The White House and Republican leaders knew that the Congressional Budget Office’s analysis of their American Health Care Act wasn’t going to be helpful. They’d laid the groundwork for rejecting the CBO numbers well in advance, with press secretary Sean Spicer disparaging the CBO’s prior estimates last week, and a slew of administration and House officials appeared on the Sunday talk shows to set expectations for viewers.
It’s unlikely, though, that they understood just how badly the report released Monday would undercut their core arguments for reform.
The argument: Obamacare is about to implode. President Trump has repeatedly claimed that the Affordable Care Act is about to collapse, even claiming last week that it was designed to “explode” in 2017, because Barack Obama would be out of office. (This is, of course, ridiculous; Obama sees the legislation as integral to his legacy.) Other Republicans have offered more measured predictions of doom. Last year, House Speaker Paul D. Ryan (R-Wis.) predicted that the system was “entering a death spiral” as premiums rose, and people dropped out of the individual marketplace for insurance.
The CBO’s response: It isn’t. The CBO’s analysis addressed Ryan’s phrasing specifically.
“Decisions about offering and purchasing health insurance depend on the stability of the health insurance market — that is, on having insurers participating in most areas of the country and on the likelihood of premiums’ not rising in an unsustainable spiral,” it reads. The way the Affordable Care Act (Obamacare’s formal name) is set up, in the CBO’s estimation, “subsidies to purchase coverage combined with the penalties paid by uninsured people stemming from the individual mandate are anticipated to cause sufficient demand for insurance by people with low health care expenditures for the market to be stable.”
In other words, while the CBO doesn’t claim that the current system is flawless, it also thinks that the Obamacare structure will be stable.
The argument: The number of people lacking coverage will not increase, or may decrease. Secretary of Health and Human Services Tom Price told NBC’s Chuck Todd on Sunday that his vision of success was “more people covered than are covered right now at an average cost that is less. I believe that we can firmly do that with the plan that we’ve laid out there.”
Trump repeatedly assured voters on the campaign trail that he’d preserve existing coverage, telling The Washington Post in January that his goal was “insurance for everybody.” The Republican website promoting the bill states flatly that millions of Americans won’t lose their insurance.
The CBO’s response: 24 million fewer people will have coverage by 2026 if the AHCA is passed. This was the most obvious takeaway from the report — and the one that Republicans clearly expected. Over the next decade, millions fewer people would have coverage under Medicaid, through an employer or purchased individually than if the Affordable Care Act were kept in place.
The argument: The cost of coverage will decrease, allowing more people to enroll. Ryan’s argument has consistently been that the Republican plan will substitute mandated insurance with more broadly affordable insurance — which people could purchase or not as they saw fit.
“It’s not our job to make people do something that they don’t want to do,” he told CBS’s John Dickerson on Sunday. “It is our job to have a system where people can get universal access to affordable coverage if they choose to do so or not.”
The CBO’s response: Coverage will become cheaper down the road in part because older Americans give up on buying insurance. The immediate effects of the passage of the AHCA, in the CBO’s estimation, would be that premiums on the individual market would increase, because the repeal of the individual mandate means that healthier people would be more likely to opt out, leaving more less-healthy people in the pool of those insured.
Because the AHCA establishes age-based tiers that the CBO estimates would kick in by 2019, those less-healthy people would heavily skew toward older Americans. The result for them? A big spike in their health-care costs — and, as a result, more of them would choose to forego coverage, driving the cost back down.
The argument: The Trump White House won’t reduce Medicaid. Trump repeatedly insisted on the campaign trail that he would preserve Medicaid spending, including using the subject as a point of leverage against his primary opponents.
The CBO’s response: Medicaid spending will drop by $880 billion. The CBO report’s main redeeming point for Republicans is that it projects $935 billion in deficit reduction over the next 10 years from insurance coverage changes. Unfortunately for the White House, though, more than half of the net savings would come from that drop in Medicaid spending. (Overall, the CBO estimates that the AHCA would reduce spending by $1.6 trillion but add new spending of about $700 billion from insurance coverage. Overall, the net savings would be about $337 billion.)
That net reduction is the peg on which the AHCA hangs. It’s the primary point on which the CBO’s analysis works to the AHCA proponents’ advantage: If your main worry is reducing spending, the CBO report estimates that this will happen.
If your argument is one of the others offered above, though, the CBO report was probably not terribly helpful.