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Congressional Budget Report Could Upset GOP Efforts to Repeal Obamacare

House Republicans passed their health care bill in early May. Now, they get to find out what’s in it.

In a highly unusual move, House leaders brought the American Health Care Act to a vote three weeks ago without waiting for the Congressional Budget Office, the nonpartisan agency responsible for scrutinizing legislation, to evaluate its effects.

The agency is scheduled to release its report on the AHCA on Wednesday afternoon. The CBO previously weighed in on a version of the AHCA that the House was set to vote on in March before Republican leaders withdrew the bill due to lack of support.

The bill that passed in May included major changes to satisfy conservative members, however, including a provision allowing states to waive key protections for people with pre-existing conditions. The new report will provide the most detailed nonpartisan analysis yet of the bill’s potential impact and its findings will be dissected by critics and supporters of the bill for weeks to come.

Meadows: No losers in GOP health care bill 6:53

The story so far

The first CBO report landed like a bombshell in the middle of the health care debate in March. Their analysis concluded that the plan would leave 24 million more people without insurance after a decade in comparison to current law.

The hardest hit would be older low-income Americans, especially in rural areas with more expensive health care costs, who would receive fewer subsidies to buy insurance on the individual market and who would be subject to higher premiums and out-of-pocket costs by insurers.

Perhaps the most widely shared detail in the report was an estimate that the average 64-year-old making $26,500 would pay an additional $12,900 in premiums every year to purchase insurance that would provide fewer benefits than under Obamacare.

Of the coverage losses, 14 million would have come from Medicaid: The bill would have restructured the program to cap the amount states can get per beneficiary and reduced its funding by $839 billion. These cuts are still in the new version.

The CBO findings became a key driver of opposition to the bill, both from advocacy groups representing patients, seniors, and the medical industry, and from lawmakers across the political spectrum. Conservatives complained the bill didn’t lower premiums enough because it left too many Obamacare rules in place. Moderate Republicans complained it kicked millions off insurance and didn’t provide enough federal aid to low-income Americans.

What the CBO is looking at now

After the first bill went nowhere, House Republicans and the White House negotiated a new one and passed it in May. While it shares much in common with the first version, there are some major changes that the CBO has to consider.

The biggest shift was a series of provisions backed by the conservative House Freedom Caucus that allow states to opt out of Obamacare regulations on insurance.

Under current law, insurers can only sell plans that cover certain “essential health benefits,” such as prescription drugs and maternity care. The new bill would allow states to opt out of these requirements, which would mean insurers could sell less comprehensive care.

Image: Paul Ryan backed the Obamacare repeal.
Paul Ryan backed the Obamacare repeal. Aaron P. Bernstein / Reuters

The bill, backed by House Speaker Paul Ryan, also does away with certain protections for consumers with pre-existing conditions. Under current law, insurance companies are not allowed to charge sick people more than healthy people for the same coverage. The new version would allow states to opt out of that requirement as well, while providing funding for “high risk pools” to cover people whose conditions make their premiums unaffordable.

Conservatives hailed the moves as a way to bring down premiums by allowing insurers to sell less generous plans. But the changes also prompted fierce criticism from health advocacy groups, who warned they would allow insurers to cherry-pick healthy customers into cheap plans while older and sicker customers would be unable to find affordable coverage. Health policy experts also argue that the funding for high risk pools is well below the levels they would need to function.

The CBO report will provide the most rigorous estimate yet as to how these complicated and contrasting effects might play out.

An analysis that finds the bill would raise health care costs or eliminate coverage for millions of Americans, as the previous report did, would give major ammunition to efforts by Democrats and advocacy groups to derail the already-struggling health care plans being pushed by the White House and Republicans in Congress.

Procedural drama

There’s another reason the CBO score is so important. Depending on their conclusions, House Republicans might have to revisit the bill and vote a second time on changes before the Senate can take it up.

The reason for this gets into arcane procedure. Republicans are trying to advance their bill through the budget “reconciliation” process, which allows them to pass legislation with a simple majority in the Senate — meaning, they wouldn't need any Democratic votes.

Image: The nonpartisan Congressional Budget Office (CBO) will reveal the projected cost of the Obamacare repeal.
The nonpartisan Congressional Budget Office (CBO) will reveal the projected cost of the Obamacare repeal. Jim Lo Scalzo / EPA

But there are rules tied to reconciliation, and one of them is that any legislation passed this way has to reduce the deficit. The first version of the AHCA that the CBO scored saved $150 billion over 10 years. House Republican leaders say they’re confident the new one will pass the test, but they’ve held off on formally sending it to the Senate just in case.

There is a plausible case the CBO might determine that the bill increases the deficit. If CBO finds that millions of more Americans are able to obtain coverage, even if a plan that covers only limited medical expenses, then that would raise the cost of the bill because these customers would use federal tax credits to help pay their premiums.

That puts the House in an odd position. If their bill succeeds in covering significantly more people than the first one, then that means it will save less and potentially need revisions. If it fails to meaningfully expand coverage, then the CBO score will fuel the same attacks that the previous version faced after its own analysis.