EDITORIAL: GOP’s U.S. ‘prescription’ under review

The Congressional Budget Office’s scoring of the proposed American Health Care Act is in, and the debate over whether it’s better or worse than the Affordable Care Act is in full swing.

The report shows that the office and the staff of the Joint Committee on Taxation estimate that implementation of the AHCA in place of the ACA would reduce the federal deficit by $337 billion over a 10-year period, with the biggest savings coming from reductions in Medicaid outlays and the elimination of subsidies for non-group health insurance coverage. The AHCA’s largest expenses would come from repealing ACA changes to the IRS codes that increased the hospital insurance payroll tax rate for high-income taxpayers and placed a surtax on that group’s net investment income, on annual fees imposed on health insurers, and from the establishment of a new tax credit for health insurance.

The report estimates that 14 million more people who would have been insured under the ACA would be uninsured under the AHCA next year, though not necessarily because of an inability to pay premiums. The CBO report says that most of that increase in uninsured would come from the repeal of the ACA penalties for not having coverage. While some would drop coverage because of higher premiums, others who were only taking out policies to avoid being hit by penalties will drop coverage, the report said.

In 2020, however, that number would rise to 21 million more uninsured individuals relative to what would be expected under the ACA, with the number reaching 24 million by 2026. The increases over the period from 2018-26, the CBO said, would come from changes in Medicaid enrollment because of three factors: a cap on per-enrollee spending, states (like Georgia) that have not expanded Medicaid coverage not doing so, and states that have expanded Medicaid coverage discontinuing the expanded coverage of the program.

The bottom line: The CBO estimates that 28 million Americans would lack insurance coverage in 2026 under the ACA, while under the AHCA that number would be 52 million. That is troubling because it also means less preventative care and more pressure on hospital emergency rooms, where the most expensive care is provided.

A reduction in relatively healthy people — who no longer would face penalties — signing up for coverage in the non-group market under the AHCA likely will drive up average premiums in that market 15-20 percent relative to projections under the ACA, the CBO report noted. After that, the report said, factors including grants to states from the Patient and State Stability Fund, eliminating the requirement of insurers to offer plans covering certain percentages of the cost of covered benefits, and a younger mix of enrollees should offset the increase in average premiums from repealing the individual mandate. By 2026, the report says, the average premiums for single policyholders in the non-group market under the AHCA should be about 10 percent lower than what would be expected under the ACA. That would not be across the board, however, because premiums would be substantially lower for young adults and substantially higher for older adults. Older enrollees under the ACA can be charged triple what younger adults are. Under the AHCA, they could be charged five times as much.

One thing the CBO report mentions is that there is a great deal of uncertainty on its estimates. Simply, there is difficulty in predicting how the many parts of the medical puzzle will react, from the federal government, to 50 state governments, to insurers, to employers, to hospitals, to doctors and medical providers, to more than 318 million Americans. In the report, the CBO says it and the JCT staff tried to develop estimates that are “in the middle of the distribution of potential outcomes.”

Basically, what we have here is a best guess as to what will happen if individuals, politicians, businesses, agencies, medical providers and government agencies act reasonably, a high standard in today’s political climate. It’s neither a best-case nor a worst-case scenario.

Since it appears this plan, or something very similar to it, has a path to passage, we hope the AHCA will perform better than the CBO report estimates. As we urged Democrats in 2010, we also urge Republicans to critically review it and look for ways to improve it, rather than rush it into law. With no Democratic fingerprints on it — the same way Democrats ignored Republicans in developing the ACA — this will be the biggest legislation the GOP passes, and the party — as well as America — will have to live with the results.

If the Republicans’ prescription for American health care is the right one, Americans will benefit. If it’s not, there could very well be another groundswell movement to repeal and replace in 2020, with another set of “doctors” in charge of the House — as well as the Senate and the White House.