Thursday, January 6, 2011

How would repeal affect coverage and cost of health care?

Next week, the new GOP-controlled House of Representatives will be voting on and is expected to pass a bill to repeal the Affordable Care Act (ACA), lock, stock, and barrel.

There is virtually no chance the repeal bill will get through the Senate, though, which maintains a narrow Democratic majority, and President Obama would veto it if it did.

But let’s say that the seemingly impossible happened, and the ACA was repealed. What would the impact be on coverage, costs, and the federal deficit?

In a letter to Speaker John Boehner (R-OH), the Congressional Budget Office today released its preliminary estimates of the impact of repeal on the deficit, uninsured, and costs of care, and found that it would make the deficit worse, result in more uninsured persons, and higher premiums for many:

- Deficit: repeal of the ACA would increase the deficit by $145 billion from 2012-2019, by another $80 to $90 billion over the 2020-21 period, and by an amount “that is in the broad range of one-half percent of the GDP” in the decade after 2019*--or about a trillion dollars.

[*Ordinarily, the House of Representatives would have to find “offsets” to pay for such increased deficit spending from legislation, but it exempted the ACA repeal bill from this requirement. Republican leaders have justified this on the grounds that they disagree with the CBO’s estimates. But under Congress’ own, long-standing budget rules, accepted by both political parties, the CBO is the referee, and the referee decides how much a bill will increase or decrease the deficit, not the party that is in control of Congress at a given time. The result is that the increased deficit spending from repeal would show up in future CBO “baseline” deficit spending estimates, making it much harder for Congress to balance the budget.]

- Federal budgetary commitment to health care: repeal would lower the federal budgetary commitment to health care over the next decade but increase it in subsequent years. In other words, if the ACA is repealed, the federal government would pay less now, but more later for health care.

- Coverage: repeal would result in 32 million fewer non-elderly persons having health insurance, leaving about 54 million uninsured. The share of legal non-elderly residents with insurance in 2019 would be 83 percent compared to 94% under the ACA.

- Premiums: premiums for individual insurance would be “somewhat lower” but “on average . . . many people would end up paying more for health insurance coverage -because under [the ACA], the majority of enrollees purchasing coverage in that market would receive subsidies via the insurance exchanges, and [repeal] would eliminate those subsidies.” Premiums for employment-based coverage from large employers would be “slightly higher” under repeal than under the ACA. Premiums for employer-based coverage through small employers might be “slightly higher or lower” reflecting uncertainty about the impact of the ACA on premiums in that market.

Repeal, of course, would also eliminate all of the provisions of the ACA, including rules to end discriminatory practices against people with pre-existing condition exclusions, coverage of adult children on their parents’ plans, the new 10% increase in Medicare payments to primary care physicians, the new Medicare wellness examination preventive and other screening procedures now available free of charge to beneficiaries, the phase-out of the Medicare Part D doughnut hole, the requirement that insurers spend more on patient care and less on administration, and much, much more.

There is something to be said for politicians trying to deliver on campaign pledges. The GOP promised voters that it would try to repeal the ACA, so it is no surprise and maybe even a bit refreshing that repeal is one of the first things out of the starting gate.

But the evidence is that if the ACA is repealed, the country would have a bigger deficit, more uninsured people, higher out-of-pockets costs and premiums, reduced Medicare benefits, reduced pay to primary care doctors, and elimination of many other popular and beneficial programs created by the ACA. Is this really what the people want?

Today’s question: What is your reaction to the CBO’s finding that repeal of the ACA will increase the deficit, lead to more uninsured persons, and higher premiums and out-of-pockets costs for many?


Steve Lucas said...

On Jan. 4 Nancy Pelosi stood before microphones and stated that the Democrats had been all about deficit reduction and pay as you go.

The Wall Street Journal did an analysis of the ages of the Democratic caucus and found the average to be about 70. The average age of the incoming Republicans is about 40.

The CBO has made the point over and over that they can only score the scenario they are given, not what they truly believe, or what good economic analysis would indicate.

My personal belief is that we will see very different numbers once a more realistic scenario is put forth by the new House.

On the positive side all of the focus on this bill will require a bipartisan effort to reach a compromise on any changes. The very real possibility of the funding mechanism being found unconstitutional will also mean another bipartisan effort to try and improve our medical structure.

My hope would be that the new Congress will push aside the lobbyist and others with a financial position in the process, and design something with the doctor and patient as the focus. Although that is something I do not expect from Washington.

Steve Lucas

ryanjo said...

Let's see, the Congressional Budget Office...isn't that the body responsible for the massively underestimated cost for fighter jets, aircraft carriers, space programs and highway projects? I question whether the CBO estimate of the impact of health reform on the budget deficit is any closer to reality.

Why does this blog even deal with the ACA any longer? The health reform bill in its present form has hit the iceberg of public opinion and is taking on water, soon to go down with the whole Obama presidency on board.

Should the "ACP Advocate" begin to formulate positions that would serve the members, such as reforming physician payment, preventing hospitals & insurers from co-opting ACOs, and healing primary care without sabotaging the excellence of our medical subspecialties? Talk to me about something I care about.

Robert J. Sobel, M.D. said...

I'm not sure the CBO reverse analysis should come as much of a surprise. I've never seen a particularly strong argument that any of the bureaucracies created by the ACA will be markedly cost saving. We'll see how that all plays out.

There is still work to be done for true reform, in my opinion. With all our eyes on them, Congress is sure to try to put out a good argument. My stand remains that we are bureaucratizing the wrong part of health care.

Regulate the price of commodities. Let professionalism and patient autonomy guide the rest. Adjust smartly. Keep good independent science funded, so our perspectives are not skewed by the new/old divide.

I can't see how the Mandate is unconstitutional. We can't outlaw stupidity or the refusal to see a primary care doctor, stop smoking, or eat indulgently. We can certainly discourage them. Nevertheless, we will all need the health care system one day. Mandating buying in is fine, as long as "in" is a functional system.