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CBO Scores ACA Replacement, Senate Proposes Own Bill

Posted: July 21, 2017 by Staff Writer

The long-awaited estimate on the costs and impact of the Republican-led U.S. House of Representatives proposal to replace the Affordable Care Act (ACA) has been released. The Congressional Budget Office (CBO) projects the American Health Care Act (AHCA), if enacted as proposed, would result in 23 million more Americans without health insurance in 2026.

In its “scoring” of the AHCA, the nonpartisan CBO assessment predicts the deficit would fall and premiums would decline for some Americans purchasing health coverage. The new deficit reduction projection is $119 billion over 10 years (as compared to an early estimate of $337 billion savings over the same period).

The largest savings would come from an $834 billion cut in Medicaid, which serves low-income Americans. An additional $276 billion would come from reduced subsidies for health insurance purchased through Healthcare.gov and the state exchanges.

 

House Rules Held Up Senate Review

Budget rules held up the House bill from moving onto the U.S. Senate until June. The AHCA was introduced under a budget reconciliation measure, which would allow for a simple majority vote when it reached the Senate. However, instead of taking up the House measure as drafted, the Senate opted to develop its own proposal, which differs in some major ways from the GOP House bill. On Thursday, June 22, a “discussion draft” of the Better Care Reconciliation Act of 2017 was released by Senate Majority Leader Mitch McConnell.

 

Proposal Alter Tax Credits and Penalties

The proposed Senate bill would change the existing ACA tax credits that help people buy individual health insurance. Instead of using a limit of 400 percent of the Federal Poverty Level (FPL), the tax credits would be available to those with incomes up to 350 percent of the FPL. The penalties for employers under the ACA employer mandate and the penalty for all Americans for not purchasing health insurance would both be repealed under the proposed Senate bill.

 

What’s Ahead?

If the Senate health care reform measure is approved by full Senate, it would have to go back to the House of Representatives for review and a final vote. However, approval in the Senate is far from assured.

Democrats are unified in opposition to repeal of the ACA and the GOP has only a two-seat edge in the chamber. Since more than a half-dozen Republicans have expressed concerns over different parts of the bill, it’s anyone guess what could happen next. The White House and Republican leaders would like to see an agreement on a final measure no later than the end of July, which would enable them to move on to other priorities, such as tax reform.

On July 18, after four senators voiced opposition to the Senate Bill moving forward, Sen. McConnell announced plans for a “repeal only” measure (with a replacement to come later). However, there was immediate pushback that could delay any immediate action.

 

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