This post has been updated.
Congress’s nonpartisan budget referees on Monday provides the first detailed study of the real-world effects of Republicans’ bill to overhaul health care. The GOP bill, the Congressional Budget Office found, would repeal hundreds of billions of dollars in taxes, especially on industry and wealthy households. It would make deep cuts into Medicaid and provide smaller subsidies to people looking to buy health insurance. And after eight years, 24 million more people would be uninsured as a result of the bill.
There are a few urgent questions that the CBO report does not address, however. Here’s a look at what we still don’t know.
The yardstick for judging the Republican plan is how their system would compare to the one that Democrats enacted through the Affordable Care Act, also known as Obamacare. Leading Republicans have long insisted that Obamacare is collapsing.
“It’s imploding as we sit,” President Trump said in January. “I said this two years ago: ’17 is going to be the bad year. It’s going to be catastrophic.”
The CBO report contradicts those claims, stating that the individual market for health insurance is stable under current law, but provides little new detail on the system as it exists today.
The agency’s analysts estimated that 14 million more people would be uninsured under the Republican plan than in the current system next year, a discrepancy that would increase with time. That calculation, however, is based on the agency’s forecasts for Obamacare from a year ago, which some conservative experts on health care argue are overly optimistic.
For instance, last year’s CBO projection envisions 19 million people buying insurance through the exchanges established under Obamacare by 2019. The current figure is only about 12 million, and many in the industry believe the old CBO projection is unrealistic.
Indeed, the most recent CBO forecast from January predicts that the number of Americans who enroll through the exchanges will plateau at about 13 million. The agency did not use that new forecast, however. According to the report, the analysts and Republican lawmakers decided to use the older projection, which was the basis for the GOP bill. How that new data might affect the analysis overall remains to be seen.
Another familiar complaint from Republicans is that Obamacare is holding back hiring. GOP politicians have argued that the taxes the law imposes on the wealthy discourage rich Americans from investing in the economy, and that the requirement that employers with at least 50 full-time employees provide insurance for their workers.
A CBO report three years ago projected that about 2.5 million fewer Americans would be working in 2024 as a result of Obamacare. By helping people buy insurance on their own, according to the CBO report, Obamacare would give workers who only hold down a job for the benefits a way out of the labor force. The agency’s analysts also wrote that the law would discourage people from trying to earn more because they would qualify for less-generous subsidies.
In that document, the CBO staff was skeptical of the idea that requiring employers to provide health insurance would discourage businesses from expanding.
“There is no compelling evidence that part-time employment has increased as a result of the ACA,” the office concluded, using the formal abbreviation for Obamacare.
The analysis published this week does not include new forecasts for the labor market. It is still unclear whether the CBO projection for how Obamacare affects workers has changed, or whether the agency's staff thinks that the legislation proposed by Republicans would push more Americans into the labor force.
3. The economy
In fact, the CBO analysis does not contain any projections for how the Republican plan to repeal Obamacare would affect the economy overall.
Republicans have promised that their plan would have economic benefits. The bill offers “relief from hundreds of billions of dollars in health care taxes that have crushed our workers and job creators,” said Rep. Kevin Brady (R-Tex.), the chairman of the Ways and Means Committee in the House, said in a statement last week.
The CBO report does not include any analysis of whether the plan would help or hinder the economy. For instance, there are no figures on inflation, interest rates or the gross domestic product.
When Republicans took control of Congress in 2014, they instructed the CBO staff to begin taking into account the broader economic effects of major legislation on the economy in estimating the cost of bills, a practice known as “dynamic scoring.”
In this case, the agency left out the dynamic score, citing the rapid pace at which Republicans are moving the bill through Congress. “Because of the very short time available to prepare this cost estimate, quantifying and incorporating those macroeconomic effects have not been practicable,” the report’s authors wrote.
Another question the CBO report does not answer is how the Republican plan would affect Americans with different levels of income.
The agency does not always include that kind of detailed information in its reports — the main responsibility of the office, after all, is simply to figure out how much legislation will cost the federal government. All the same, the different ways that the GOP bill will affect the rich, the poor and the middle class financially are likely to be crucial to the debate.
The Republican bill would repeal taxes imposed on wealthy households under Obamacare, including a surcharge of 0.9 percent on salaries and a fee of 3.8 percent on income from investments, such as rents, royalties, dividends and capital gains.
At the same time, the bill would reduce funding available for Medicaid, the federal program that provides health insurance to the poor, and the new tax credits available to help middle-class households buy insurance would be more favorable to the affluent compared the subsidies available under Obamacare.
“It will be the biggest transfer of wealth from low-middle income people to wealthy people in our country,” Rep. Nancy Pelosi (D-Calif.) predicted last week on “CBS This Morning.”
This post has been updated to include the Congressional Budget Office's most recent forecast for enrollment through the exchanges established by the Affordable Care Act.