AHCA would leave 13M more US residents uninsured, CMS estimates

CMS' Office of the Actuary in an analysis released Tuesday estimated that House-approved American Health Care Act (AHCA) would reduce insurance coverage by about 13 million people by 2026, which would leave 10 million more people insured than the Congressional Budget Office (CBO) had projected last month.

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According to Politico, the difference between the projections can be partially attributed to differing assumptions on how the AHCA's cost-saving measures will affect enrollment and spending. In addition, according to the Committee for a Responsible Federal Budget, CBO in its estimate assumes that more states will expand Medicaid under the Affordable Care Act over the next ten years, while the CMS in its estimate does not.

The CMS analysis also did not account for the possibility that aggressive state waivers to ACA provisions could destabilize the insurance market, although the report noted that if that happened, "the premiums for comprehensive coverage for a significant proportion of the population would become unaffordable and the coverage would cease to be offered."

Analysis details

For the analysis, CMS' Office of the Actuary used several data sources to project the financial and coverage effects of the AHCA, including:

• CMS' National Health Expenditure estimates;
• CMS' Form CMS-64 Quarterly Expense Report;
• Medicaid Analytic eXtract;
• The 2016 Kaiser Family Foundation and Health Research and Educational Trust (HRET) Employer Health Benefits Survey; and
• The President's Fiscal Year 2018 Budget.

CMS' actuary said the analysis assumes the individual market would be "viable and stable under both current law and the AHCA."

While the analysis noted that it is impossible to tell how many states will apply for essential health benefit or community rating waivers under the AHCA, the estimates assume 25 percent would opt for a waiver. However, the actuary noted that this analysis does not take into account the degree to which some states would obtain waivers that would severely limit health care benefits and that would allow insurers to charge higher premiums for certain U.S. residents who have costly medical conditions.

"If such actions were implemented, we would expect that the individual market in these areas would destabilize such that the premiums for comprehensive coverage for a significant proportion of the population would become unaffordable and the coverage would cease to be offered," the report said.

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Findings

Projections on coverage losses

CMS' Office of the Actuary projected that, under the House-approved AHCA, 4 million fewer U.S. residents would be insured next year than under the current law—compared with CBO's projection that 14 million fewer U.S. residents would be insured next year. 

Overall, the actuary projected that 43 million U.S. residents would be uninsured under the AHCA by 2026, compared with 31 million U.S. residents under the current law. The actuary said several factors, including declines in Medicaid eligibility and the repeal of the Affordable Care Act's individual mandate, would prompt the decline in insured U.S. residents. CBO last month estimated 51 million would be uninsured by 2026 under the AHCA, compared with current law.

Projections on Medicaid

As a result of the AHCA's changes to Medicaid eligibility, CMS' actuary estimated 8 million fewer U.S. residents would be covered by the program in 2026, compared with the current law. CBO had estimated 14 million fewer people would be insured by Medicaid in 2026. 

In addition, the actuary estimated that the AHCA would reduce federal Medicaid spending by $383.2 billion by 2026. CBO had estimated that the ACHA would cut federal Medicaid spending by $834 billion.

Projections on Medicare

In addition, the actuary said under the ACHA the Medicare Hospital Insurance Trust Fund for inpatient care would become insolvent by 2026—which is two years earlier than under current law. The actuary attributed this to the AHCA's repeal of an additional Medicare payroll tax on wealthy U.S. residents and an increase in Medicare disproportionate-share payments to hospitals as they served more uninsured U.S. residents.

Projections on federal spending

Overall, the actuary estimated that federal spending would decrease by a net total of $328 billion by 2026 under the ACHA. CBO had estimated spending would decrease by $119 million by 2026 (Meyer, Modern Healthcare, 6/13; Demko, Politico, 6/13; CNBC, 6/13; Committee for a Responsible Federal Budget blog, 6/3).