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The Congressional Budget Office, the nonpartisan office within the legislature that provides research on the impact of possible policies, said in a report released Tuesday that a partial repeal of the Affordable Care Act, better known as Obamacare, would have huge effects on the US healthcare system.
According to the report, the partial repeal proposed by Republicans would lead to a huge increase in the number of uninsured Americans and skyrocketing premiums for those in the individual insurance market.
The report expands on an analysis done last year by the CBO that analyzed the effects of a GOP-led repeal of various provisions of the ACA. Republicans have proposed rolling back the individual mandate, Medicaid expansion, and subsidies for people purchasing insurance in the individual marketplace.
The CBO analysis also accounts for a repeal that would, as Republicans have promised, leave intact provisions such as children’s ability to stay on their parents’ insurance until age 26 and insurers’ inability to deny coverage based on a preexisting condition.
The CBO projections are based on the 2015 ACA repeal bill that was vetoed by President Barack Obama. A new repeal bill is currently being drafted and could have some differences, though the GOP’s message on its goals has been roughly the same. Additionally, congressional Republicans and President-elect Donald Trump have promised to quickly create a replacement for the healthcare law, and these projections do not take into account the possible effects of such a bill.
In terms of coverage, the CBO projects that the increase in the number of uninsured people would be dramatic after a partial repeal.
“The number of people who are uninsured would increase by 18 million in the first new plan year following enactment of the bill,” the report said. “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.”
Republicans have said they don’t want to end up with fewer people with health insurance, and Republican lawmakers have said they don’t want to be “pulling the rug out” from the more than 20 million people who have gained access to insurance through the ACA.
In addition to the effects on insurance coverage from a repeal, the CBO report estimates that premiums would be 20-25% more than they would be if the ACA were kept in place over the next year; if the ACA were fully repealed, premiums would increase by 50%. One of the main complaints from Republicans about Obamacare is the increase in premiums for 2017.
From the report (emphasis ours):
“The majority of that increase would stem from repealing the penalties associated with the individual mandate. Doing so would both reduce the number of people purchasing health insurance and change the mix of people with insurance – tending to cause smaller reductions in coverage among older and less healthy people with high health care costs and larger reductions among younger and healthier people with low health care costs. Thus, average healthcare costs among the people retaining coverage would be higher, and insurers would have to raise premiums in the non-group market to cover those higher costs.”
The CBO also projects that a partial repeal that keeps the popular provisions of the ACA would lead insurers to rapidly ditch the individual marketplace.
“After weighing the evidence from prior state-level reforms and input from experts and market participants, CBO and [the Joint Committee on Taxation] estimate that about half of the nation’s population lives in areas that would have no insurer participating in the non-group 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,” the report said.
Essentially, this would create what Republicans have called the “death spiral.” With no incentive from the individual mandate for younger and healthier Americans to stay in the insurance marketplace, the pool of people covered would become dominated by sicker people who need the coverage.
The increasing cost of covering these people would cause more and more insurers to ditch the individual marketplace, leaving fewer choices and even higher prices.
So far, enrollment in the individual marketplaces has increased every year since the law took effect, and the number of sign-ups recently set a record. So while the individual marketplace has faced problems, health officials have pushed back on the idea of a “death spiral” in terms of coverage.
While the concerns raised by the CBO may be addressed by a replacement plan through block subsidies and other proposals, the possibility of a repeal without a plan to replace would be a disaster for the individual marketplace, based on the CBO report.
Politicians on both sides of the aisle were quick to jump on the report. Democratic lawmakers used it to show that a repeal is dangerous, while Republicans dismissed the findings.
AshLee Strong, a spokesperson for House Speaker Paul Ryan, responded to the report in a statement: “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.”
House Majority Whip Rep. Steve Scalise tweeted that the CBO report “assumes no Obamacare replacement” and that the replacement would “provide people with coverage that they want and can actually use.”
On the other hand, Senate Minority Leader Chuck Schumer tweeted that the report showed the dangers of repealing the law.
“CBO report says premiums will skyrocket under GOP’s plan,” Schumer said. “Why are they raising costs and taking us from #CaretoChaos? #MakeAmericaSickAgain.”
House Minority Leader Nancy Pelosi also said in a statement that the CBO report showed that the ACA repeal “will be nothing less than a nightmare for the American people.”
“Republicans need to wake up to the brutal impact that repealing the ACA will have on the lives of their constituents,” Pelosi said. “Behind each of these statistics are stories of millions of Americans whose lives hang in the balance.”
Democratic Sen. Ron Wyden of Oregon tweeted that the report showed that the GOP’s repeal “means higher healthcare costs and less coverage.”