CBO: ACA replacement changes save less money, don’t improve coverage

An updated assessment on the American Health Care Act (AHCA) from the Congressional Budget Office (CBO) said amendments to the Republican-sponsored Affordable Care Act replacement plan wouldn’t improve its losses in insurance coverage and would decrease the amount of savings to the federal budget.

The original CBO report said the proposal would succeed in lowering insurance premiums (after an initial 15 to 20 percent increase) and cutting the federal deficit by $337 billion, while simultaneously leading to 24 million more uninsured Americans by 2026. Taking into account changes made to the bill on March 20, like offering $85 billion in additional tax credits to customers aged 50 to 64, the CBO said the deficit savings would be cut in half without any positive effect on insurance coverage.

“Estimates differ by no more than half a million people in any category in any year over the next decade. (Some differences may appear larger because of rounding.) For example, the decline in Medicaid coverage after 2020 would be smaller than in the previous estimate, mainly because of states’ responses to the faster growth in the per capita allotments for aged, blind and disabled enrollees—but other changes in Medicaid would offset some of those effects,” the report said.

The amendments didn’t change its assessment on premiums, the CBO said. The reduction in federal savings is largely attributed to how the amendments reduce revenues by cutting ACA taxes a year earlier, reducing the threshold for determining medical care deductions on individual income tax returns and revising the formula for calculating the per capita funding caps in Medicaid.

What wasn’t assessed by the CBO report was the effect of eliminating the ACA’s “essential health benefits” required to be covered by insurers. Eliminating those provisions was only floated as an option by the White House and the conservative House Freedom Caucus after the amendments had been approved. Also not assessed by the CBO were other Freedom Caucus demands, like allowing insurance plans to once again place lifetime or annual limits on benefits.

The CBO report came just hours after a scheduled March 23 vote on the AHCA was delayed by House Republican leaders as they struggled to gain support from their own caucus to pass the legislation.