The Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) released their completed report on the Senate’s highly anticipated “Better Care Reconciliation Act” (BCRA) earlier today. In general, the major provisions of this bill are:
- Elimination of the individual and employer mandates
- 3-year phasing out of Medicaid expansion in 2021 and a general cut to Medicaid (which covers 1 in 5 Americans and probably a lot more than you think)
- Basing premium taxes on age, income, and geography (like Obamacare and unlike the AHCA’s age-based income tax)
- Tax cuts for the wealthy by repealing Obamacare tax increases
- Allowing states to apply for a waiver that permits insurance companies to deny their enrollees essential benefits, some of the most fundamental services to healthcare
- Ending cost sharing subsidies to low- and middle-income individuals in 2020 (though Trump may end these earlier)
- Defunding of Planned Parenthood for 1 year
The CBO concluded that 15 million individuals would lose their health insurance next year under BCRA, and ultimately 22 million would be forced out of coverage by 2026. This is similar to the respective 14 million and 23 million figures from the CBO report on the House’s version, AHCA.
Though the report estimates that premiums would increase by up to 20 percent (relative to Obamacare) in the first couple of years, they would eventually become cheaper in 2020. However, this would largely be a result of a decrease in services covered by health insurance companies under BCRA.
Bluntly, yet still shocking, the CBO states that this bill would save costs by shunning both elderly and low-income individuals from even purchasing a coverage plan “despite being eligible for premium tax credits.” Overall, the cuts in BCRA could result in a death spiral of drastically increased premiums as younger, healthier individuals drop from a pool composed greatly of older, sicker individuals that require more health services.
Finally, the money breaks down as such:
- $772 billion cut to Medicaid
- $408 billion reduction in subsidies for nongroup health insurance
- $107 billion to states and insurers for various purposes
- $210 billion to reduce collections of penalty payments from employers and uninsured
- $541 billion tax cut for high-income individuals, manufacturers, and excise taxes
- Overall, a net reduction of $321 billion