Deciphering The CBO Estimates On The GOP Health Bill

March 16, 2017 by · Leave a Comment 

The Congressional Budget Office is out with its estimate of the effect that the Republican health bill, “The American Health Care Act,” would have on the nation’s health care system and how much it would cost the federal government. The GOP plan is designed to partially repeal and replace the Affordable Care Act passed during the Obama administration.

 

Here are some of the CBO highlights:

—$337 billion reduction in the deficit. That’s CBO’s estimate over the next decade. That takes into account both decreased government spending in the form of less help to individuals to purchase insurance and lower payments to states for the Medicaid program. It also includes decreased revenues from the repeal of the taxes imposed by the ACA to pay for the new benefits.

—24 million more people without insurance in a decade. The federal budget experts estimate that people will lose insurance and that drop will begin quickly. In 2018, they say 14 million more people would join the ranks of the uninsured. It would reach the 24 million by 2026, when “an estimated 52 million people would be uninsured, compared with 28 million who would lack insurance that year under current law.”

—15 to 20 percent increase in 2018 premiums, but relief would follow. Monthly costs for insurance would go up at first, due to the elimination of the requirement for most people to have insurance or else pay a tax penalty. After 2018, CBO estimates that average premiums would actually drop by 10 percent by 2026 compared to current law. That is because the lower prices for younger people would encourage more to sign up. By contrast, the law would “substantially [raise] premiums for older people.”

—$880 billion drop in federal Medicaid spending over the decade. That comes primarily by imposing, for the first time, a cap on federal contributions to the program for those with low incomes.

—14 million fewer Medicaid enrollees by 2026. That’s 17 percent fewer than projected under current law. The projection includes people who are currently eligible and would lose coverage, as well as people who might have become eligible if more states, as expected, expanded coverage under the ACA. CBO projects that is unlikely to happen now.

—95 percent of people who are getting Medicaid through the health law’s expansion would lose that enhanced federal funding. The CBO estimates that only 5 percent of enrollees in the expansion program would remain eligible for the higher federal payments by 2024 since the bill would phase out those payments to states as patients cycle in and out of eligibility.

—15 percent of Planned Parenthood clinic patients would “lose access to care.” These patients generally live in areas without other sources of medical care for low-income people. The Republican bill would cut out Medicaid funding for Planned Parenthood for a year.

This California Healthline story was produced by Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.

picture-of-health-frame California Healthline

What Does The House Health Care Bill Mean For California?

As the most populous state with the largest economy in the country, California stands to be dramatically affected by changes to the nation’s health law.

About 1.5 million people buy health insurance through the state’s exchange, Covered California, and most get federal subsidies. About 4 million receive Medicaid (called Medi-Cal here) through the program’s expansion under the Affordable Care Act. Altogether, Medi-Cal covers 14 million people in the state, roughly a third of its population.

The current House bill proposes to significantly change how — and how much — the federal government pays for these programs.

That likely would translate into millions of people in California losing coverage or seeing their costs rise. Medi-Cal might have to cut programs and eligibility. Source: California Healthline

House GOP Health Bill Jettisons Insurance Mandate, Much Of Medicaid Expansion

March 9, 2017 by · Leave a Comment 

House Republicans unveiled their much anticipated health law replacement plan Monday, slashing the law’s Medicaid expansion and scrapping the requirement that individuals purchase coverage or pay a fine. But they opted to continue providing tax credits to encourage consumers to purchase coverage, although they would configure the program much differently than the current law.

The legislation would keep the health law’s provisions allowing adult children to stay on their parents’ health insurance plan until age 26 and prohibiting insurers from charging people with preexisting medical conditions more for coverage as long as they don’t let their insurance lapse.  If they do, insurers can charge a flat 30 percent late-enrollment surcharge on top of the base premium, under the Republican bill.

In a statement, House Speaker Paul Ryan (R-Wis.) said the proposal would “drive down costs, encourage competition, and give every American access to quality, affordable health insurance. It protects young adults, patients with preexisting conditions, and provides a stable transition so that no one has the rug pulled out from under them.”

The GOP plan, as predicted, kills most of the law’s taxes and fees and would not enforce the so-called employer mandate, which requires certain employers to provide a set level of health coverage to workers or pay a penalty.

Democrats quickly condemned the bill. “Tonight, Republicans revealed a Make America Sick Again bill that hands billionaires a massive new tax break while shifting huge costs and burdens onto working families across American,” House Minority Leader Nancy Pelosi tweeted. “Republican will force tens of millions of families to pay more for worse coverage — and push millions of Americans off of health coverage entirely.”

