On March 13, 2017, the Congressional Budget Office (CBO) released estimates on the impact of the proposed American Health Care Act (AHCA). The CBO indicates that AHCA would increase the number of persons without health coverage by 24 million persons in 2026: 52 million persons without coverage in 2026, as compared to 28 million persons in 2026 under the Affordable Care Act (ACA).
The CBO also predicts that AHCA would reduce the federal deficit. Although AHCA would eliminate various federal revenue streams established under the ACA, AHCA would cut the federal deficit by a net $337 billion (about $34 billion per year) through 2026, according to the CBO. CBO estimates that federal deficit reduction would occur despite the loss in revenues mainly as a result of two factors: AHCA’s $880 billion in reductions in Medicaid federal financial participation (FFP) for state Medicaid agencies through 2026; and AHCA’s $673 billion elimination of federal subsidies through 2026 for low-income persons lacking other sources of coverage. Income-related subsidies now offered through the health insurance Exchanges created by the ACA would be replaced by AHCA with refundable tax credits calculated mainly on the basis of the taxpayer’s age. AHCA would provide higher tax credits for older recipients than younger recipients, although the tax credits would be subject to income ceilings.
CBO estimates that AHCA would drive premiums in the non-group health insurance market about 15 – 20 percent higher in 2018-2019 than under the ACA, mainly because fewer young and comparatively healthy persons would voluntarily sign up for coverage under AHCA, in the absence of the ACA’s income-related subsidies and its tax penalties for failing to obtain health coverage. But CBO estimates that a new Patient and State Stability Fund created by AHCA would stabilize premiums for 2020-2026.
Additional information on the CBO estimates is available here.
[…] Continue reading about the CBO’s analysis here. […]