Must-Read: CBO: American Health Care Act

Must-Read: CBO: American Health Care Act: “CBO and JCT estimate that, in 2018, 14 million more people would be uninsured under the legislation than under current law…

…Later, following additional changes to subsidies for insurance purchased in the nongroup market and to the Medicaid program, the increase in the number of uninsured people relative to the number under current law would rise to 21 million in 2020 and then to 24 million in 2026… in large part from changes in Medicaid enrollment—because some states would discontinue their expansion of eligibility, some states that would have expanded eligibility in the future would choose not to do so, and per-enrollee spending in the program would be capped. In 2026, an estimated 52 million people would be uninsured, compared with 28 million who would lack insurance that year under current law….

In CBO and JCT’s assessment, however, the nongroup market would probably be stable in most areas under either current law or the legislation. Under current law, most subsidized enrollees purchasing health insurance coverage in the nongroup market are largely insulated from increases in premiums because their out-of-pocket payments for premiums are based on a percentage of their income; the government pays the difference…. Under the legislation… subsidies to purchase insurance, which would maintain sufficient demand for insurance by people with low health care expenditures, and grants to states from the Patient and State Stability Fund… would, in the agencies’ view, lower average premiums enough to attract a sufficient number of relatively healthy people to stabilize the market….

The ways in which federal agencies, states, insurers, employers, individuals, doctors, hospitals, and other affected parties would respond to the changes made by the legislation are all difficult to predict, so the estimates in this report are uncertain. But CBO and JCT have endeavored to develop estimates that are in the middle of the distribution of potential outcomes.

March 13, 2017

AUTHORS:

Brad DeLong
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