The bipartisan Senate bill that would help to stabilize Obamacare is estimated to reduce the federal deficit by $3.8 billion from 2018 to 2027 but would not significantly reduce the number of people who are uninsured or affect the price of premiums, according to a report released Wednesday by the Congressional Budget Office and the Joint Committee on Taxation.
The bill, commonly known as Alexander-Murray because it was mainly drafted by Sen. Lamar Alexander, chairman of the Health, Education, Labor and Pensions Committee, and Sen. Patty Murray, the committee's top-ranking Democrat, would fund cost-sharing reduction subsidies for the rest of the year and for the next two years. It would allow states to make changes to Obamacare more quickly and would allow more people to buy "copper" plans, which have lower premiums and higher deductibles.
The cost-sharing reduction subsidies are already in the Congressional Budget Office baseline, even though President Trump ended them earlier this month. Therefore the $18 billion spent for 2018 and 2019 is assumed to be zero for the purposes of the analysis.
The Congressional Budget Office also assumed that the bill would not be enacted until after Nov. 1, when open enrollment begins. The legislation therefore would not have any effect on premiums because the rates would already be locked in, according to the report.
Though the Alexander-Murray bill provides for nearly $106 million in spending on outreach and advertising so customers know about Obamacare, CBO did not have an estimate about whether the funds would encourage people to sign up, other than to note they "could increase enrollment," including from healthier customers, which would also help to reduce costs overall in subsequent years.
The agencies, however, said that because they did not have a way to compare the activities under the current law they couldn't release an estimate.
Alexander seized on the report in comments on the Senate floor.
"Our proposal benefits taxpayers, benefits consumers, not the insurance companies," he said. "The CBO says it does not bail out insurance companies. It does benefit consumers, taxpayers to the tune of $3.8 billion."
A previous analysis by CBO found that if the subsidies were not paid, they would increase the deficit by $194 billion over a decade and that premiums would rise by an average of 20 percent.
The cost-sharing funds had been authorized by the Obama administration, resulting in a lawsuit by the House, which said they were illegal because they had not been appropriated by Congress. A federal judge sided with the House, though the case was on appeal and the funds continued to be authorized by the executive branch even under President Trump.
Trump ended the payments this month, saying publicly that he wanted Congress to arrive at a deal on healthcare. The Alexander-Murray bill appears to have the support it needs in the Senate, but not from the White House or the House. Other Senate and House leaders also introduced a competing bill, and a judge may rule as early as Wednesday that the insurer payments must continue.