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CBO Predicts 18 Million Uninsured, Higher Premiums In First Year After Obamacare Repeal And Delay
And that’s just the short-term effects.
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The Congressional Budget Office
just issued a report on the likely effects of a Republican effort to
repeal Obamacare immediately but keep some elements of the coverage
expansion in place for two years.
The numbers are staggering and suggest the GOP will find it difficult
to keep its promise of an “orderly transition,” unless they deviate
significantly from a prototype repeal bill they passed last year.
Within
the first year, the CBO predicts, 18 million people would lose
insurance. In addition, premiums for people buying coverage on their own
would increase, on average, by 20 to 25 percent relative to what they
would be if the Affordable Care Act remained in place.
And
that’s just the short-term effects that a “repeal-and-delay” strategy
would have. Once Obamacare’s tax credits and Medicaid expansion expired
fully, the CBO says, millions more could lose insurance and premiums
would rise yet again.
In
the end, the CBO concludes, the number of Americans without health
insurance would be 32 million higher and premiums would be 50 percent
higher ― again, relative to what they would be if Obamacare stayed on
the books.
It’s a worst-case scenario
that assumes Republicans can’t stabilize insurance markets during the
transition. The CBO’s estimate also doesn’t consider the possibility
that Republicans would replace President Barack Obama’s health care law
with something else.
Republican leaders reacted to the report by emphasizing that possibility.
“This projection is
meaningless, as it takes into account no measures to replace the law nor
actions that the incoming administration will take to revitalize the
individual market that has been decimated by Obamacare,” AshLee Strong,
spokesperson for House Speaker Paul Ryan (R-Wis.), said on Tuesday.
Replacing Obamacare wouldn’t
be so easy to do, however. The GOP has not settled on an alternative to
Obamacare even though it’s been promising one for nearly seven years,
and it remains deeply divided over fundamental questions about the
government’s role in health care.
At the very least, any
scheme that could get through the Republican Congress is likely to cover
far fewer people or provide far less financial protection for people
with insurance, given the GOP’s desire to cut federal spending on health
care dramatically.
Projecting
the effects of changes in health care law is hardly a science, and like
all CBO reports, this one carries a significant degree of uncertainty.
It also includes several key assumptions.
The prediction of quick,
massive insurance losses assumes that repeal immediately eliminates the
penalty for not carrying insurance ― that is, the dreaded individual
mandate ― while leaving in place nearly every other element of the
coverage expansion. In other words, insurers would still be subject to
requirements that they sell to anybody, regardless of pre-existing
conditions, and offer only policies that cover a broad swath of
benefits.
These
conditions would lead to severe “adverse selection” problems, as the
people who expected to be healthy would be more inclined not to buy
insurance ― or, at least, wait until they got sick first. Insurers would
also exit markets, in large numbers as opposed to the sporadic exits so
far, as they figured the market was in decline. Those that remained,
the CBO believes, would raise their premiums.
In addition, the CBO
expects, fewer people would sign up for employer coverage and fewer
would enroll in Medicaid without the mandate in place.
Another
key assumption the CBO made is that, after the transition period, the
funding for tax credits and subsidies would go away, but those same
regulations would remain.
In
other words, insurers would still be subject to the rules on
pre-existing conditions and benefits ― only now people would be even
less likely to buy coverage when they were healthy, because in addition
to no mandate there’d be no financial assistance for insurance premiums.
And the regulations themselves would be keeping premiums high, since
they require insurers to pay for expensive medical services that people
with serious health problems need.
The
CBO didn’t draw these assumptions out of thin air. It based them on a
bill that Republicans passed, and President Obama vetoed, last year.
That bill would have repealed the individual mandate immediately. Many
Republicans have indicated they want to do the same thing now, because
they find the requirement so burdensome and offensive.
As for leaving the insurance
regulations in place, that’s a function of parliamentary procedure.
Republicans have only 52 seats in the Senate ― not enough to overcome a
Democratic filibuster. The only way to repeal Obamacare is to do so
through the special budget “reconciliation” procedure, which is
impossible to filibuster but, by rule, can only involve measures related
to the budget.
While
the rules are subject to interpretation by the Senate’s
parliamentarian, it’s likely that Republicans would be able to use the
process to eliminate only Obamacare’s funding and spending, and not its
regulations.
The CBO’s estimates closely mirror a report that the nonpartisan Urban Institute published last month. “What [the CBO] is finding is very consistent with what our modeling showed,” said Linda Blumberg, an Urban Institute senior fellow and co-author of that report.
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