Congressional Budget Office Grades the American Health Care Act
The American Health Care Act was the first step in repealing and replacing the Affordable Care Act, commonly known as Obamacare. For nearly eight years, Republican candidates for Congress and the Presidency have promised to dismantle Obamacare, and with the election of Republican Donald Trump and Republican majorities in both the U.S. House of Representatives and Senate, the time appears ripe to make good on those promises.
In March of 2017, House Speaker Paul Ryan presented the American Health Care Act to the House of Representatives. Shortly thereafter, the nonpartisan Congressional Budget Office released its score of the plan; the report estimated that if enacted, AHCA would throw 24 million Americans off of health insurance over the first ten years. This version of the bill would eliminate the Individual Mandate (which penalized taxpayers who did nRemove featured imageot have health coverage), Employer Mandate, as well as stop funding the ACA’s Medicaid expansion. Although a vote was scheduled to take place, it never took place after House leadership realized that there were not enough votes to ensure passage of the bill.
Two months later, however, a revised version of the American Health Care Act did pass in the House. The new bill had two key provisions that secured the support of the conservatives that had previously refused to join the rest of their Republican members in the first round of voting. The new provisions allowed state governments to eliminate the Community Rating—which prohibits discrimination against people with pre-existing conditions—and would cut Medicaid funding by $800 billion.
At the time of the vote in the House of Representatives, the Congressional Budget Office had not yet released its score of the revised bill; the score was not released until several weeks after this vote. When the score was finally presented, it was disastrous. The Congressional Budget Office estimated that the new AHCA would leave 23 million more Americans uninsured by 2027, including 14 million in just the first year.
The CBO report based its findings on the likelihood that many states would opt out of the Community Rating, allowing insurers to charge people with pre-existing conditions more or deny them coverage entirely. According to the American Health Care Act, these states would set up an independent high-risk pool to insure these sick people, but for most, the premiums would still be too high to get coverage. This might increase premiums for some seniors with pre-existing conditions as much as 800 percent.
Under the American Health Care Act, premiums would also rise for many other groups. The CBO predicts that premiums would rise 20 percent in 2018, and 5 percent the following year. After that, premiums might rise or fall, depending on whether the state obtained a Community Rating waiver and how much it invested in its independent high-risk pool.
The new report did find that the AHCA would help save the federal government almost $119 billion over ten years. This was a slight reduction from the original bill that would have saved $150 billion over the same time period.
The Future of the American Health Care Act
Although the report by the Congressional Budget Office did not play a role in the House of Representatives, it may be quite influential in the following steps towards ratification. The U.S. Senate must now take up the bill or draft an entirely new one. Led by a thirteen Republican member working group, the Senate is currently in the midst of producing a new health care reform plan that is likely to be quite different from the American Health Care Act.
Many critics feel that the House bill’s passage was more of a political act than a serious effort to reform the currently troubled health care system. After the embarrassing debacle in March, President Trump and the Republican-controlled House of Representatives needed a political victory, which passage of the American Health Care Act provided.
However, the final vote of 217 in favor—just one more than was needed to pass—suggests that any major changes to the bill would send House members back to the drawing board. The President and the House Speaker spent a great deal of their political capital to get this win, and they may not have enough left for the reconciliation process when the Senate issues their version.
Long before the two chambers of Congress merge their two bills, the Senate must first pass a bill of their own, and that is looking increasingly unlikely. With only a 52 member majority in the Senate, Republicans can only afford two defections if Democrats remain unified in their opposition—an almost certainty given the broad support for Obamacare.
In the more independently minded Senate, more members are likely to look at the American Health Care Act as something to avoid rather than copy. Many Republican Senators hail from states that expanded Medicaid under the Affordable Care Act, and millions of their voters obtained health insurance under the expansion. Any effort to roll back these protections would likely leave many GOP Senators vulnerable in upcoming elections.
Furthermore, the new CBO report that estimates premiums would rise is also highly unpalatable among GOP members. Many of these Senators promised they would repeal Obamacare and replace it with something that would be cheaper. In fact, the primary justification for these initiatives has been to “fix” Obamacare which is experiencing skyrocketing costs. However, if Congress can’t develop a more cost effective solution, it might be better to leave the current system in place.
Ultimately, the end product of these efforts will have to appeal to lawmakers and voters across the political spectrum to win passage. Not only will it need to lower the federal deficit, but it will probably need to keep roughly the same number of people on health plans. The new health care system will need to be affordable and also enable people with pre-existing conditions to obtain coverage. It remains to be seen if President Trump and Congress can design such a system.
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