A new analysis of the House Republican plan to repeal and replace the Affordable Care Act finds that 13 million people will lose healthcare coverage, premiums will rise, and out-of-pocket costs will go up sharply.
The report, released Tuesday afternoon, is from the chief actuary for the Department of Health and Human Services, formally called the Office of the Actuary in the Centers for Medicaid and Medicaid Services (CMS). The CMS oversees the health insurance exchanges created by the ACA.
The actuary's analysis finds fewer people will become uninsured, 13 million vs. 23 million people within 10 years, than the recent Congressional Budget Office analysis of the GOP's American Health Care Act, which was passed by the House of Representatives last month. The report comes as the Senate is working on its own legislation to replace the ACA.
But in other respects, the actuary report reached many similar conclusions as the CBO about what will happen if the AHCA becomes law.
Key Findings
The actuary's report determined that:
• Medicaid enrollees will take the biggest hit. Eight million of the 13 million expected to lose insurance in the next decade will be low-income Americans who are forced to drop out of Medicaid. The actuary attributes the drop to several factors, including the more frequent need to prove eligibility and loss of funding to states that expanded Medicaid to a larger group of people. The analysis concludes that most Medicaid enrollees who lose coverage under the AHCA will ultimately remain uninsured.
• Older people will pay a lot more. The AHCA allows insurers to charge older people up to five times more than younger people pay for individual policies. The report estimates that the number of people 50 to 59 with individual health insurance would drop by half in 10 years.
• Premiums will rise. By 2026, monthly premiums after subsidies will be 5 percent higher than they would otherwise have been. Younger, healthier people would generally have lower premiums but that would be offset by the steeper premiums older people face, according to the analysis.
• Out-of-pocket costs will be steeper. Americans will spend 61 percent more on out-of-pocket costs to pay for healthcare, including bigger deductibles, higher copays and co-insurance.
• People with employer insurance will also be affected. About 3.3 million fewer people will have employer insurance. About half of that group is expected to choose not to have health insurance because the AHCA eliminates a penalty imposed on most individuals who don't buy insurance coverage. Some employers would also no longer offer coverage to workers because employers would no longer be required to do so.
In total, the actuary report estimates that in 10 years, there will be 43 million uninsured Americans, up from 31 million if the ACA remains in place. According to the CBO, the number of people who are uninsured would reach 51 million in 10 years, compared with 28 million under the ACA.
The Office of the Actuary says its report differs because it uses some different assumptions than the CBO. For example, the CBO assumes that there will be additional states that expand Medicaid eligibility under the ACA, so the loss of Medicaid enrollees would be larger. The CMS actuary assumes there will be no additional expansion, so the number of people losing Medicaid coverage will be smaller.
The actuary also projects that fewer people in the individual insurance market, 8 million according to the CBO vs. 5 million fewer under CMS analysis, would drop coverage if the individual mandate is eliminated.
The actuary recognizes in its report that its projections don't capture all the possible fallout from the AHCA. That includes the impact of another provision of the American Health Care Act, which allows states to apply for waivers of some key ACA regulations. Waivers would enable states to do away with a requirement that insurers cover 10 essential health benefits, including mental health and maternity care and prescription drugs. Under waivers, states could also let insurers charge higher premiums to sicker people if their coverage has lapsed.
If those waivers are granted, "we would expect that the individual market in these areas would destabilize such that the premiums for comprehensive coverage for a significant portion of the population would be become unaffordable and the coverage would cease to be offered," according to the actuary report.
But even though the two studies rely upon different assumptions, "there's no question the AHCA increases the number of uninsured," says Larry Levitt, a senior vice president at the Kaiser Family Foundation, a nonpartisan nonprofit organization that analyzes health policy and healthcare issues.
Betsy Imholz, director of special projects for Consumers Union, the policy and mobilization arm of Consumer Reports, adds, "The estimates on the scope of harm may differ but the result is the same as CBO's: Many millions of Americans will lose insurance and billions of dollars in costs will be shifted to the states and individual households."
