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GOP ACA plan takes hit with CBO's dire estimates

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(Bloomberg) — A new estimate showing that 14 million Americans could lose health coverage by next year under the GOP Affordable Care Act de-funding plan leaves House Republicans in a bind with its dire picture of the bill’s effects heading into the 2018 congressional elections.

Even as the Trump administration challenged the estimate from the Congressional Budget Office, several Senate Republicans said the new analysis suggested that the party may need to rethink its plan.

Related: CBO sees AHCA cutting $337 billion from the deficit

Republicans “ought to slow down and get this right,”  Sen. Lindsey Graham, a Republican from South Carolina told reporters Monday night.

The 2018 portrait is particularly awkward. About 14 million more people would be uninsured next year under House Speaker Paul Ryan’s health plan compared to the number under the ACA. Although the CBO said the measure would eventually reduce the deficit, the cost figures would still be rising through 2018, while premiums would also still be going up.

The long-term picture also poses political risk to Republicans. The number of Americans losing coverage would rise to 24 million in 2026 under the plan, bringing the U.S. uninsured rate to a record 19 percent, according to the nonpartisan CBO.

Related: AARP says GOP plan burdens older, lower-income Americans

House Majority Leader Kevin McCarthy, of California, said Tuesday on Fox News that he believes the plan will pass in the House. “This is Obamacare gone — we repeal it, we repeal the taxes, and we actually make a system that works,” he said.

Entire plan

House Republican leaders and the White House, who had been attacking the CBO even before it released its findings, immediately rejected the latest estimates. They said the legislation is only the first of three phases of their health care plan.

“The CBO looked at a portion of our plan but not the entire plan,” Health and Human Services Secretary Tom Price told reporters outside the White House.

“We disagree strenuously with the report that was put out,” said Price, who was involved in hand-picking the current CBO director in his previous role as House Budget chairman. “We believe that our plan will cover more individuals at a lower cost and give them the choices that they want, the coverage that they want for themselves and their families.”

But several Senate Republicans said the new estimate shouldn’t be dismissed.

“Rather than attacking the CBO as a way of moving forward, I think the prudent thing for the party to do is to look at the CBO report and see if we can address some of the concerns raised,” Graham said.

Presidential setback

Sen. Susan Collins, a Republican from Maine, said the CBO “estimate that millions of Americans could lose their health insurance coverage if the House bill were to become law is cause for alarm. It should prompt the House to slow down and reconsider certain provisions of the bill.”  Sen. Bill Cassidy, a Louisiana Republican, added, “It doesn’t look good.”

Related: Collins and Cassidy unveil partial ACA repeal bill

Collins and Cassidy have an alternative bill they say is intended to increase coverage.

“Society is going to pay for health care whether it is through insurance or not,” Cassidy, a physician himself, said. “Society will pay for it either through cost shifting to the privately insured or it will pay for it through enhanced disproportionate payments” to hospitals that treat indigent patients.

The coverage estimate is a setback for President Donald Trump, who promised that “insurance for everybody” would replace Obamacare, which used government subsidies and an expansion of Medicaid to bring coverage to 20 million people.

The president is scheduled Tuesday to speak by telephone with Anthem Inc. Chairman Joseph Swedish and Price. Anthem has expressed support for some elements of the GOP Obamacare replacement, saying in a March 9 letter that it “addresses the challenges immediately facing the individual market and will ensure more affordable health plan choices for consumers in the short term.”

Republicans who have downplayed the CBO’s role point out that the office overestimated by several million the number of people who would sign up for insurance through the Obamacare marketplaces.

Heed warnings

Robert Laszewski, an insurance-industry consultant who’s long been critical of Obamacare, said Republicans should heed the CBO’s warnings of coverage losses, even if they think they’re too high.

“We’re quibbling about how much pain we want to inflict here,” he said.

Republicans picked the current CBO director, Keith Hall, who took over the role in April 2015.

“His vast understanding of economic and labor market policy will be invaluable to the work of CBO and the important role it will continue to play as Congress seeks to enact policies that support a healthy and growing economy,” Price said after Hall was installed.

Republicans trying to pass the legislation without Democratic support argued that any reduction in the rolls of the insured isn’t as important as what they say will be cheaper coverage. Ryan said there will be a stable transition if the bill is passed so “no one has the rug pulled out from under them.”

