(CNSNews.com) – Without the federal government ordering Americans to buy health insurance (or else!), fewer of them will do so.
That’s one of the conclusions reached by the Congressional Budget Office and the Joint Committee on Taxation, in their report on how the Republicans’ American Health Care Act will affect the federal budget, insurance premiums, and the number of uninsured.
Reacting to the CBO scoring Monday evening, House Speaker Paul Ryan (R-Wis.) told Fox News, “So of course the CBO is going to say if you’re not going to force people to buy something they don’t want to buy, they won’t buy it. But at the same time, they’re saying our reforms will kick in and lower premiums and make health care therefore more accessible.”
According to the CBO/JCT estimate released on Monday:
[I]n 2018, 14 million more people would be uninsured under the legislation than under current law. Most of that increase would stem from repealing the penalties associated with the individual mandate. Some of those people would choose not to have insurance because they chose to be covered by insurance under current law only to avoid paying the penalties, and some people would forgo insurance in response to higher premiums.
The report also said future changes to the Medicaid program (block-granting it to the states) and changes to subsidies for insurance purchased by individuals would increase the number of uninsured people to 21 million in 2020 and then to 24 million in 2026.
“In 2026, an estimated 52 million people would be uninsured, compared with 28 million who would lack insurance that year under current law,” the report said.
On the positive side, CBO and JCT estimate that the Republican bill would reduce federal deficits by $337 billion over the 2017-2026 period. Outlays would be reduced by $1.2 trillion over the period, and revenues would be reduced by $0.9 trillion.
“Don't forget one thing here,” Ryan told Fox News. “Obamacare is in the middle of a collapse. Only five states have one insurer left. Over 1,000 counties in America have only one insurer left. Humana just announced that they are pulling out. That means zero plans in 2018 for those people.
“By the way, we just got a letter from Anthem, one of the biggest insurers, that are telling us if the status quo stays, they are going to surgically pull out of markets as well. So put this against the backdrop that Obamacare is collapsing. The insurers are telling us premium increases this year, 25 percent, on average, will be even higher next year. This, compared to the status quo, is far better.”
According to CBO/JCT, the Republicans’ proposed refundable tax credits – although they would be “less generous” than the current Obamacare subsidies – would lower average premiums enough to attract enough relatively healthy people to stabilize the health insurance market.
Ryan stressed that the bill under consideration is just one part of a three-part plan:
“Just this, they say, lowers premiums, stabilizes the market, gives people more choice and freedom. Part two is, Tom Price at HHS brings more choice and competition, lets the states open up markets, which will lower prices even more.
“And part three are the other bills that we will be passing—interstate shopping across state lines, association health care plans to let people bulk buy insurance nationwide, medical liability reform. Those will drop premiums even further, and make health care even more accessible than CBO is, in an encouraging way, saying.”
The Republican bill “would tend to increase average premiums in the nongroup market prior to 2020 and lower average premiums thereafter,” compared with what is expected to happen under current law.
In 2018 and 2019, according to CBO and JCT’s estimates, average premiums for single policyholders in the nongroup market would be 15 percent to 20 percent higher than under current law, mainly because the individual mandate penalties would be eliminated, inducing fewer comparatively healthy people to sign up.
But -- starting in 2020, the increase in average premiums would be more than offset by other factors, including a “younger mix of enrollees.”
“By 2026, average premiums for single policyholders in the nongroup market under the legislation would be roughly 10 percent lower than under current law, CBO and JCT estimate.”
The report also notes that although average premiums would increase prior to 2020 and decrease starting in 2020, older people will pay “substantially more” (because they consume more medical care).
The CBO/JCT report states that its estimates “are uncertain.”
The ways in which federal agencies, states, insurers, employers, individuals, doctors, hospitals, and other affected parties would respond to the changes made by the legislation are all difficult to predict, so the estimates in this report are uncertain. But CBO and JCT have endeavored to develop estimates that are in the middle of the distribution of potential outcomes.
Ryan said he’s encouraged that once the Republican reforms kick in, premiums will go down, the market will stabilize: “It’s a $1.2 trillion spending cut, an $883 billion tax cut, and $337 billion in deficit reduction,” he said.