CBO updates cost estimate of AHCA with amendment: 3 things to know

The Congressional Budget Office and the Joint Committee on Taxation updated the cost estimate Thursday of the American Health Care Act after GOP leadership submitted the manager's amendments earlier this week.

The manager's amendments targeted Medicaid expansion, ACA taxes and funding for age-based tax credits.

Here are three things to know about how those amendments changed the CBO's estimate.

1. Savings are smaller. After incorporating the amendments, the CBO estimates the AHCA would reduce the federal deficit by $150 billion over the next decade. Its previous estimate projected the bill would reduce the federal deficit by $337 billion. The reduction in savings is attributed primarily to changes made to the Internal Revenue Code — these changes account for $137 billion of the reduction in savings. Changes to the IRC include lowering the threshold for medical care deductions on income tax returns, adjusting effective dates and delaying parts of the ACA. An additional $41 billion in reduced revenues is attributed to changes to Medicaid. While some of the Medicaid changes increased revenue, such as those adding a block grant option or allowing states to add work requirements, the overall effect was negative due to a provision that would allow per capita allotments for the elderly, blind and disabled to grow faster.

2. Reductions in health insurance coverage are the same. The CBO did not change its estimate of how many people would lose health insurance under the AHCA. It still expects 14 million more Americans to lose health insurance coverage in 2018 and up to 24 million to lose coverage by 2026.

3. Premium estimates are the same. Compared to projections under current law, average premiums under the AHCA with amendments are still expected to jump up 15 to 20 percent for people buying insurance in the individual market in 2018 and 2019. Premiums will then begin to decrease. The CBO estimates by 2026 premiums under the AHCA would be about 10 percent lower than projected under the ACA, according to the CBO report.

Read the full report here.

 

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