CBO report stirs new debate over details of House GOP health plan

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As snow fell Monday night in the nation’s capital, both Democrats and Republicans were taking stock of a new report from the Congressional Budget Office, which gave each side plenty of talking points – for and against – a new GOP health bill in the Congress.

Let’s look at some of the highlights:

1. The CBO shows the GOP plan would reduce the deficit. The new Congressional Budget Office report on the Republican health care plan held positives for Republicans, like finding the federal deficit would be reduced by $337 billion over 10 years. While that was a number that GOP lawmakers were very happy to trumpet, $33.7 billion in savings each year for a decade wouldn’t really put a dent in the overall fiscal situation of the United States.

2. How much would the new GOP tax credits cost? The CBO estimated that the new refundable tax credit to help people buy health insurance would total $361 billion. But remember – that is not a full 10 year cost figure, because the tax credits don’t fully go into effect until 2020. In 2020, the CBO estimated the tax credits would cost $30 billion, but more than double to $68 billion by 2026, going up every single year of this estimate. Let’s just say the next three years, that figure stays at $70 billion for tax credits, that’s another $210 billion – which means the ten year cost would be closer to $600 billion.

3. What about premiums? How much will people pay? The report had a mixed outcome on the Republican bill for those who are under Obamacare right now in the exchanges on the individual insurance market. In the short term, the CBO found that premiums would go up – maybe by as much as 15-20 percent – but then start to level off and come down around 10 percent overall by 2026. While that’s a good outcome for the GOP, that bottom line reduction is nine years away.

4. Cutting funding to Planned Parenthood has hidden costs. Tucked in to the GOP health bill is a provision that is aimed at stripping funds from Planned Parenthood operations. This would be mainly money from the Medicaid program that goes to women’s clinical services. That move would save an estimated $234 million over 10 years. But – because there would be less money available for services that avert pregnancies, CBO estimates that Medicaid spending would jump by $77 million over ten years in dealing with more births, and extra Medicaid costs for some of those children. So, that reduces the savings to $156 million over ten years.

5. GOP insurance surcharge would deter some from coverage. While the Republican health plan would do away with the individual mandate, it has a provision that says if you don’t have continuous insurance coverage, then insurance companies can charge you extra to buy a new policy. The CBO estimates one million people would buy insurance to avoid that surcharge, but that another two million would go without insurance, and not pay the surcharge.

6. GOP plan goes against Trump promise on Medicaid. On the campaign trail, President Trump often sounded a policy note that was at odds with Republicans in the Congress, as he vowed not to touch entitlement programs. The CBO estimates that this GOP plan would reduce Medicaid spending by $880 billion over the next ten years. The CBO found that 14 million fewer people would enrolled in Medicaid over the next ten years. The big changes in Medicaid would start in 2020, when the expanded Medicaid plan under the Obama health law is rolled back.

7. GOP plan increases the number of uninsured Americans. The basic numbers from the CBO review found that the House GOP plan would increase the number of people without health insurance by 24 million in 2026 (as you see in the table below, the uninsured figure would be 28 million under the Obama health law in 2026, and 52 million under the GOP AHCA plan). Democrats seized on that figure immediately, and are likely to keep up those attacks.

8. GOP says CBO didn’t take into account Phases 2 and 3. As Republicans digested the CBO report, they noted that the cost and coverage estimates were incomplete, since it only included the first phase of GOP efforts to overhaul the Obama health law. “It does not take into account prong two, executive actions the administration has and will continue to take to stabilize health markets and lower costs,” said Senate Majority Leader Mitch McConnell. “It does not account for prong three, future legislative action. And because this CBO report paints only a third of the picture, its statistics on coverage are obviously premature.” But since the GOP hasn’t formulated those plans, it’s hard for the CBO to evaluate them.

9. Almost $900 billion in tax cuts. The CBO estimates that over ten years, the GOP plan will cut taxes by $882.8 billion, which includes everything from getting rid of the tanning tax, and allowing health insurance companies to write off more of their executive pay, to major reductions in taxes for Medicare and a high-earner ‘net investment tax.’

10. CBO: Older people would see higher costs. One of the sharpest lines drawn by the Congressional Budget Office is on what would happen to older Americans under the GOP health plan. In a table setting out examples for people in at age 21, 40 and 64, the comparison between the Obama health law and the GOP plan (with subsidies and then tax credits), it shows a gigantic jump in costs for Americans who are nearly on Medicare. Older people vote, and the AARP was already throwing its weight against the bill on Monday.

 


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