An Obamacare overhaul bill would reduce the federal spending by $133 billion over the next decade, according to a score from the Congressional Budget Office and Joint Committee on Taxation released Monday.
The report also found, however, that millions of people could lose comprehensive health insurance that covers high-cost medical events over the same period. “That number could vary widely depending on how states implemented the legislation, although the direction of the effect is clear,” CBO said.
The score does not include information about some of the legislation’s most recent changes, and the scorekeeping agencies said they would need several weeks to estimate what the effect of the legislation on the deficit, health insurance coverage and premiums.
The bill, known as Graham-Cassidy, was introduced by Republican Sens. Lindsey Graham of South Carolina, Bill Cassidy of Louisiana, Dean Heller of Nevada, and Ron Johnson of Wisconsin. It would divert $1.2 trillion in revenue from Obamacare to states to craft their own healthcare systems and would give them funding through block grants. The funds would be distributed from 2020 to 2026 and would need to be re-authorized by Congress.
CBO determined that the number of uninsured would rise because of reductions in funding for the Medicaid program, which covers low-income people, and because some states would do away with the current Obamacare model in which federal subsidies help people pay for private coverage. Federal spending on Medicaid would be reduced by about $1 trillion from 2017 to 2026 under the bill, and millions fewer would be covered, largely those who became eligible after Obamacare’s Medicaid expansion.
Many of the outcomes hinge on what states would choose to do with their Medicaid programs. Graham-Cassidy would change Medicaid from a program in which federal dollars are matched each year to one that caps the amount per person or per state. As a result of the change, states likely would receive fewer federal dollars for the program and may decide to raise their taxes to make up the difference. The CBO report did not say to what extent this changewould increase the number of uninsured, noting that some people may be moved to private coverage, although others might either find it too difficult to be eligible for Medicaid or lapse in paying for private plans.
The repeal of the individual mandate, which requires people to buy insurance or pay a fine, also would contribute to reduced enrollment in health insurance coverage, CBO concluded.
The agency did not release precise numbers but said the state programs would offset some of the uninsurance rates by creating programs that “would probably cover people with characteristics similar to those of people made eligible for Medicaid” by Obamacare, meaning low-income people.
Some of the options for states to set up their own programs include the creation of high-risk pools, which pay for expensive medical claims, providing payments directly to health providers or creating reinsurance programs, among other options.
The latest version of the Graham-Cassidy legislation makes changes to the provisions for pre-existing illnesses and provides more funding to states whose senators are on the fence about the bill or have said they oppose it.
Senate Majority Leader Mitch McConnell said last week that he expects to bring the bill to the floor for a vote this week, but the Republican caucus is meeting Tuesday over lunch to discuss the next move. At least three GOP senators have come out against the bill, likely dooming its passage.
