Stay ahead of developments in federal and state health care law, regulation and transactions with timely, expert news and analysis.
By Sara Hansard
The number of uninsured would be about 13 million higher by 2026 if the House Republican Obamacare replacement bill passes, the HHS said June 13.
The estimates from the Department of Health and Human Services were much more favorable to the American Health Care Act ( H.R. 1628) than the nonpartisan Congressional Budget Office’s May 24 estimate. The CBO had predicted that the number of uninsured people relative to the number projected under the Affordable Care Act would reach 19 million in 2020 and 23 million in 2026. In 2018, the HHS said, the number of uninsured would be about 4 million higher than under current law.
The report comes from Centers for Medicare & Medicaid Services chief actuary, Paul Spitalnic, but the estimate will likely be seen as biased in favor of the AHCA. The large increase in the uninsured under the AHCA is a major stumbling block Republicans face in their attempt to repeal and replace the Affordable Care Act, which is experiencing major difficulties as more health insurers leave the exchanges and the individual market due to plan losses.
In 2018 and 2019 under current law, the number of uninsured is projected to be about 27 million, which would rise to 31 million and 32 million, respectively, due to repeal of the individual mandate requiring people to buy coverage or pay a penalty and reduced Medicaid coverage, the CMS said. By 2026 the number of uninsured would increase from 31 million under current law to more than 43 million under the AHCA, the report said.
Federal expenditures would decrease by $328 billion in fiscal years 2017-2026 under the AHCA compared with current law, primarily because of lower Medicaid spending, the CMS actuary said. That would be an an increase of $209 billion in savings over the CBO projection of $119 billion.
In calendar year 2026 Medicaid enrollment would be 8 million lower under the AHCA than under current law, the CMS said. There would be a decline of 6 million in enrollment for newly eligible adults under the current law, and a decline of 2 million in enrollment for all other Medicaid enrollees attributable to more frequent eligibility redeterminations, the repeal of retroactive eligibility, and optional state work requirements for adults, it said.
Combined with the implementation of per-capita allotments under the AHCA, overall Medicaid spending would be $105 billion under the AHCA, nearly 11 percent lower than under current law, in 2026, the CMS said.
For the individual insurance market, average gross premiums were estimated to be about 13 percent lower in 2026 under the AHCA than under current law. However, after federal and state subsidies are accounted for, the net premiums would be about 5 percent higher, or $19 more per month, than under current law, and cost-sharing amounts would be about 61 percent higher in 2026 under the AHCA than under current law, the CMS said.
The AHCA would eliminate the ACA’s premium tax credits and cost-sharing reduction subsidies in 2020 for people buying coverage in the individual market. The AHCA instead would provide a refundable tax credit based on the age of the enrollee buying coverage in the individual market.
The impact varies by age and income of the enrollee and depends on whether the enrollee lives in a state that applies for waivers from essential health benefits or requirements limiting how much insurers can charge people with pre-existing conditions, the report said.
Under the AHCA states could apply for waivers that would allow them to define the essential health benefits that must be covered and permit issuers to consider health status in setting premiums.
The Medicare Hospital Insurance trust fund would be depleted in 2026 under the AHCA, two years earlier than under current law, primarily due to the loss of revenue from repealing the additional Medicare tax on high-income earners and additional Medicare disproportionate share hospital spending, the CMS said.
Total national health spending was estimated to be $258 billion, or 0.6 percent lower under the AHCA than under current law. Households would finance $21 billion, or 0.2 percent more of national health spending. An increase in direct out-of-pocket expenditures of nearly $221 billion would almost entirely be offset by lower spending from declines in employer-sponsored coverage, a reduction in the Medicare tax for high-income earners, and the effect of eliminating the health insurance tax on premiums, the CMS said.
“The legislation would result in substantial changes in the way that health care insurance is provided and paid for in the U.S.,” the report said. “Accordingly, the estimates presented here are subject to greater uncertainty than is typical when estimating the impact of health care legislation.”
Moreover, the report added, “while we have assumed that the individual market will be viable and stable under both current law and the AHCA, it is possible that certain waivers granted under the AHCA could result in a deteriorating or possibly failing individual market depending on how a State chose to implement the waiver.”
As the CMS actuary released its assessment of the AHCA, the CMS released a county-level map showing 47 counties in Ohio, Missouri, and Washington that would not have coverage in the ACA exchanges in 2018. About 35,000 exchange participants live in the counties. Qualified Health Plan submissions for the federally facilitated exchanges are due June 21.
At a health-care forum June 13, Sen. Bill Cassidy (R-La.), who has been active in the health-care debate, argued that the ACA’s Medicaid expansion is not affordable. “The kind of dirty little secret” about the expansion program is that states can’t afford their 10 percent share of the cost of the program in 2020, he said.
“California’s 10 percent will be $2.2 billion, and I don’t see Sacramento having $2.2 billion laying around,” Cassidy said. The cost for Louisiana will be $310 million, and legislators in Oregon and Arkansas have proposed eliminating or rolling back the expansion, he said.
“That’s why I hope that Democrats would come to the table” to negotiate a replacement bill, Cassidy said. “It isn’t just like, oh if you keep the Medicaid expansion, things are going to be good.”
To contact the reporter on this story: Sara Hansard in Washington at email@example.com
To contact the editor responsible for this story: Kendra Casey Plank at firstname.lastname@example.org
Estimated Financial Effect of the "American health Care Act of 2017" is at https://www.cms.gov/Research-Statistics-Data-and-Systems/Research/ActuarialStudies/Downloads/AHCA20170613.pdf.
Information on the American Health Care Act (H.R. 1628) is at https://www.congress.gov/bill/115th-congress/house-bill/1628.
The Congressional Budget Office's May 24 estimate on the affects of the AHCA is at https://www.cbo.gov/publication/52752.
The CMS's county-level map of exchange coverage is at https://downloads.cms.gov/files/cciio-exchange-carriers-by-county.pdf.
Information on Prioritizing Patients: A Discussion on Outcomes-Based Care is at https://prioritizingpatients.splashthat.com/.
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)