The cost of the AHCA | FRAY 007

14 million, 10%, $337B: Breaking down the numbers behind the AHCA.

image courtesy AP

Republicans divided over AHCA. Will disagreement stall Obamacare repeal?

Last Monday, we explored the basics of the AHCA. Later that day, the nonpartisan Congressional Budget Office (CBO) released their analysis of the bill. This week, we’re looking at what the CBO said will happen to coverage, premiums, and the deficit under the AHCA. Then we’ll walk through some of the responses to the CBO scoring.

The Facts:

On March 13, 2017, the nonpartisan CBO released their analysis of the AHCA (CBO). Highlights:

• In 2018, 14 million people would lose insurance coverage. By 2026, 10 million more would lose coverage, increasing the total uninsured to 52 million.
• Premiums would rise until 2020, then decrease from current rates by 10 percent, but changes to age rating would result in higher premiums for older people.
• Medicaid spending would decrease by $880 billion over the next decade, with 14 million fewer individuals enrolled.
• The federal deficit will drop by $337 billion in the next ten years, mostly due to cuts to Medicaid spending and eliminating subsidies (U.S. News and World Report).

Reactions to the CBO report varied:

• Speaker Paul Ryan, the leading voice in the AHCA proposal, praised the CBO report, saying it “exceeded [his] expectations” (Fox News). However, he conceded that the plan must change in order to pass the House (Washington Post).
• Health and Human Services Secretary Tom Price said the administration “strenuously disagrees” with the estimate that 14 million people will be without insurance in 2018 (C-SPAN).
• White House Budget Director Mick Mulvaney attacked the credibility of the CBO itself, saying their analyses are “deeply flawed” (CNN). White House CEO Gary Cohn joined, calling the report “meaningless.” He also promised that, contrary to the CBO report, every American with insurance coverage under Obamacare will continue to have access under the AHCA (Fox).
• Republicans continue to be divided on the AHCA, with the CBO report deepening the divide. House Budget Chairwoman Diane Black (R-Tenn.) called the AHCA “the conservative health care vision we’ve been talking about for years” (Fox News). But the conservative Freedom Caucus does not believe the bill goes far enough to fully repeal Obamacare. After the CBO report, more moderate Republicans are backing away from the plan fearing the loss of coverage for their constituents (FiveThirtyEight).
• While the bill is not yet in front of them, Senators have already voiced their concerns. Senator Ted Cruz (R-Texas) doesn’t believe the bill will pass in the Senate and proposes Congress return to the vetoed bill from 2015 to repeal and replace Obamacare (The Hill). Senator Rand Paul (R-Ky.) has spoken out against the bill since the beginning, calling it “Obamacare Lite” (Fox News).

Nevertheless, the bill is on the road to a full vote in the House:

• On March 16, the House Budget Committee passed the AHCA, 19–17, with three Republicans (all members of the Freedom Caucus) voting against it. Rules prohibited them from amending the bill, but they voted on resolutions asking for changes on the House floor (Washington Post, USA Today).
• Ryan wants the bill through the House Rules Committee early this week, setting it up for a vote on the House floor by mid-week, where it would need 216 votes to pass. House Majority Leader Kevin McCarthy says the House will also consider two smaller health care bills (CNN).

And that’s where we stand today. Now we ask our opinion writers: What do you make of the CBO score? Will Republican divisions over the approach to the replacement hamper efforts to repeal Obamacare?

CONSERVATIVE OPINION

by Oscar Silva

With regards to the AHCA cost estimate, the CBO offers this disclaimer: “the estimates in this report are uncertain.” I definitely agree. Assuming the report is accurate, though, it is a mixed bag. Before diving into specifics, it is important to note that, as a conservative, I am still not a fan of the AHCA. Personally, I would prefer that the federal government not be involved in the health insurance industry whatsoever.

The CBO claims that the AHCA would reduce the federal deficit by $337 billion. Anything that slows the bleeding in deficit spending (even if it is putting a cartoon-themed children’s bandage over a shotgun blast wound) is a good thing. Also, the report states that by next year the number of uninsured people would increase by 14 million. At face value, that might seem negative, but the report goes on to explain that “most of that increase would stem from repealing the penalties associated with the individual mandate.” In other words, people would be voluntarily choosing to drop insurance because they wouldn’t be penalized for doing so. And sometimes freedom is better just because it’s freedom.

The AHCA has the same problem as the ACA. Because both prohibit denial due to “preexisting conditions,” the health insurance industry remains, as the CBO puts it, “unstable.” This has caused conservatives to hypothesize that the ACA was built for failure to pave the way for nationalized health care, which has failed everywhere it has been tried.

Hopefully Sen. Tom Cotton (R-Ark.) is correct in saying this won’t pass the Senate, and the Republicans will simply repeal the ACA as they have promised.

PROGRESSIVE OPINION

by Alexis Cole

The nonpartisan CBO report confirms that the AHCA would be a disaster for health care. Over the next 10 years, the number of uninsured people would skyrocket to 52 million, nearly double the expected rate under Obamacare.

The CBO states that individual market insurance premiums will fall under the AHCA after 2020. This is not due to actual cost savings provided by the proposal. Instead, consumers will pay less money to receive fewer benefits (such as bare-bones, “catastrophic” plans). And older adults, who could be charged five times the rate of younger consumers, would be priced out of having insurance at all.

While the CBO report cites a $337 billion drop in the deficit, it’s because the AHCA turns its back on low-income individuals by gutting Medicaid. Fundamentally restructuring the Medicaid program, the crux of our healthcare safety net for over half a century, will drive up healthcare costs for everyone (through uncompensated care, explained in our first Healthcare Alert) and will take away care from 14 million of our most vulnerable citizens.

The CBO report caused the fault lines within the GOP to fracture. The conservative Freedom Caucus continues to oppose the bill for not repealing enough of Obamacare, but now moderate Republicans, fearing millions of their constituents would lose health care coverage, are pulling their support as well. While Speaker Ryan admits changes will be necessary, he’s still pushing the bill forward for a vote this week. Just 22 Republican nays will sink the bill and force the GOP back to the drawing board.

At FRAY, we do this twice a week, covering a new current event topic each Monday and Wednesday. Right now, every Monday issue covers the effort to repeal and replace Obamacare. If you’ve got questions about the AHCA, ask them here. Sign up below to get FRAY in your inbox bright and early.