The original Republican health care reform bill, The American Health Care Act (AHCA), was withdrawn before a formal vote was taken. The amended AHCA recently passed in the U.S. House before the non-partisan Congressional Budget Office (CBO) had a chance to financially score the bill . The details of the bill as passed can be found here.

Today, the CBO released its report on the impact of the amended ACHA over the next decade. (here) The CBO predicts that the AHCA would:

• Increase the number of uninsured by 23 million people, including 14 million in Medicaid.
• Decrease the federal deficit by $119 billion.
• Decrease overall spending by $1.1 trillion.
• Decrease revenues by $992 billion.
• Decrease Medicaid spending by $834 billion.
• Decrease premium costs in the individual market.
• The individual and small-group health insurance markets would stabilize in general because of the refundable tax credit and the $138 billion stabilization fund.

The report has a very significant disclaimer – “estimates are…..uncertain” - mainly because states have a wide range of options in the AHCA. The report also essentially neglects the use of high-risk pools when estimating the impact on people with pre-existing conditions.

The estimates for Medicaid need some context. The $834 billion in decreased spending comes from the discontinuation of the 90/10 federal/state funding match in 2020. People already enrolled in the Obamacare Medicaid expansion would stay in the expansion program. Any new enrollee after January 1, 2020, would enter the entitlement at the traditional 50/50 match. In other words, no one will get thrown out of Medicaid, but states will need to prioritize future enrollment. Medicaid will still be a safety-net program, but state officials, not federal policymakers, will decide who best qualifies for the entitlement.

It should also be noted that total spending on Medicaid was $545 billion last year. (here) At a conservative six percent per year inflation in health care spending, the total estimated Medicaid spending over the next ten years will be $7.6 trillion. While $834 billion is a large number, it is only 11 percent of estimated Medicaid spending over the next decade. Eliminating waste, fraud, and abuse in the Medicaid program would more than make up for the decrease in funding required by the AHCA. (here)

The Medicaid enrollment numbers also don’t add up. Last year, a total of 74 million people were enrolled in either Medicaid or the children’s health insurance program, CHIP. (here) The CBO estimate of 14 million people losing their Medicaid insurance, or not being insured through Medicaid, is almost 20 percent of the current total. It is hard to understand how a decrease of 11 percent in funding causes a 20 percent decrease in enrollment.

The CBO report is, at best, an educated guess. The important points are that the ACHA over the next decade would:

• Decrease the federal deficit by $119 billion.
• Decrease federal spending by over $1 trillion and taxes by $992 billion, greatly stimulating the economy.
• Decrease Medicaid spending by only an estimated 11 percent.
• Not withdraw Medicaid from any current enrollee.

Plus, the CBO report essentially neglects the impact of the $138 billion stabilization fund as it relates to helping people with pre-existing conditions and assisting low-income people in the individual health insurance markets.

It is now up to the U.S. Senate to pass a comparable bill.