The legislation has been the focus of intense negotiations among different factions of the Republican Party and the Trump administration since January. The Affordable Care Act passed in 2010 without a single Republican vote, and the party has strongly denounced it ever since, with the House voting more than 60 times to repeal Obamacare. But more than 20 million people have gained coverage under the law, and President Donald Trump and some congressional Republicans have said they don’t want anyone to lose their insurance.

When Republicans took control of both Congress and the White House this year, they did not have an agreement on the path for replacement, with some lawmakers from states that have expanded Medicaid concerned about the effect of repeal and the party’s conservative wing pushing hard to jettison the entire law.

Sen. Rand Paul (R-Ky.), one of those favoring a full repeal, tweeted: “Still have not seen an official version of the House Obamacare replacement bill, but from media reports this sure looks like Obamacare Lite!”

Complicating the effort is the fact that Republicans have only 52 seats in the Senate so they cannot muster the 60 necessary to overcome a Democratic filibuster. That means they must use a complicated legislative strategy called budget reconciliation that allows them to repeal only part of the ACA that affect federal spending.

Beginning in 2020, the GOP plan would provide tax credits to help people pay for health insurance based on household income and age, with a limit of $14,000 per family. Each member of the family would accumulate credits, ranging from $2,000 for an individual under 30 to $4,000 for people ages 60 and higher. The credits would begin to diminish after individuals reached an income of $75,000 — or $150,000 for joint filers.

Consumers also would be allowed to put more money into tax-free health savings accounts and would lift the $2,500 cap on flexible savings accounts beginning in 2018.

The legislation would allow insurers to charge older consumers as much as five times more for coverage than younger people. The health law currently permits a three-to-one ratio.

Community health centers would receive $422 million in additional funding in 2017 under the legislation, which also places a one-year freeze on funding for Planned Parenthood and prohibits the use of tax credits to purchase health insurance that covers abortion.

Both the Energy and Commerce and Ways and Means Committees are scheduled to mark up the legislation Wednesday. The committees do not yet have any Congressional Budget Office analysis of how much the legislation would cost or how many people it would cover.

Party leaders have said they want to have the bill to President Trump next month.

In a statement, senior Democrats on both panels said the measure would charge consumers “more money for less care. It would dramatically drive up health care costs for seniors. And repeal would ration care for more than 70 million Americans, including seniors in nursing homes, pregnant women and children living with disabilities by arbitrarily cutting and capping Medicaid,” said Rep. Frank Pallone of New Jersey and Rep. Richard Neal of Massachusetts.

The House GOP plan makes dramatic changes to Medicaid, the state-federal health insurance program that covers 70 million low-income Americans. The program began in 1965 as an entitlement — which means federal and state funding is ensured regardless of cost and enrollment. But the Republican bill would cap federal funding for Medicaid for the first time.

The federal government picks up between half and 70 percent of Medicaid costs. The percentage varies based on the relative wealth of the state.

Under the GOP plan, federal funding would be based on what the government spent in the fiscal year that ended Sept. 30. Those amounts would be adjusted annually based on a state’s enrollment and medical inflation.

Currently, federal payments to states also take into account how generous the state’s benefits are and what rate it uses to pay providers. That means states like New York and Vermont get higher funding than states like Nevada and New Hampshire and those differences would be locked in for future years.

Republicans have pushed to cap federal funding to states in return for giving them more control in running the program.

The legislation also affects the health law’s expansion of Medicaid, in which the federal government provided enhanced funding to states to widen eligibility. The bill would also end that extra funding for anyone enrolling under the expansion guidelines starting in 2020. But the legislation would let states keep the extra funding Obamacare provided for individuals already in the expansion program who stay enrolled.

About 11 million Americans have gained Medicaid coverage since 2014.

Changing the expansion program is a delicate balance for the Republicans. Four GOP senators from states that took that option said Monday they would oppose any legislation that repealed the expansion.

“We are concerned that any poorly implemented or poorly timed change in the current funding structure in Medicaid could result in a reduction in access to life-saving health care services,” Sens. Rob Portman of Ohio, Shelley Moore Capito of West Virginia, Cory Gardner of Colorado and Lisa Murkowski of Alaska wrote in a letter to Majority Leader Mitch McConnell.

This story was produced by Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.

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