBO score on Senate GOP health care. No surprise- this bill is awful

This afternoon, the Congressional Budget Office dropped its analysis of the Senate GOP's health care bill. Obviously the big headline from the CBO analysis is the estimate that 22 million more Americans will become uninsured by 2026 than under Obamacare, making for a total uninsured population of 49 million. This includes 15 million who will become uninsured next year. and it shows almost no improvement from the 23 million in new uninsured that was in the bill that passed the House of Representatives.

So why would people become uninsured? The CBO says the largest increase will come from people being booted off of Medicaid, as the Senate bill reduces reimbursements to states.
Medicaid. Enrollment in Medicaid would be lower throughout the coming decade, with 15 million fewer Medicaid enrollees by 2026 than projected under current law in CBO’s March 2016 baseline (see Figure 4). Some of that decline would be among people who are currently eligible for Medicaid benefits, and some would be among people who CBO projects would, under current law, become eligible in the future as additional states adopted the ACA’s option to expand eligibility.
In fact, the CBO says that Medicaid's cut will get worse as the years go on, and the damage will continue well past 2026. And states would be the ones that would have to carry out the cuts as they can't afford to make up the difference.
Over the next decade, CBO projects, a large gap would grow between Medicaid spending under current law and under this bill (see Figure 2 on page 13). In later years, that gap would continue to widen because of the compounding effect of the differences in spending growth rates: CBO projects that the growth rate of Medicaid under current law would exceed the growth rate of the per capita caps for all groups covered by the caps starting in 2025.

Under this legislation, after the next decade, states would continue to need to arrive at more efficient methods for delivering services (to the extent feasible) and to decide whether to commit more of their own resources, cut payments to health care providers and health plans, eliminate optional services, restrict eligibility for enrollment, or adopt some combination of those approaches. Over the long term, there would be increasing pressure on more states to use all of those tools to a greater extent. CBO and JCT do not have an insurance coverage baseline beyond the coming decade and therefore are not able to quantify the effect on insurance coverage in the long term. However, the agencies expect that after 2026, enrollment in Medicaid would continue to fall relative to what would happen under current law.
Another large source for the 22 million increase in uninsured is due to people not choosing Obamacare exchange policies because they either won't be able to afford them after the Senate bill takes away assistance to help them pay, or they'll choose not to be insured because they no longer face a penalty for going without insurance.
Nongroup coverage. On net, CBO and JCT estimate that roughly 7 million fewer people would obtain coverage in 2018 through the nongroup market under this legislation than under current law; that figure would be about 9 million in 2020 and about 7 million in 2026 (see Table 4, at the end of this document). Fewer people would enroll in the nongroup market mainly because the penalty for not having insurance would be eliminated and, starting in 2020, because the average subsidy for coverage in that market would be substantially lower for most people currently eligible for subsidies—and for some people that subsidy would be eliminated.
Of course, we'll all pay a price when those people face medical hardship and go to the emergency room to get treated, but hey, it's FREEEEE-DUMMM!

And which group of people that is likely to get screwed the most under this bill? Low-income working Boomers - the white portion of whom is a big part of Donald Trump's base!
CBO and JCT expect that this legislation would increase the number of uninsured people substantially. The increase would be disproportionately larger among older people with lower income—particularly people between 50 and 64 years old with income of less than 200 percent of the federal poverty level (see Figure 3). This section provides additional information about two major sources of coverage as well as about stability of the health insurance market.
The CBO says the part of the 50-64 population that will become uninsured will more than double under this bill, from just over 10% to nearly 25%.

On the budgetary side, the CBO does say that the Senate health care bill will reduce the deficit from current law between now and 2026, and the Medicaid cuts and the lower subsidies to help buy insurance are the reason why.

You'll also notice the $541 billion in tax cuts to rich people and corporations are being "paid for" through the measures that cause more people to become uninsured. That's a classy touch, isn't it?

Lastly, if Republicans try to claim this bill ends up lowering overall premiums, they are LYING BY OMISSION. They don't mention that cost-sharing subisidies go down, and that the CBO notes a lower overall average premium is a result of many people choosing lower-quality plans...or no plan at all.
Although the average benchmark premium directly affects the amount of premium tax credits and is a key element in CBO’s analysis of the budgetary effects of the bill, it does not represent the effect of this legislation on the average premiums for all plans purchased. The differences in the actuarial value of plans purchased under this legislation and under current law would be greater starting in 2020—when, for example, under this bill, some people would pay more than the benchmark premium to purchase a silver plan, whereas, under current law, others would pay less than the benchmark premium to purchase a bronze plan.

Under this legislation, starting in 2020, the premium for a silver plan would typically be a relatively high percentage of income for low-income people. The deductible for a plan with an actuarial value of 58 percent would be a significantly higher percentage of income—also making such a plan unattractive, but for a different reason. As a result, despite being eligible for premium tax credits, few low-income people would purchase any plan, CBO and JCT estimate.
Not that this is a surprise, but this is an awful bill, and it needs to be sent to the dustbin.

As mentioned earlier, feel free to click on the CBO analysis and slice and dice it as you want.

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