CBO Scores Trumpcare

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March 13, 2017 (San Diego) The Congressional Budget Office (CBO) has released the score for the American Healthcare Act (AHCA), dubbed “Trumpcare.” The score

The estimate has the following information, which is a higher number than even that of the Kaiser Foundation.

CBO and JCT estimate that, in 2018, 14 million more people would be uninsured under the legislation than under current law. Most of that increase would stem from repealing the penalties associated with the individual mandate. Some of those people would choose not to have insurance because they chose to be covered by insurance under current law only to avoid paying the penalties, and some people would forgo insurance in response to higher premiums.

Later, following additional changes to subsidies for insurance purchased in the nongroup market and to the Medicaid program, the increase in the number of uninsured people relative to the number under current law would rise to 21 million in 2020 and then to 24 million in 2026. The reductions in insurance coverage between 2018 and 2026 would stem in large part from changes in Medicaid enrollment—because some states would discontinue their expansion of eligibility, some states that would have expanded eligibility in the future would choose not to do so, and per-enrollee spending in the program would be capped. In 2026, an estimated 52 million people would be uninsured, compared with 28 million who would lack insurance that year under current law.

Let me repeat this. According to the CBO 24 million people, who otherwise would have insurance under the Affordable Care Act (ACA) in 2026 will not. This is pretty bad news since both the president and Congress ran on a platform that this would not happen.

However, the economic effect is one fiscal conservative will like. This from the report: “CBO and JCT estimate that enacting the legislation would reduce federal deficits by $337 billion over the 2017-2026 period. That total consists of $323 billion in on-budget savings and $13 billion in off-budget savings. Outlays would be reduced by $1.2 trillion over the period, and revenues would be reduced by $0.9 trillion.”

So the promise that this would cover more people for less cost is simply not going to happen, according to the CBO. However, Speaker Paul Ryan sees this as encouraging. It will not force people to get insurance they do not want to have.

However, the increase in costs is going to continue for at least another two years, while the CBO estimates that we will see a 10 percent decrease later on.

There is another note of caution. These estimates usually include a macroeconomic component. This does not have it since it was very rushed. So we will have to look at the earlier estimates issued in February. They pointed to possible recessionary conditions due to job losses. Moreover, they were consistent on the 24 million who would lose coverage by 2026. In that case, this is 2025.

 

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  1. House Delays Action on Trumpcare – Reporting San Diego
  2. The House to Vote on American Health Care Act – Reporting San Diego

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