“Our plan is not about forcing people to buy expensive, one-size-fits-all coverage,” Ryan said in a statement. “It is about giving people more choices and better access to a plan they want and can afford.”

House Speaker Paul Ryan, who once led the more conservative House Republicans, now faces opposition from the most conservative House Republicans. (Photo: Ryan)

House Speaker Paul Ryan, who once led the more conservative House Republicans, now faces opposition from the most conservative House Republicans. (Photo: Ryan)

Lower premiums

Insurance premiums will be 15 percent to 20 percent higher over the next couple of years, before the GOP replacement plan goes fully into effect, the CBO estimated. They’d fall after that, thanks to more young people signing up and insurers offering skimpier coverage, the CBO says. In a decade, premiums are estimated to be 10 percent lower than they would have been under Obamacare.

The CBO said the GOP proposal would reduce the deficit by $337 billion over 10 years.

Democrats quickly used the CBO scores to attack the GOP plan.  Sen. Ron Wyden, an Oregon Democrat, said the report shows “Trumpcare is an awful deal for the American people.”

“The CBO report should be a knockout blow for Republicans in Congress,” said Chuck Schumer of New York, the Senate’s Democratic leader. “They should heed this warning and turn back from their plan that would be a disaster for the country.”

Coverage losses

The coverage losses would begin even before many parts of the Republican plan go into effect. The CBO estimates that next year about 14 million fewer people would have insurance, largely because they’d no longer choose to buy it. The losses in coverage after 2018 mainly come from Medicaid, CBO said. By 2026, about 52 million people would be without health insurance. If the Affordable Care Act instead continued, 28 million would be uninsured.

The American Medical Association, which already said it opposes the GOP plan, called the coverage losses under the measure “unacceptable.”

“The AMA believes we need continued progress to expand coverage for the uninsured,” Andrew Gurman, the doctor group’s president, said in a statement. “We hope the CBO estimates will motivate all members of Congress to find a pathway to work together on significantly improving proposed health reform legislation.”

Older, poorer people will be hit the hardest under Republicans’ plan.

A 64-year-old earning $26,500 a year would have a $19,500 premium for health insurance and get a tax credit of $4,900, leaving them to pay $14,600, the CBO estimated. That compares to a $15,300 premium under Obamacare with a $13,600 subsidy, leaving them to pay $1,700.

Skirt opposition

Ryan is trying to skirt opposition from the conservative wing of the party, which has derided the measure as “Obamacare Lite,” and moderates facing angry constituents who fear losing care. Several key Republican senators have said they can’t vote for the bill in its current form. Ryan has tried to steel party members against the office’s estimate.

Related: Cruz pushes ACA repeal gambit that could roil U.S. Senate

The push to kill the Affordable Care Act comes after seven years of quixotic votes against it, and President Barack Obama vetoed the repeal measure that reached his desk. Republicans have said throwing out the law would fulfill key campaign promises and set the stage for a broad rewrite of the tax code.

The legislation, called the American Health Care Act, repeals Obamacare’s mandate that everyone must have insurance or pay a penalty. It also provides age-based tax credits to help people purchase coverage, though they’re lower than the income-based subsidies offered under current law. The bill will also wind down Obamacare’s expansion of Medicaid in 2020. About 12 million people gained coverage in the 31 states that expanded Medicaid.

The cost of the new tax credit for health insurance to be established in 2020 is estimated at $361 billion through 2026, according to the CBO. The biggest spending reduction comes from Medicaid, where the CBO estimates funding will be reduced by $880 billion over a decade. That’ll lead to about a 17 percent reduction in Medicaid coverage, or 14 million fewer people covered by the program by 2026.

Planned Parenthood would also lose $234 million in funding, and the CBO projects that would reduce access to services aimed at helping women avert pregnancies. Several thousand additional babies will be born because of the lack of access to birth control, the office estimated, costing Medicaid $77 million over a decade.

Two key House committees approved the act Thursday after marathon sessions in which Democrats offered amendments rejected by Republicans. The bill will head next to the Budget Committee as early as Thursday before being considered by the full House of Representatives. 


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