(Bloomberg View) — Well, the Congressional Budget Office has released its score for the new Republican health care bill. And those of us who covered Obamacare’s passage are having flashbacks to 2009.
Those flashbacks, however, are not completely parallel. During the process of passing the Affordable Care Act, or the ACA, many of us complained that Democrats were gaming the CBO process, tossing out desperate cuts and pay-fors over and over until they got the score they wanted, in much the way video-gamers try to kill a hard boss. They ended up jamming in a bunch of provisions that made Obamacare’s finances look sturdier than they were, but realistically, had no hope of ever taking effect (among my favorites: a never-never long-term care program, and a requirement that everyone in the country had to issue 1099s to anyone who sold them more than a few hundred dollars worth of stuff). We certainly can’t accuse Republicans of that!
The CBO score says that under the Republican plan, 24 million fewer people would have insurance in 2026, compared to their projections under current law. Premiums for the next few years would be higher than projected under the ACA, then lower, as the markets stabilized with a younger insurance pool and somewhat less generous insurance being purchased by those younger, healthier customers. In 2026, the budget deficit would be $92 billion lower than currently projected, with a total savings of $337 billion over ten years.
I mean, I sure do like those budget numbers. On the other hand, 24 million is a whole lot of folks. Republicans are going to stand accused of taking insurance away from a lot of needy people in order to cut nearly a trillion dollars worth of taxes. And in fairness, that is kind of what this bill does.
Now, to be sure, some folks will not so much be losing insurance as deciding not to buy it because they don’t get good value out of it right now — or can’t afford it. According to the CBO, under the ACA, a 64-year-old making 450 percent of the federal poverty line, or about $53,000 a year, can expect to pay $15,300 a year for a plan that covers 65 percent of their expected medical expenses. You can easily see why someone in that situation would be reluctant to pay that much for insurance. Many others will be “young invincibles” who see no reason to pay for insurance when they never get sick, and thanks to the repeal of the mandate, now won’t have to.
On the other hand, let’s look at what happens to a near-senior who’s currently eligible for big subsidies, and benefits from a rule which says that insurers cannot charge older people more than three times what they charge their youngest customers.
He may not have much patience for debates about forecasting technical assumptions… (Photo: Thinkstock)
Old bill: $1,600. New bill: $14,600
While the 64-year-old in the above example actually benefits slightly from the Republican health care law, seeing their premiums drop by $700, their twin brother making 175 percent of the federal poverty line, around $20,000, will see their premiums rise from $1,700 to $14,600 — an amount that would be pretty much mathematically impossible for them to pay. Indeed, as you get nearer to the poverty line, it is theoretically possible for a 64-year-old to face premiums that actually exceed their income.
That’s going to be … a hard sell. The AARP will not like it, nay, they will not like it at all. And things the AARP does not like tend to have a hard time getting made into law.
Moreover, many of the folks who will see their insurance options shrink are those older white voters in rural districts who helped put Trump over the top. The merely middle aged won’t get hurt too badly, though they, too, will see their premiums go up. But the older, not-poor-but-sure-not-rich folks? They get creamed.