Anyone who has studied America’s health-care system in even passing detail knows how complicated it is. The Congressional Budget Office’s analysis of the American Health Care Act, the Republican overhaul of the Affordable Care Act that passed the House earlier this month, attempts to anticipate how that complex system will be affected if the AHCA’s amendments to it go into effect. The big picture answer is that 23 million fewer people will have insurance coverage by 2026 if the AHCA is enacted than if the ACA — Obamacare — were left in place.
But what does that mean to most Americans? The CBO helpfully broke down how much insurance premiums would cost for people at two income levels — $26,500 and $68,200 annually — at three ages. The upshot is that people making $68,200 a year who are in the two younger ages (21 and 40) will pay less in premiums annually because they will get a tax credit not available to people at their income level under Obamacare. But for older and poorer Americans, the effect will mostly be worse.
Under the AHCA, states would be able to apply for waivers that allowed insurers to sell policies that excluded certain benefits that people might not want to pay for. That change could mean lower-cost premiums for some people in those states, but, particularly for lower-income Americans, the increase in annual costs under the AHCA would still be substantial. (The width of the bright red bar is the amount Americans would pay out of pocket for health care.)
That effect is largest among older Americans making $26,500 a year. They’d end up paying 9.4 times as much a year in a nonwaiver state and eight times as much in a waiver state. More importantly, their insurance premium costs would eat up more than half of their income, even after the tax credit meant to offset the cost.
In addition, millions of Americans who receive coverage under Medicaid would lose that coverage thanks to a rollback of federal spending on the program. The 14 million Americans who would have been covered under Medicaid in 2026 under Obamacare will instead have to pay the out-of-pocket costs in the chart above — and most of those people are at the lower end of the income spectrum.
Again, this is all in the abstract. Specific patients would be affected in different ways. States could also get waivers allowing for those with preexisting conditions to see higher premium costs. The effect? “[P]eople who are less healthy (including those with preexisting or newly acquired medical conditions) would ultimately be unable to purchase comprehensive nongroup health insurance at premiums comparable to those under current law, if they could purchase it at all,” the CBO writes.
Donald Trump’s campaign-trail promise was broader coverage at lower costs. The CBO’s analysis suggests that the AHCA is not a vehicle to achieve that outcome.