CBO Analyzes GOP Health Proposal

If the amendment were implemented as written, it would increase spending by a total of $61 billion from 2010 to 2019, raise $52 billion in new revenue related to coverage provisions, reduce direct government spending by $49 billion, and increase tax revenue by $27 billion, CBO analysts estimate.

By 2019, “the number of nonelderly people without health insurance would be reduced by about 3 million relative to current law; leaving about 52 million nonelderly residents uninsured, ” CBO Director Douglas Elmendorf writes in a letter summarizing the CBO’s findings. “The share of legal nonelderly residents with insurance coverage in 2019 would be about 83%, roughly in line with the current share.”

The CBO compared what private health coverage costs might be in 2016 in a current-law system and in a Republican amendment system. Elmendorf reports that costs might be 7% to 10% lower for small groups; 5% to 8% lower for individuals; and about 0% to 3% lower for large groups.

But some amendment provisions “would tend to increase the premiums paid by less healthy enrollees or would tend to increase the premiums paid by enrollees in some states relative to enrollees in other states,” Elmendorf writes. “As a result, some individuals and families within each market would see reductions in premiums that would be larger or smaller than the estimated average reductions, and some people would see increases.”

CBO believes the medical malpractice changes “would reduce health care costs directly — by reducing premiums for medical liability insurance and associated costs — and indirectly by slightly reducing the utilization of health care services,” Elmendorf writes. Together, he writes, those effects could reduce $41 billion in spending over 10 years and generate about $13 billion in new tax revenue.