Providers’ AHCA worries rise after latest CBO analysis
The Congressional Budget Office’s latest analysis of the American Health Care Act further stoked provider concerns about the legislation’s potential impact on access and coverage and the overall effect on the healthcare industry.
In its highly anticipated scoring of the bill, the nonpartisan CBO estimated that 14 million people would lose coverage next year, growing to 23 million by 2026. If those numbers come to fruition, the total number of uninsured Americans would hit 51 million over the next decade. Based on current population growth projections from the U.S. Census Bureau, that would essentially return the uninsured rate for the non-elderly to just below pre-Affordable Care Act levels, at about 15%. The uninsured rate hovered around 16% for the decade preceding ACA implementation, according to the Kaiser Family Foundation.
Most of the anticipated coverage declines would come from ending the federal government’s enhanced Medicaid match in 2020. In its place, the bill would establish a per capita cap based on 2016 spending figures. After that, the cap would be tied to the Consumer Price Index for medical care. States that wanted to continue their Medicaid expansion would be on the hook for making up the difference. Overall, federal spending on Medicaid would drop by $834 billion by 2026.
It’s hard to know exactly how that will play out for patients and providers, but the picture isn’t pretty. Take Georgia, where combined state and federal spending on Medicaid is about $4,000 a person, ranking the state 48th in the country. “There’s a reason why we’re 48th, put it that way,” Grady Health System CEO John Haupert said of the state’s willingness to spend on medical care for the poor. “You would have to look at every channel Medicaid flows through. Long-term care. Outpatient—what will be
covered? What won’t? It has to come from somewhere.”
The CBO also found that the AHCA would reduce the federal deficit by $119 billion by 2026, $32 billion less than an earlier version of the bill.
The savings—critical to the Republicans’ strategy to pass the bill in the Senate through budget reconciliation—are lower because states seeking waivers to change their insurance programs would receive some funding to help customers who would be faced with higher costs. The waivers would allow states to free insurers up from covering 10 essential benefits mandated by the ACA.
The report outlined three scenarios that states would be likely to follow:
Don’t apply for waivers regarding essential benefits and community rating.
Apply for waivers, but don’t allow insurers to charge sick people if their coverage lapses.
Apply for waivers and return to medical underwriting.
Premiums would fall 10% to 30% in the second group, but those savings would come from dropping essential benefits coverage. People with pre-existing conditions would no longer be protected, something Republicans promised would not happen.
In the third group of states, “people who are less healthy (including those with pre-existing 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 report said. “As a result, the nongroup markets in those states would become unstable for people with higher-than-average expected health care costs.”
Any funding set aside for high-risk pools would not be enough to cover the estimated 1 in 6 people who would live in states in the third group.
Dr. Nick Turkal, CEO of Aurora Health Care, a 15-hospital system based in Milwaukee, is concerned the loss of coverage would drive patients to the emergency department rather than getting the care in preventive and primary-care services.
“That’s not an efficient way of getting care,” he said.
Simultaneous to release of the CBO report, the nonpartisan Joint Committee on Taxation issued its assessment of the bill’s impact on federal revenue. The AHCA’s repeal or delay of many taxing programs in the ACA would slash federal revenue by $662.6 billion from 2017 through 2026, the committee found.
The two reports did little to elevate the stature of the House bill, which is already facing an uphill battle in the Sen- ate. Sen. Lamar Alexander (R-Tenn.), chairman of the Health, Education, Labor and Pensions Committee, in a statement reiterated that the Senate is committed to writing its own bill. In a speech on the Senate floor, Finance Committee Chairman Orin Hatch (R-Utah) said lawmakers need to be “realistic about the limitations” of what can be achieved and “be willing to practice the art of the doable.”