We, and much of the Internet, reported the headlines from the Congressional Budget Office’s report on the House Republican health care bill Monday. The nonpartisan CBO forecast that the number of uninsured Americans would soar; premiums for those buying insurance on their own would first go up, then go down by even more; and the GOP measure would save the government $337 billion.
But the 37-page CBO analysis, and the agency’s 30-minute call with reporters immediately after its release, was full of other significant findings.
- Premiums: Forget the averages. It’s about age. Under the GOP plan, CBO predicts an average 64-year-old American would see premiums jump 20 to 25 percent in 10 years, while premiums would drop 8 percent for a 40-year-old, and slide even more (by 25 percent) for an average 21-year-old. Why is this? Two reasons:
- The Republican bill allows insurers to charge older Americans up to five times more than younger ones. The so-called “age band” is currently limited to charging older people three times more.
- With the Affordable Care Act’s minimum requirements rescinded under the GOP proposal, all Americans would have access to cheaper, more bare-bones plans than they do now. Those most likely to purchase such minimal, low-cost plans? The young and healthy.
- Fewer people would get insurance through work. Fewer employers would offer insurance. The ACA was designed to especially help those who do not get health care through work. But CBO concluded that once the employer and individual mandates for not carrying insurance are removed, some two million Americans will drop out of work-related coverage. And an unknown number of employers will stop providing the benefit.
- Historic Medicaid Cuts/Savings. Republicans call them savings; Democrats call them “cuts”. Either way, the CBO found that the Republican bill would create historic shifts in government spending. Medicaid would see a reduction in funding of $880 billion over 10 years. Republicans would partially replace that with a $100 billion fund to help states pay for health care. However you view it, this is a bold move to try to curb the deficit. But it could easily put more budget pressure on states.
- Subsidies are also down. Ending the ACA tax subsidies would save some $673 billion, according to CBO. Republicans replace subsidies with tax credits, which the CBO says will cost $361 billion. That is a net loss of $312 billion in government aid to individuals.
- Tax cuts. The GOP bill contains some significant tax and fee cuts. According to CBO, these are the three largest cuts:
- Repealing the 0.9 percent Medicare tax on higher income earners, which would be a $117 billion cut.
- Repealing a fee on health insurers, an estimated $145 billion cut.
- Repealing a 3.8 percent surcharge on higher incomes, equal to about $154 billion.