The Congressional Budget Office (CBO) has finally had the opportunity to analyze the final version of H.R. 1628, the American Health Care Act (AHCA), passed by the House of Representatives on May 4, 2017. It is highly unusual for a bill. especially a budget reconciliation bill with impacts on millions of Americans and hundreds of billions of dollars in the federal budget, to be acted upon by the House without a CBO analysis but the Republicans in the House pushed through the vote along party lines earlier this month.
The CBO concludes that the bill would result in 23 million Americans, or over 18 percent of the total population, without health insurance by 2020. This would mean that all the increases in health insurance coverage resulting from the Affordable Care Act (ACA), enacted in 2010, would be undone, returning our national uninsured rate to pre-ACA levels. About 14 million Americans currently insured through the expansions of Medicaid under the ACA would lose their health insurance by 2020.
In the private health insurance markets, the AHCA would only provide $375 million in tax credit subsidies to low- and middle-income Americans to help them pay their health insurance premiums and costs such as co-payments and deductibles. This is compared to $671 million that is now available under the ACA, which means that low- and middle-income Americans would have to find a way to pay $296 million to keep their health insurance. Since many millions will not be able to afford their health insurance without these tax credit subsidies, they will be among the 23 million that will become uninsured.
The AHCA also cuts $834 billion from the Medicaid program, a significant reason that the legislation results in net tax savings (estimated at $119 billion over ten years, $32 billion lower than the prior version of the bill), even with hundreds of billions of dollars tax cuts for the highest income Americans (at least $231 billion), health plans ($144.7 billion), pharmaceutical companies ($28.5 billion), and medical device manufacturers ($19.6 billion). Another provision allows health plans to take additional business deductions for compensation paid to their highest paid executives, resulting in $500 million less tax revenues.
Buried in the tables accompanying the report is one stark example of how significant the impact the AHCA will have on many Americans. In 2026, ten years after enactment (and full implementation), a 64-year old with an annual income of $26,500 (175% of the federal poverty level) would go from paying $1,700 for health insurance under the ACA to having to pay $16,700 for the same coverage. That individual’s premiums would go up $5,700 while losing $8,700 in tax credits to help pay for those premiums.
The U.S. Senate has yet to take action on H.R. 1628 or any similar legislation.