On May 24, the Congressional Budget Office (CBO) released its revised score of the house-passed American Health Care Act (AHCA). In comparison to today, the CBO score indicates the AHCA would significantly reduce the number of non-group insured. The score reinforces the fact that the AHCA, in its current state, is unlikely to pass in the Senate.
Key findings include:
- Over the next decade, the AHCA would leave 23 million more Americans without health insurance.
- This leaves a total estimate of 51 million people under the age of 65 that would be without healthcare coverage in 2026, as compared to an estimate of 28 million in the same period under the ACA.
- Of those who receive tax credits to purchase insurance, many may have insurance that does not cover major medical expenses. These people are included in the uninsured estimate.
- In 2018 and 2019, the AHCA would cause premiums to increase in the individual market by an average of 20 percent and 5 percent respectively, with the potential for higher increases for lower income and older Americans.
- Premiums will differ among states who waive or modify essential health benefit requirements and will be impacted by the state’s share of the Patient and State Stability fund.
- Insurers will be able to vary premiums by health status for those with a gap in coverage in states that choose this approach.
- While premiums for individual market insurance will eventually decline on average, this is, in part, a result of covering less and shifting costs to the individual.
Federal Budget Impact
- The AHCA would reduce the federal deficit from 2017 to 2026 by $119 billion ($32 billion less than the initial version of the bill).
- The major components impacting the budget deficit include $834 billion in reduced Medicaid funding and $276 billion in reduced subsidies. Repeal or delay of taxes and penalties and $117 billion spending to reduce premium costs offset a significant part of the decrease.
The Path Forward
The Senate plans to create its own version of the AHCA, which means the impact of a new health reform bill will likely be completely different. As with House members, Senators will have difficulty getting the required votes to pass a healthcare reform bill given the dichotomy between conservatives and moderate Republicans. U.S. Senate Majority Leader Mitch McConnell confirms there is uncertainty around the path forward for any new healthcare reform bill.
Employers have worked extremely hard since 2010 to comply with the ACA requirements—it’s not time to stop now. Regardless of the direction of legislation, reporting will continue to be required and employers should not underestimate the likelihood that penalties will be enforced. The IRS will need employer reporting to reconcile back to individual tax returns as well as identify eligibility for subsidies.
Health e(fx) is here to help employers succeed amid uncertainty and change. Let us know how we can help. Contact your Client Service Advocate or email us at firstname.lastname@example.org with questions.