Close Close

Life Health > Health Insurance

CBO: Spending law made PPACA slasher bill more powerful

Your article was successfully shared with the contacts you provided.

A Republican effort to kill parts of the Patient Protection and Affordable Care Act (PPACA) now looks as if it has even more power than it had a month ago to cut the federal budget deficit.

Analysts at the Congressional Budget Office (CBO) say H.R. 3672, the Restoring Americans’ Healthcare Freedom Reconciliation Act bill, could cut the deficit by a total of $516 billion, or about $52 billion per year, from 2016 through 2025.

That’s up 8.9 percent from a $474 billion deficit impact estimate the CBO analysts published in mid-December.

The Senate has already approved the current version of H.R. 3672. House leaders expect the House to vote on the measure tomorrow.

See also: House to vote on killing major PPACA provisions

The White House says President Obama will veto the bill if it comes to his desk. Bill supporters would need to win two-thirds majority votes in both the House and the Senate to overturn a veto.

The current version of H.R. 3762 would eliminate the PPACA individual mandate penalty; the PPACA employer mandate penalty; PPACA Medicaid expansion program funding; any PPACA health insurance exchange coverage subsidies to be provided in 2018 or later and the PPACA Cadillac plan tax.

The bill also would eliminate an increased federal matching rate for personal care attendant services that’s on track to be provided starting in 2018.

The bill would leave the current ban on major medical underwriters’ use of personal health status information other than age, location and tobacco use in place.

CBO analysts predicted in October that an earlier version of H.R. 3762, which focused on eliminating the individual and employer mandates, would eventually increase the number of U.S. residents without any public or private health insurance to about 43 million, from about 26 million if the PPACA provisions that would be repealed remained in place.

See also: CBO: PPACA bill may lead to 55% rise in uninsured count

In December, the analysts estimated an expanded version of the bill would do more to reduce the federal government’s budget deficit but increase the number of uninsured people by 22 million, rather than just 17 million.

This month, the analysts are updating their December H.R. 3762 effects estimate to reflect the impact of the Consolidated Appropriations Act of 2016 (CAA). CAA is the new law that postponed the effective date of the Cadillac plan tax and the PPACA medical device tax for two years and suspended the need for health insurers to pay $13.9 billion in PPACA health insurer taxes for 2017.

CAA would increase the effects of H.R. 3762 on the federal deficit by a total of $42 billion if the effects of the law on the economy as a whole are taken into account, the analysts say.

Some of the people who lost individual health coverage because H.R. 3762 became law would go to work to get group coverage, and that would increase the supply of labor and federal tax revenue, CBO analysts said in the analysis they published in December.

The analysts said in the December report that their forecasts include the impact of some increased federal spending on support for hospitals that treat the uninsured.

Repealing the PPACA subsidies and penalties meant to encourage the purchase of individual health insurance while leaving the PPACA restrictions on medical underwriting in place could destabilize the individual health insurance market in some states, the analysts said.

In Kentucky, for example, insurers blamed a combination of underwriting limits and lack of pressure for consumers to buy insurance for decisions to pull out of the state’s individual market in the mid-1990s.

The H.R. 3762 impact forecasts include the estimated effects of repealing PPACA coverage purchase incentives and penalties on use of individual health insurance, but the forecasts do not reflect the loss of individual coverage that might occur if H.R. 3762 destabilized some states’ individual health insurance markets, the analysts said.

See also:

CBO cuts PPACA exchange subsidy spending estimate

Ky. Health Ins. Market Faces More Disruption

CBO: Repealing PPACA would cost $353 billion over next decade