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CBO Scores Senate ACA Repeal

News  |  By John Commins  
   June 26, 2017

The Better Care Reconciliation Act would cut health insurance coverage for 22 million people by 2026, but that number could change with news that the Senate will now include a penalty for going uninsured in its repeal plan.

The nonpartisan Congressional Budget Office on Monday said that 22 million people would lose health insurance coverage under the Senate plan to repeal and replace the Affordable Care Act.

The Better Care Reconciliation Act of 2017 would also reduce direct spending by more than $1 trillion and reduce revenues by $701 billion over the next decade, with a net reduction to the federal deficit by $321 billion. The CBO said that is about $202 billion more than the estimated savings in the House American Health Care Act, the companion legislation that passed in early May on a strict party line vote.

The CBO noted that:

  • The largest savings would come from reductions in outlays for Medicaid—spending on the program would decline in 2026 by 26% in comparison with what CBO projects under current law—and from changes to the ACA’s subsidies for non-group health insurance.

    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.

The CBO scoring also notes that in 2018 15 million more people would be uninsured under the Senate plan mainly because the penalty for not having insurance would be eliminated. However, several media outlets are reporting that the Senate has added the penalty back into the BCRA, so that could affect the CBO scoring.

Later in the decade, CBO says, lower spending on Medicaid and substantially smaller average subsidies for coverage in the non-group market would also lead to increases in the number of people without health insurance.

By 2026, among people under age 65, enrollment in Medicaid would fall by about 16% and an estimated 49 million people would be uninsured, compared with 28 million who would lack insurance that year under current law.

The BCRA was unveiled last week, the culmination of weeks of secrets meetings by a handful of Republican Senators. There will be no open committee meetings on the legislation, and Senate Majority Leader Mitch McConnell, R-KY, is pushing for a floor vote in the Senate before the July 4 recess. No Democrats are expected to vote for the bill, which means that McConnell will need near-unanimous support from his Republican colleagues. So far, at least four Republicans have expressed opposition to the bill.

The CBO scoring comes as criticism of the Senate plan mounts.

American Medical Association CEO James L. Madara, MD, on Monday joined the long line of major health industry lobbyists to rail against the Better Care Reconciliation Act, bluntly telling Senate leaders: “Medicine has long operated under the precept of Primum non nocere, or ‘first, do no harm.’ The draft legislation violates that standard on many levels.”

Madara complained that the smaller subsidies for individual insurance coverage and waivers of required benefits, actuarial value standards, and out-of-pocking spending limits will expose low- and middle-income people to higher costs and unaffordable care.

“The AMA is particularly concerned with proposals to convert the Medicaid program into a system that limits the federal obligation to care for needy patients to a predetermined formula based on per-capita-caps,” Madara said.

“Per-capita-caps fail to take into account unanticipated costs of new medical innovations or the fiscal impact of public health epidemics, such as the crisis of opioid abuse currently ravaging our nation.”

The National Association of Medicaid Directors’s 56-member board of directors issued a unanimous “consensus statement” on Monday that vigorously opposed the proposed cuts to Medicaid, which add to about $800 billion over the next decade or so.

No amount of administrative or regulatory flexibility can compensate for the federal spending reductions that would occur as a result of this bill,” NAMD said. “Changes in the federal responsibility for financing the program must be accompanied by clearly articulated statutory changes to Medicaid to enable states to operate effectively under a cap.

The Senate bill does not accomplish that. It would be a transfer of risk, responsibility, and cost to the states of historic proportions.” 

“While NAMD does not have consensus on the mandatory conversion of Medicaid financing to a per capita cap or block grant, the per capita cap growth rates for Medicaid in the Senate bill are insufficient and unworkable,” the statement read.

The NAMD board rejected setting aside funds specifically for public health issues such as the opioid epidemic and noted that "earmarking funding for grants for the exclusive purpose of treating addiction, in the absence of preventative medical and behavioral health coverage, is likely to be ineffective in solving the problem and would divert critical resources away from what we know is working today.”

NAMD also called for prioritizing the stabilization of marketplace coverage before attempting to repeal the ACA. “Medicaid reform should be undertaken when it can be accomplished thoughtfully and deliberately,” NAMD said.

Richard Besser, MD, president and CEO of the Robert Wood Johnson Foundation, said that “every member of Congress must weigh the policy and moral implications of taking insurance from 22 million people. The impact extends well beyond the health and welfare of their own constituents. This bill would negatively affect the most vulnerable Americans regardless of where they live.”

“This bill puts the protections and peace of mind that come with comprehensive health insurance out of reach for millions of people—including children, the elderly, and those with disabilities,” Besser said. “It rolls back expansion of coverage under the Affordable Care Act, which helped millions of people become insured. It shifts responsibility to cash-strapped states for covering health care for the poor. It turns the financial support that made health insurance affordable for millions of people into tax cuts for the wealthiest among us.”  

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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