The Republican plan to repeal and replace Obamacare would result in 14 million more people without health coverage next year but reduce federal spending by $337 billion compared to current law, according to an estimate Monday from Congress' official scorekeeper.
About 24 million people would lose coverage over the next decade under the American Health Care Act, the Congressional Budget Office said Monday. But the plan would reduce taxes by $883 billion over the next decade.
The highly anticipated estimate holds major bearing on the task before President Trump and Republican House leaders, who are trying to sell their plan to roll back the Affordable Care Act's Medicaid expansion, revamp the way subsidies are given to people for buying private coverage and ditch the law's taxes.
The CBO analysis is "not believable" and the agency "simply has it wrong," said Health and Human Services Secretary Tom Price.
Most of the coverage loss would come from reductions in the Medicaid expansion and in private insurance, CBO said in its highly anticipated estimates.
CBO also estimated that about two million fewer people would enroll in employer-sponsored insurance coverage in 2020, a number set to grow to about seven million in 2026.
Part of the reason is that "fewer employees would take up the offer of such coverage in the absence of the individual mandate penalties."
CBO also estimates that over time fewer employers would offer coverage. Under Obamacare, any employer with 50 or more full-time workers is required to offer coverage.
Another contributing factor to the uninsured numbers was the surcharge for people that don't have continuous coverage. The AHCA includes a surcharge of 30 percent for people whose coverage lapses for more than 63 days.
The goal is to stabilize risk pools to help offset the costs for insurers that have to cover people with pricey pre-existing conditions.
However, CBO said that in most years after 2018, about 2 million fewer people would buy insurance because they would have to pay the surcharge or provide documents about their previous health coverage.
"The people deterred from purchasing coverage would tend to be healthier than those who would not be deterred and would be willing to pay the surcharge," the CBO said.
Republicans have had an inkling that coverage would likely decline under their bill and have been touting access to cheaper insurance via lower premiums than Obamacare.
The CBO shed light on the extent of those discounts.
Premiums would rise 15 to 20 percent in the individual market in 2018 and 2019 compared to Obamacare. However, over the next decade premiums would drop by 10 percent. The reason for the short-term spike is "the individual mandate penalties would be eliminated, inducing fewer comparatively healthy people to sign up," CBO said.
However, by 2026 average premiums would be about 10 percent lower than under Obamacare, CBO added.
It noted that the premiums would differ greatly depending on age.
That is likely because the bill would raise the rate that insurers can charge older individuals, increasing it from three times the premium of a younger person to five times.
Under the budget reconciliation process Republicans are using to repeal the law, their measure needed to save the federal budget at least $2 billion over a decade.
Republicans have been advancing the legislation through the committee process. The House Budget Committee is expected to mark up the legislation this week.
The Affordable Care Act led to about 20 million more Americans getting health coverage, about half getting it through Medicaid and half through private marketplaces, but about 29 million people remain uninsure
The estimates could make life difficult for congressional Republicans, who are under fire from outside groups for supporting the bill. The organization Save My Care has targeted vulnerable House Republicans with ad campaigns highlighting the potential loss of coverage in their districts.
The CBO numbers also could have an impact in the Senate, as moderate GOP senators are wary about people in their states losing coverage from the end of the Medicaid expansion. Concerns from those senators led the GOP leadership to keep the expansion in place until 2020 — which conservatives are balking at.
Republicans, who have 52 seats in the Senate, can afford to lose only two senators as Vice President Mike Pence can break any ties. Democrats are expected to unanimously oppose it.
Two GOP senators, Lisa Murkowski of Alaska and Susan Collins of Maine, are upset about the legislation's provisions to defund Planned Parenthood. Sen. Tom Cotton, R-Ark., has said the process to pass the bill needs to slow down.
Further complicating efforts is that the CBO also confirmed that states would have to shoulder more Medicaid costs after the expansion ends in 2020 and the federal government begins providing funds on a per-enrollee basis.
States have to decide whether they want to restrict Medicaid eligibility for enrollment, cut services or cut payments to providers and health plans, the agency said.
CBO anticipates that states "would adopt a mix of those approaches, which would result in additional savings to the federal government."
Democrats quickly pounced on the CBO estimates.
"This report also reaffirms that the Republican plan does absolutely nothing to control costs or protect consumers," said Reps. Frank Pallone, D-N.J., and Richard Neal, D-Mass. Pallone is the top Democrat on the House Energy and Commerce Committee and Neal the House Ways and Means Committee.
Republicans sought to play up the estimate's deficit-reduction numbers while downplaying the insurance coverage score.
"Today, the CBO confirmed that the American Health Care Act will help lower costs, increase choices, and expand access to health care for millions of individuals and families. Our fiscally responsible reforms will lower premiums over the long term and deliver much-need relief from Obamacare's crushing taxes and mandates. CBO also confirmed our legislation protects taxpayers, decreasing the ballooning deficit by more than $330 billion and curbing growing health care costs," said House Ways and Means Chairman Kevin Brady
"It's not surprising that the CBO coverage estimates released today are different than Obamacare's coverage estimates. The American Health Care Act is a dramatic departure from Obamacare, which forced Americans to buy expensive, one-size-fits-all health insurance. Our legislation gives individuals and families the freedom to access health care options that are tailored to their needs—not Washington's," he said.
Rep. Pete Roskam, R-Ill., said on Fox News soon after the estimate that the CBO was wrong on Obamacare's estimates, a talking point floated by White House press secretary Sean Spicer earlier Monday.
CBO originally estimated that about 21 million people would get insurance in Obamacare's exchanges but revised it later to 10 million.
The Energy and Commerce and Ways and Means committees held marathon sessions last week to mark up separate parts of the bill. Now the House Budget Committee is scheduled to combine the two pieces of legislation into one package Wednesday. From there, it will head to the House Rules Committee and then the House floor.
Republicans hope to pass the plan before the Senate's Easter recess starts early next month.