STATEMENT: PBPC On the CBO Report for the Senate Health Care Bill

Marc Stier |

Marc Stier, Director of the PA Budget and Policy Center, made the following statement following today’s release of the Congressional Budget Office (CBO) report on the U.S. Senate GOP Health Care Bill (Better Care Reconciliation Act of 2017)

It’s official — the Senate health care bill is not an improvement but actually worse for Americans than the House bill. The CBO analysis released today holds that 22 million fewer Americans will be insured in 2026 as a result of the Better Care Reconciliation Act. That is slightly better than the House bill.

But, as the CBO itself hints, it’s ten-year analysis of the bill does not take into account the drastic change the Senate bill makes to the Medicaid program in 2025. This plan, proposed by Senator Toomey, reduces the index by which per capita caps go up each year from the medical inflation rate (CPI-M, which is projected by the CBO to be 3.7%) or medical inflation rate plus 1% for the elderly and disabled in 2020 to 2025 to the standard inflation rate (CPI-U), which is projected by the CBO to be 2.4% per year in the years after. That change, by itself, will reduce Medicaid reimbursements to the states by hundreds of billions over ten years. It will cost Pennsylvania roughly an additional $34 Billion in federal funds the ten years between 2026 and 2036, or $3.4 billion per year, effectively crippling the state’s Medicaid program and resulting in additional sharp losses in the number of insured.

So, after taking into account the impact of Senator Toomey’s proposal for Medicaid funding, the Senate bill will actually result in higher reductions in the number of insured Americans than either of the House bills. What’s more, the Senate bill does almost nothing to fix the impact of the House bills on the costs of premiums for people who purchase insurance on the exchanges. After taking into account the impact of reductions in the ACA’s tax credits and the elimination of the ACA’s cost sharing provision, individuals and families who purchase insurance on the exchanges, and especially who are older or have low incomes, will be no better off under the Senate bill than the House bill.

Finally, the Senate bill is a threat to all those who purchase insurance in the individual market or secure it through their employer. By allowing states to opt-out of the essential benefits requirement, the legislation will allow insurance companies to offer insurance that does not cover pre-existing conditions or that have annual or lifetime limits. And, because of a quirk in the law, companies that operate across state lines will be able to offer insurance that is inadequate all across the country if only one state in which they operate opts-out of the essential benefits requirement. If any one state that a company operates in opts out of essential health benefits, that company can deny essential health benefits to any of its employees residing in any state.

In sum, the CBO analysis of the Better Health Reconciliation bill shows that is a clear and present danger to tens of millions of Americans, and over one million Pennsylvanians, who will lose insurance and two million more Pennsylvanians who will again fear that it is impossible to secure insurance that covers their pre-existing medical conditions.

It is simply astonishing that a government in a democratic country could even be considering legislation that so harms its own citizens.