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CBO Finds Obamacare Repeal Would Leave 18M Without Coverage; Premiums to Soar

Mary Caffrey
The report finds that the House resolution would create an increasingly unstable insurance market, and that fewer insurers would participate.
A new report from the Congressional Budget Office finds that repealing the Affordable Care Act (ACA) would cost 18 million Americans their health coverage in the first year, and premiums would rise 20% to 25% for those buying coverage in the individual market.

The report, released after a weekend of protests following votes in the House and Senate to set repeal in motion, also finds the number who would ultimately lose coverage would rise to 32 million by 2026, as Medicaid expansion ends. A total of 59 million people under age 65—more than twice the current number—would be uninsured after a decade, comprising 21% of the population too young for Medicare.

Under the ACA, the overall uninsured rate has dropped to 8.6%, with even lower uninsured rates for children.

Most of all, the report says, a repeal would bring uncertainty to the rest of the market, so that even those currently unaffected by the ACA would feel the effects of its demise. “The ways in which individuals, employers, states, insurers, doctors, hospitals and other parties would respond … are all difficult to predict, so the estimates in this report are uncertain,” it states.

Hospitals, in particular, have braced for repeal of the ACA, or “Obamacare,” because some in Medicaid expansions states have seen their finances improve for the first time in decades. There’s great concern about hospital finances because of the way ACA shifted large sums from direct payments for uncompensated care to the billings from newly insured. If those patients now return to the ranks of uninsured, hospitals wonder what who will pay to care for them. A December report from the American Hospital Association find hospitals could suffer a net loss of $165.8 billion if there is a repeal with no replacement.

The CBO report released Tuesday notes that the House resolution leaves in place a number of market reforms, and requires insurers to: 1) provide specific benefits and amounts of coverage; 2) not deny coverage, limit coverage, or adjust premiums based on a person’s preexisting conditions; and 3) adjust premiums only for age, geographic location, and tobacco use.

But without the penalties of the individual mandate to keep younger, healthier people in the market, the House resolution “would destabilize the nongroup market, and the effect would worse over time,” the report finds.

The early effects of repeal, the report finds, will stem from the end of penalties for those who decline to buy coverage. Because insurers will have set their premiums for the year, it would take time for the full effects of a repeal to be felt. But through the first year, the CBO estimates that 10 million fewer people will buy coverage on the individual market, 5 million will lose coverage under Medicaid, and 3 million people will have coverage through employers.

Losing the individual mandate would also cause premiums to rise, because this will “reduce the number of people purchasing health insurance and change the mix of people with insurance,” the report states. Most of the people leaving the market would be young. The CBO foresees fewer insurers taking part in the individual market, and those left would raise premiums to adjust for the new enrollment mix.

Ending Medicaid expansion would drive up the number of uninsured by 27 million after the first year, and by 32 million through the next decade—due to 23 million fewer people with coverage in the nongroup market and 19 million fewer with Medicaid coverage, offset by 11 million who would have coverage through their employers.

By the CBO’s estimate, “59 million people under age 65 would be uninsured by 2026,” compared with 28 million under the current law.

As enrollment drops and costs rise among those still covered, “premiums in the nongroup market would be 50% higher in the first year after the marketplace subsidies were eliminated—relative to projections under current law—and would double by 2026.”

 
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