CSAC Bulletin Article

CBO Releases Analysis of GOP Healthcare Reform Bill

March 16, 2017

Earlier this week, the nonpartisan Congressional Budget Office (CBO) released its highly anticipated analysis of the House Republican healthcare reform bill (HR 277).  In a potential blow to the legislation, the CBO projects that the measure – entitled the American Health Care Reform Act (AHCA) – would shift significant health care costs to states and counties and dramatically reduce the number of individuals with health insurance. 

According to CBO, the AHCA would reduce by 25 percent the federal contribution to the Medicaid program by the year 2026, amounting to an $880 billion cut over the next ten years.  Combined with other changes proposed in the bill, the CBO estimates that there would be roughly 17 percent fewer Medicaid enrollees by 2026 – amounting to 14 million individuals.  All told, the bill would result in 24 million individuals joining the ranks of the uninsured over the course of the ensuing decade.

In response to the analysis, congressional Republicans, along with the Trump White House, sought to discredit the CBO estimate by questioning the accuracy of the results.  Specifically, GOP leaders pointed to the congressional scorekeeper’s failure to correctly predict the number of uninsured individuals who would gain coverage under the Affordable Care Act (ACA).  At the same time, supporters of the Republican proposal scrambled to put a positive spin on the CBO analysis, with a number of members praising the AHCA for reducing the federal deficit by $337 billion over the next decade. 

It should be noted that the budgetary savings under the GOP measure would be primarily derived from a combination of Medicaid cuts and a reduction in the size and scope of healthcare-related tax credits.  Incidentally, although nearly all of the taxes that support the ACA would be repealed by HR 277, the legislation would retain the ACA’s so-called “Cadillac tax” on high value insurance plans.  Pursuant to the bill, implementation of the tax – which would impact a number of health insurance plans provided by counties – would be delayed from 2020 to 2025.

Despite the considerable concerns identified in the CBO report, the House Budget Committee earlier today advanced the AHCA by a vote of 19 to 17.  Three members of the conservative House Freedom Caucus joined every Democrat in opposing the bill.  While today’s action marks the third time a House committee has voted to clear the legislation, the GOP defections represent the first official Republican opposition to the effort.  The vote may signal additional trouble ahead for Republican leaders who cannot afford more than 21 defections on the House floor.

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