A few more reasons why Republicans hate the CBO analysis of their health-care plan
Debunking ObamaCare alarmism, predicting thousands more Medicaid babies, and more
The headline numbers from the nonpartisan Congressional Budget Office's analysis of the Republican health-care bill are the 24 million more people expected to not have insurance in 2026 (compared to projections if ObamaCare remains in place), and the $337 billion reduction in the federal deficit, thanks largely to steep federal cuts in Medicaid and the elimination of ObamaCare's subsidies for Americans buying health care through federal exchanges.
But there are a surprising number of other interesting facts and figures in the 37-page CBO/Joint Committee on Taxation (JCT) analysis of the GOP's American Health Care Act.
For example, the economists at the CBO — headed by a conservative economist, Keith Hall, hand-picked by Republicans in Congress — disagree with President Trump and congressional Republicans that ObamaCare is a "disaster" imploding in an unsustainable "death spiral":
Decisions about offering and purchasing health insurance depend on the stability of the health insurance market — that is, on having insurers participating in most areas of the country and on the likelihood of premiums' not rising in an unsustainable spiral. ... In CBO and JCT's assessment, however, the nongroup market would probably be stable in most areas under either current law or the legislation. Under current law, most subsidized enrollees purchasing health insurance coverage in the nongroup market are largely insulated from increases in premiums because their out-of-pocket payments for premiums are based on a percentage of their income; the government pays the difference. The subsidies to purchase coverage combined with the penalties paid by uninsured people stemming from the individual mandate are anticipated to cause sufficient demand for insurance by people with low health-care expenditures for the market to be stable. [CBO]
Also, the CBO estimates that thanks to the GOP bill's defunding of Planned Parenthood, the AHCA would greatly reduce "services that help women avert pregnancy," especially low-income women, leading to a significant rise in the number of births. In one year alone, "the number of births in the Medicaid program would increase by several thousand," and "some of those children would themselves qualify for Medicaid and possibly for other federal programs," the CBO said, costing the federal government $77 million in direct Medicaid spending alone through 2026.
If you get insurance through your job, like about half of Americans do, the CBO analysis might affect you, too. By 2020, the CBO predicts, 2 million fewer people would have insurance through their work, and that number would grow to 7 million by 2026. This is based partly on the assumption that "fewer employees would take up the offer of such coverage in the absence of the individual mandate penalties," but also because absent the mandate that larger companies offer health plans, "fewer employers would offer health insurance to their workers."
Why wouldn't more employers shunt their workers onto the private insurance market? "Businesses are legally obligated to cover their rank-and-file employees if they want to insure their executives," says Olga Khazan at The Atlantic, "and not offering health insurance would make it harder to recruit people at the managerial level and above, according to Rob Shapiro, a former U.S. undersecretary of commerce." Businesses with younger workers would be expected to choose to drop group coverage, and insurance rates for young, healthy workers are projected to drop starting in 2020 (while costs for older customers not yet eligible for Medicare will rise sharply), though the cheaper insurance will be more bare-bones than either current offerings of the employer-sponsored plans.
Health care makes up roughly a fifth of the U.S. economy, so you might expect the AHCA to have some macroeconomic effects, too. The CBO certainly does — just don't ask what they are.
Because the bill is "major legislation" as defined under House rules, that "triggers the requirement that the cost estimate, to the greatest extent practicable, include the budgetary impact of its macroeconomic effects," the CBO said. "However, because of the very short time available to prepare this cost estimate, quantifying and incorporating those macroeconomic effects have not been practicable."
Given the rest of the CBO analysis, that probably qualifies as good news for the GOP.