CT Dems say CBO report shows GOP health plan should be scrapped
Washington – As soon as the Congressional Budget Office released its long-awaited report Monday afternoon on the impact of the GOP’s American Health Care Act, Connecticut Democrats joined party colleagues in saying the analysis proved the health plan should be scrapped.
The CBO estimated the American Health Care Act would result in 24 million Americans losing their health insurance, but would lower the budget deficit by $337 billion over 10 years, largely as a result of reduced federal payments to Medicaid, the joint federal-state health program for the poor.
“We now know that Washington Republicans’ plan will destroy America’s health care system to pay for huge tax breaks for people who are already rich,” said Sen. Chris Murphy, D-Conn. “You will get worse coverage even though you’ll be paying thousands more a year.”
Rep. Elizabeth Esty, D-5th District, said, “The CBO report makes it very plain: Passing this bill will harm millions of Americans.”
“It’s time for Congress to scrap this ill-considered proposal and get to work on a bipartisan plan to lower premiums, improve access to quality care, and lower the cost of prescription drugs,” she said.
After dismissing the importance or accuracy of the CBO scoring for days, a few Republicans found things to like in the CBO’s report.
“This report confirms that the American Health Care Act will lower premiums and improve access to quality, affordable care. CBO also finds that this legislation will provide massive tax relief, dramatically reduce the deficit, and make the most fundamental entitlement reform in more than a generation,” said House Speaker Paul Ryan, R-Wis.
Ryan also indicated the health bill would undergo changes in his “three-pronged approach.”
“It’s important to note that this report does not take into consideration additional steps Congress and the Trump administration are taking that will further lower costs and increase choices,” he said.
Because the Affordable Care Act’s mandate that nearly all Americans purchase health insurance would be scrapped, the GOP replacement would initially raise premiums for those who purchase insurance on the individual market.
In 2018 and 2019, according to CBO and JCT’s estimates, average premiums for single policyholders would be 15 percent to 20 percent higher than under current law as fewer comparatively healthy people sign up.
The American Health Care Act also would replace the ACA’s subsidies that help low- and moderate-income people purchase insurance with tax breaks that range from $2,000 a year for those under 30 to $4,000 for those 60 and over. The breaks would be phased out for individuals earning more than $75,000 a year.
The CBO said starting in 2020, the increase in average premiums from repealing the individual mandate penalties and a decrease in subsidies “would be more than offset by the combination of several factors that would decrease those premiums.” Those factors include the health care bill’s grants to states from the Patient and State Stability Fund, which the CBO said states probably would use states to limit the cost of enrollees with very high claims. The bill also eliminates requirements that plans provide comprehensive coverage and insurers spend at least 80 percent of revenues on medical costs.
The CBO said by 2026, the average premium for single policyholders would be roughly 10 percent lower than under the ACA.
“Even though the new tax credits would be structured differently from the current subsidies and would generally be less generous for those receiving subsidies under current law, the other changes would, in the [CBO’s] view, lower average premiums enough to attract a sufficient number of relatively healthy people to stabilize the market,” the CBO said.
But not everybody would get a break.
Under the legislation, insurers would be allowed to generally charge five times more for older enrollees than younger ones, rather than three times more as under current law, substantially reducing premiums for young adults and substantially raising premiums for older people.
“The facts are now clear, as these analyses confirm, that the shift will occur in the cost for the elderly, in essence what is an age tax, said Rep. John Larson. D-1st District. “This is confounding in light of the fact that the 400 wealthiest Americans will be receiving a tax cut.”
As far as people losing coverage, the CBO estimates that in 2018, 14 million more people would be uninsured under the new health bill than under the ACA. Most of that increase would stem from repealing the penalties associated with the individual mandate, and some people would forgo insurance in response to higher premiums.
Then, because the federal government would begin to cut its funding to states that expanded the Medicaid program under the ACA, the increase in the number of uninsured people would rise to 21 million in 2020 and then to 24 million in 2026, the CBO said.
Rep. Joe Courtney, D-2nd District, said the CBO report “clearly takes your breath away” because its projections of the number of uninsured are much higher than many predicted.
“It’s a big number,” Courtney said of the 24 million who would lose coverage. Another thing is how fast the numbers would rise. To me this is a gut-check moment on whether we are really going to do this.”
Rep. Rosa DeLauro, D-3rd– District, said, “Trumpcare is a disaster.”
“Not only will 14 million hardworking Americans lose health insurance starting next year, 24 million will lose health insurance over the next ten years,” she said. “The GOP bill will also send health care premiums sky high over the next two years by ‘inducing fewer comparatively healthy people to sign up.’ None of this news should come as a surprise. The GOP replacement plan will give huge tax cuts to the very wealthy, paid for with higher-priced insurance for older Americans and working Americans.”
Rep. Jim Himes, D-4th District, called the GOP plan “cruel” and said it “will cost lives.”
“President Trump and Speaker Ryan can now continue to pursue this deeply flawed and unpopular fever dream or they can take the reasonable path forward and work with Democrats to fix shortcomings in the Affordable Care Act, something they could and should have done years ago,” Himes said.
The American Health Insurance Act repeals a number of taxes imposed by the ACA, including a Medicare surtax on couples earning more than $250,000 a year and the elimination of a $500,000 cap on the deductability of executive compensation insurance companies can take.
“This plan is a windfall for the wealthy and an insult to Americans who would be forced to pay more for stripped-down coverage – if they’re able to access coverage at all,” said Sen. Richard Blumenthal. “This plan is dead on arrival, and I will do all that I can to ensure its defeat.
Connecticut is among 31 states and the District of Columbia that expanded Medicaid enrollment. Under the American Health Care Act, the state would be reimbursed for 90 percent of the cost of providing health care for those on the expanded program now, but that amount would be capped for new enrollees beginning in 2020. That cap would be based on the amount of money each state spent on an enrollee in 2016. Connecticut is among a handful of states that pay the most for each Medicaid patient.
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