WASHINGTON, DC – Today, the non-partisan Congressional Budget Office (CBO) released a report on Republican legislation to repeal the Affordable Care Act (ACA), which found that such a plan could leave 18 million people without health insurance within the first year.
“The number of people who are uninsured would increase by 18 million in the first new plan year following enactment of the bill,” according to the report. “Later, after the elimination of the ACA’s expansion of Medicaid eligibility and of subsidies for insurance purchased through the ACA marketplaces, that number would increase to 27 million, and then to 32 million in 2026.”
The report also estimates that 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 ACA, also known as “Obamacare,” remained in place.
In response to the report, U.S. Senator Jack Reed (D-RI) issued the following statement:
“The Republican rush to repeal Obamacare could take a sickening toll on working families and our health care system. Millions will lose health coverage and millions more will see their health costs skyrocket.
“The Republican plan will repeal benefits for average Americans while padding profits for big insurance companies.
“Thanks to Obamacare, the uninsured rate is at its lowest point in recent history. It has fallen across our state from nearly 12 percent to under 4.5 percent.
“Over one hundred thousand Rhode Islanders gained coverage because of the ACA. And because of the ACA, seniors in Rhode Island are spending less on prescription drugs and accessing preventive care for free.
“Repealing the ACA means repealing these new benefits and shortening the life of the Medicare Trust Fund by a decade.
“This report clearly shows how repeal of the ACA could wreak havoc on everyone, not just people enrolled in the system. Premiums could skyrocket across the board. Large businesses could see their health care costs go up, which means workers will forgo pay increases as their employers look to simply maintain coverage.
“America cannot afford to turn its back on the millions of working families who have benefited under the ACA, and we must not turn back on the progress we have made.”
Highlights from the report include:
· “According to CBO and JCT’s analysis, upon enactment, H.R. 3762 would reduce the number of people with insurance; and in the first new plan year, premiums in the nongroup market would rise and participation by insurers in that market would decline. Starting in the year following the elimination of the expansion of Medicaid eligibility and the marketplace subsidies, the increase in the number of uninsured people and premiums would be greater, and participation by insurers in the nongroup market would decline further.”
· “CBO and JCT expect that the number of people without health insurance coverage would increase upon enactment of H.R. 3762 but that the increase would be limited initially, because insurers would have already set their premiums for the current year, and many people would have already made their enrollment decisions for the year. Subsequently, in the first full plan year following enactment, by CBO and JCT’s estimates, about 18 million people would become uninsured. That increase in the uninsured population would consist of about 10 million fewer people with coverage obtained in the nongroup market, roughly 5 million fewer people with coverage under Medicaid, and about 3 million fewer people with employment-based coverage.”
· “However, CBO and JCT also expect that insurers in some areas would leave the nongroup market in the first new plan year following enactment. They would be leaving in anticipation of further reductions in enrollment and higher average health care costs among enrollees who remained after the subsidies for insurance purchased through the marketplaces were eliminated. As a consequence, roughly 10 percent of the population would be living in an area that had no insurer participating in the nongroup market.”
· “According to CBO and JCT’s analysis, premiums in the nongroup market would be roughly 20 percent to 25 percent higher than under current law once insurers incorporated the effects of H.R. 3762’s changes into their premium pricing in the first new plan year after enactment.”
Effects after repeal of Medicaid expansion and subsidies:
· “By CBO and JCT’s estimates, 59 million people under age 65 would be uninsured in 2026 (compared with 28 million under current law), representing 21 percent of people under age 65. By 2026, fewer than 2 million people would be enrolled in the nongroup market, CBO and JCT estimate.”
· In CBO and JCT’s estimation, the factors exerting upward pressure on premiums and downward pressure on enrollment in the nongroup market would lead to substantially reduced participation by insurers and enrollees in many areas. Prior experience in states that implemented similar nongroup market reforms without a mandate penalty or subsidies has demonstrated the potential for market destabilization. Several states that enacted such market reforms later repealed or substantially modified those reforms in response to increased premiums and insurers’ departure from the market.
· After weighing the evidence from prior state-level reforms and input from experts and market participants, CBO and JCT estimate that about half of the nation’s population lives in areas that would have no insurer participating in the nongroup market in the first year after the repeal of the marketplace subsidies took effect, and that share would continue to increase, extending to about three-quarters of the population by 2026. That contraction of the market would most directly affect people without access to employment-based coverage or public health insurance.
· In total, as a result of reduced enrollment, higher average health care costs among remaining enrollees, and lower participation by insurers, CBO and JCT project that premiums in the nongroup market would be about 50 percent higher in the first year after the marketplace subsidies were eliminated—relative to projections under current law—and would about double by 2026.