ACA replacement would cut Medicaid by $834 billion over 10 years, CBO says

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The American Health Care Act would reduce Medicaid spending by $834 billion from 2017 to 2026 if signed into law as passed May 4 by the House of Representatives, the Congressional Budget Office said Wednesday.

The reduction in Medicaid spending is less than the $880 billion reduction that would have occurred under a previous version of the bill that the CBO scored in March.

As with the previously scored version of the bill, which was not voted on in the House, Medicaid cuts would be the largest contributor to the savings realized under the bill if it becomes law. The agency's new analysis predicts a reduction in federal deficits by $119 billion over 10 years.

That deficit savings would be $32 billion less than what would have been realized under the previous version of the bill that the agency scored.

 Comparing AHCA bills

The American Health Care Act passed May 4 by the House of Representatives versus an earlier version of the bill, according to the Congressional Budget Office:

  • A smaller reduction in Medicaid spending ($834 billion for the bill that passed versus $880 billion for the earlier version)

  • A smaller deficit reduction ($119 billion versus $151 billion)

  • Larger premium increases for some older adults not yet covered by Medicare, and

  • Slightly fewer people being uninsured by 2026 (51 million versus 52 million)

By 2026, Medicaid enrollment would be reduced by 14 million people under the House-passed bill, a 17% reduction relative to the number under current law, according to the analysis. “Some of that decline would be among people who are currently eligible for Medicaid benefits, and some would be among people who CBO projects would, under current law, become eligible in the future as additional states adopted the ACA's option to expand eligibility,” the agency wrote in its report.

Kevin Prindiville, executive director of the advocacy group Justice in Aging, expressed disappointment in changes to the way Medicaid would be funded — on a per-capita or block grant basis rather than being open-ended — if the bill becomes law.

“Over 6 million older adults rely on Medicaid, and two-thirds of all Medicaid spending for older adults goes to essential long-term care services in nursing homes and at home and in the community,” he said in a statement. “With such drastic cuts and caps to the Medicaid program, the AHCA threatens the care of all of these seniors and the peace of mind of their families.”

Individually purchased insurance

A total of 51 million people under the age of 65 would be uninsured by 2026 if the House-passed bill becomes law, the CBO estimated. That number is 23 million more than would be uninsured under the current law, the Affordable Care Act. Under the previous version of the bill that the CBO scored, 52 million people would have been uninsured in 10 years compared with the current law.

“A disproportionately large number of the newly uninsured will be people between 50 and 64, whose premiums will skyrocket,” Prindiville said.

Out-of-pocket premium costs for a 64-year old with an income of $26,500 could increase 850%, from $1,700 to as much as $16,100, Sen. Susan Collins (R-ME), chairwoman of the Senate Special Committee on Aging, said in a press release issued after the release of the CBO score.

Average premiums for individually purchased health insurance would be lower “in part because the insurance, on average, would pay for a smaller proportion of health care costs,” the CBO said.

House members passed the bill before it received a score from the CBO and had not sent it to the Senate, knowing that if the CBO found that the legislation did not save at least $2 billion, representatives might have to vote on it again. The savings in the bill appear to have exceeded that procedural mark, although Politico reported Wednesday that aides to Republican senators continued to review the analysis to ensure that the bill “can travel safely across the Capitol.” Senate leaders have indicated that they will craft their own bill, which may be markedly different than the House version.

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