The Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) released their cost estimate for the American Health Care Act (AHCA) this week. Here are some highlights:
Costs:
- Reduce federal deficits by $337Bover the 2017-2026 period ($323B on-budget savings, $13B off-budget savings)
- Outlays are reduced by $1.2T, while revenues decrease by $0.9T
- Largest savings are from reductions in Medicaid and eliminating subsidies for non group health insurance
- Largest costs are from repealing “Obamacare” taxes and fees, and for establishing a new tax credit for health insurance
Coverage:
- Initially in 2018, 14 million more people would be uninsured under the AHCA than under “Obamacare” – most of these are from repealing the penalties associated with the individual mandate
- In 2020 this number would rise to 21 million more uninsured people under the AHCA than under “Obamacare” because of changes to subsidies for insurance purchased in the individual market and to the Medicaid program
- And by 2026, the additional number of uninsured people under AHCA as compared to “Obamacare” would rise to 24 million because of changes in Medicaid enrollment
Stability of Health Insurance Market:
- The individual market would probably be stable in most areas under the AHCA or under “Obamacare”
Effects on Premiums:
- Prior to 2020, premiums for the individual market would increase 15-20% more than they would under “Obamacare”
- After 2020, increases in premiums for the individual market would be lower than they would under “Obamacare”
- By 2026, the increase in premiums in the individual market would be about 10% lower than under “Obamacare”
- These are average premiums – changes in premiums would differ significantly for people of different ages because the AHCA changes the age-rating rules. Under “Obamacare,” insurers can’t charge more than 3X for older enrollees than younger ones. Under the AHCA, insurers would be allowed to charge 5X more for older enrollees than younger ones. This could result in substantially reduced premiums for young adults and substantially increased premiums for older adults.
The full CBO/JCT cost estimate can be found at: