Resolution on the Budget for Fiscal Year 2017 directed the House Committees on
Ways and Means and Energy and Commerce to develop legislation to reduce the
deficit. The Congressional Budget Office and the staff of the Joint Committee
on Taxation (JCT) have produced an estimate of the budgetary effects of the
American Health Care Act, which combines the pieces of legislation approved by
the two committees pursuant to that resolution. In consultation with the budget
committees, CBO used its March 2016 baseline with adjustments for subsequently
enacted legislation, which underlies the resolution, as the benchmark to
measure the cost of the legislation.
Effects on the
CBO and JCT estimate that
enacting the legislation would reduce federal deficits by $337 billion
over the 2017-2026 period. That total consists of $323 billion in on-budget
savings and $13 billion in off-budget savings. Outlays would be reduced by $1.2
trillion over the period, and revenues would be reduced by $0.9 trillion. (The Current deficit 19 Trillion)
The largest savings
would come from reductions in outlays for Medicaid and from the elimination of
the Affordable Care Act’s (ACA’s) subsidies for nongroup health insurance. The
largest costs would come from repealing many of the changes the ACA made to the
Internal Revenue Code—including an increase in the Hospital Insurance payroll
tax rate for high-income taxpayers, a surtax on those taxpayers’ net investment
income, and annual fees imposed on health insurers—and from the establishment
of a new tax credit for health insurance.
procedures apply because enacting the legislation would affect direct spending
and revenues. CBO and JCT estimate that enacting the legislation would not
increase net direct spending or on-budget deficits by more than $5 billion in
any of the four consecutive 10-year periods beginning in 2027.
Effects on Health Insurance Coverage
To estimate the
budgetary effects, CBO and JCT projected how the legislation would change the
number of people who obtain federally subsidized health insurance through
Medicaid, the nongroup market, and the employment-based market, as well as many
CBO and JCT estimate that,
in 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
additional changes to subsidies for insurance purchased in the nongroup market
and to the Medicaid program, the
increase in the number of uninsured people relative to the number under current
law would rise to 21 million in 2020 and then to 24 million in 2026. The reductions in insurance coverage between 2018 and 2026 would
stem in large part from changes in Medicaid enrollment—because some states
would discontinue their expansion of eligibility, some states that would have
expanded eligibility in the future would choose not to do so, and per-enrollee
spending in the program would be capped. In 2026, an estimated 52 million
people would be uninsured, compared with 28 million who would lack
insurance that year under current law.
Stability of the Health Insurance Market
offering and purchasing health insurance depend on the stability of the health
insurance market—that is, on having insurers participating in most areas of the
country and on the likelihood of premiums’ not rising in an unsustainable
spiral. The market for insurance purchased individually (that is, nongroup
coverage) would be unstable, for example, if the people who wanted to buy
coverage at any offered price would have average health care expenditures so
high that offering the insurance would be unprofitable. In CBO and JCT’s
assessment, however, the nongroup market would probably be stable in most areas
under either current law or the legislation.
Under current law,
most subsidized enrollees purchasing health insurance coverage in the nongroup
market are largely insulated from increases in premiums because their
out-of-pocket payments for premiums are based on a percentage of their income;
the government pays the difference. The subsidies to purchase coverage combined
with the penalties paid by uninsured people stemming from the individual
mandate are anticipated to cause sufficient demand for insurance by people with
low health care expenditures for the market to be stable.
Under the legislation,
in the agencies’ view, key factors bringing about market stability include
subsidies to purchase insurance, which would maintain sufficient demand for
insurance by people with low health care expenditures, and grants to states
from the Patient and State Stability Fund, which would reduce the costs to
insurers of people with high health care expenditures. Even though the new tax
credits would be structured differently from the current subsidies and would
generally be less generous for those receiving subsidies under current law, the
other changes would, in the agencies’ view, lower average premiums enough to
attract a sufficient number of relatively healthy people to stabilize
Effects on Premiums
The legislation would
tend to increase average premiums in the nongroup market prior to 2020 and
lower average premiums thereafter, relative to projections 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
Starting in 2020, the
increase in average premiums from repealing the individual mandate penalties
would be more than offset by the combination of several factors that would
decrease those premiums: grants to states from the Patient and State Stability
Fund (which CBO and JCT expect to largely be used by states to limit the costs
to insurers of enrollees with very high claims); the elimination of the
requirement for insurers to offer plans covering certain percentages of the
cost of covered benefits; and 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
premiums would increase prior to 2020 and decrease starting in 2020, CBO and
JCT estimate that changes in premiums relative to those under current law would
differ significantly for people of different ages because of a change in
age-rating rules. Under the legislation,
insurers would be allowed to generally charge five times more for older
enrollees than younger ones rather than three times more as under current law,
substantially reducing premiums for young adults and substantially raising
premiums for older people.
Uncertainty Surrounding the Estimates
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.
Because of the
magnitude of its budgetary effects, this legislation is “major legislation,” as
defined in the rules of the House of Representatives. Hence, it triggers the
requirement that the cost estimate, to the greatest extent practicable, include
the budgetary impact of its macroeconomic effects. However, because of the very
short time available to prepare this cost estimate, quantifying and
incorporating those macroeconomic effects have not been practicable.
Intergovernmental and Private-Sector Mandates
JCT and CBO have
reviewed the provisions of the legislation and determined that they would
impose no intergovernmental mandates as defined in the Unfunded Mandates Reform
JCT and CBO have
determined that the legislation would impose private-sector mandates as defined
in UMRA. On the basis of information from JCT, CBO estimates the aggregate cost
of the mandates would exceed the annual threshold established in UMRA for
private-sector mandates ($156 million in 2017, adjusted annually
Unnikrishna Menon2017-05-14 06:37:42 NewsBeautifully written piece. Never stop writing. God Bless you..
Viewer2017-05-13 07:32:50 NewsRani Mary and Manikutty are very correct. What a horrible show! This is what the media here boasting great show? What a pity. The sponsored and paid wrters write using adjectives. Simply put it: utter waste of money. Like Mankiutty said, I also went for the show because of tickets imposed on me. I should have stayed home watching Badai Bunglav instead.
നാട്ടീൽ പോയി കാശുകൊടുത്ത് കഥയും നോവലും എഴുതിച്ചു ഇവിടെകൊണ്ടു പ്രസിദ്ധീകരിക്കാൻ തുടങ്ങുമ്പോൾ അതടിച്ചുകൊണ്ടുപോയി വേറെ പേരിൽ പ്രസിദ്ധീകരിക്കുന്നതുപോലെ ഇത്രേം വൃത്തികെട്ട പരിപാടി വേറെ എങ്ങും കാണില്ല. എല നക്കി നായ്ക്കളുടെ ചിറി നക്കി നായ്ക്കൾ
Tomabachan2017-05-13 05:40:40 NewsWhat do you expect?
Manikutty2017-05-12 22:14:11 NewsWhat a pity? Waste of my time and money. The above writer is correct, only Remey Tomey performed well. Also our local talents did good with those so called visiting stars. Visiting stars performance was dismall. I went to the show because the tickets were imposed on me by my church friends. I am also the friends of some of the promoters. But waht to do the show stars were did a thara performance.
എവിടെ പോയേടെ നമ്മുടെ സംഘടനയിലെ അംഗങ്ങളൊക്കെ? ഇവനെ ഒതുക്കിയില്ലെങ്കിൽ ഇവൻ നമ്മുടെ പേരുകളയും...
ബെൽറ്റ് വാസു 2017-05-12 14:44:54 Newsചേട്ടോ, എന്നെ പറ്റിയാണോ ഈ എഴുതിയേക്കുന്നതെല്ലാം. ഞാൻ അസോസിയേഷനിൽ മിടുക്കനല്ലേ? എൻറെ പടം എന്നും രാവിലേയും വൈകിട്ടും ഫേസ്ബുക്കിൽ വരുന്നത് കാണാറില്ലേ? എൻറെ മുഖം.... എൻറെ തല; എൻറെ തല.... എൻറെ മുഖം
ഒരുകാര്യം പറയാതെവയ്യാ...എഴുതിയിരിക്കുന്നത് ഒരു തുണിയുടുക്കാത്ത (നഗ്ന) സത്യം..