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CBO sees AHCA cutting $337 billion from the deficit

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The current version of the American Health Care Act could cut the federal budget deficit by $337 billion over the next decade but increase the number of uninsured people by 86 percent, to 52 million, according to the Congressional Budget Office.

Related: Nonpartisan scorekeeper in hot seat in GOP’s ACA de-funding fight

Most of the reductions in the federal budget deficit, and most of the drops in Medicaid enrollment, would occur after 2020.

          • About half of the increase in the number of uninsured people would be the result of reductions in federal support for Medicaid. The Medicaid changes could cut the number of people who have Medicaid coverage in 2026 by 19 percent, to 57 million.

          • Use of individual coverage in 2026 might be 8 percent lower than under current law, and use of group health coverage might be 5 percent lower. Insurers could be covering 23 million people through commercial individual and family policies in 2026, and about 150 million through commercial group health policies.

          • The number of uninsured people could rise to 52 million.

The CBO team also scored the effects of AHCA provisions on government tax revenue, and other forms of government revenue.

Under the AHCA, spending on health programs might fall $1.2 trillion. Government revenue could fall $894 billion.

An elimination of the Affordable Care Act net investment tax could be the biggest source of lost income for the government. That change could cost the government $158 billion in revenue over 10 years. Other big revenue losses could come from the repeal of the ACA health insurer tax, which could cost $145 billion, and the repeal of an ACA Medicare tax imposed on high earners. The Medicaid change could cut revenue by $117 billion.

The CBO is a research arm of Congress.

The CBO team posted its analysis here.

The current AHCA proposal is based largely on the Better Way outline House Speaker Paul Ryan posted last summer. (Photo: Ryan's office)

The current AHCA proposal is based largely on the Better Way outline House Speaker Paul Ryan posted last summer. (Photo: Ryan’s office)

Paul Ryan’s outline

The CBO team came up with the numbers by comparing what it expects the world to like from now through 2016 under the AHCA with what it expects the world to look like over that period under the current Affordable Care Act rules.

The projected 2026 group health enrollment change, for example, reflects the difference between what the CBO team thinks group health enrollment might look like in 2026 under the AHCA rules and what it might look like under the ACA rules, not the difference between actual group health enrollment today and the the CBO projection for 2026 under AHCA rules.

The CBO released detailed ACA-rule health coverage coverage projections in March 2016. The March 2016 baseline projections are available here. The CBO estimated then that, in 2016, about 22 million of the 272 million U.S. residents under age 65 had individual or family commercial health coverage; 155 million had commercial group health coverage; and 68 million had Medicaid or Children’s Health Insurance Program coverage. Twenty-seven million were uninsured.

The AHCA bill is based largely on the Better Way outline posted by House Speaker Paul Ryan last summer.

The House Ways & Means Committee and House Energy & Commerce Committee approved drafts of the proposal last week and forwarded the drafts to the House Budget Committee.

The Budget Committee is preparing to merge the drafts at a markup Thursday, then forward the merged version to the House Rules Committee. The Rules Committee would develop rules for bringing the measure to the House floor.

If the House approves the measure, the measure would then go to the Senate, using the Senate budget reconciliation process. In the past, supporters of budget measures have needed just 51 votes to get measures through the Senate using the budget reconciliation process.

Republicans hold just 52 seats in the Senate. Republicans have structured the AHCA as an ACA funding change bill, rather than an ordinary bill, because, under traditional rules, an ordinary bill needs 60 votes to get to the Senate floor.


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